I&M Holdings has invested an additional Sh1.8 billion in its Kenyan arm.
This saw the firm's total investment in the subsidiary rise to Sh19.8 billion from Sh17.9 billion in 2017.
Banking group I&M Holdings #ticker:I&M has invested an additional Sh1.8 billion in its fully-owned Kenyan subsidiary whose operations expanded following the acquisition of Giro Commercial Bank.
The Nairobi Securities Exchange-listed firm made the additional investment in I&M Bank Limited — its largest operating unit — in the year ended December according to disclosures in its latest annual report.
The move saw its cumulative investment in the subsidiary, which in turn owns I&M Insurance Limited, I&M Bank Tanzania Limited and Youjays Insurance Brokers, rise to Sh19.8 billion from Sh17.9 billion in 2017.
The Kenyan banking subsidiary took over Giro’s employees, clients, properties and five branches in Nairobi and Mombasa as part of the cash-and-stock buyout of the small lender.
Giro’s owners were paid Sh2.5 billion in cash besides getting 21 million shares in I&M Holdings.
The banking group said the merged operation remained well-capitalised and recorded growth in profits and loans in the review period, adding that its major challenge was the rise in defaults.
“However, due to significant market challenges experienced in 2017/2018, non-performing loans increased by 15 percent during the year,” I&M said of the subsidiary.
“The bank is closely monitoring this matter and is confident that the non-performing loans will decrease over time in line with the prospects of economic recovery.”
I&M Bank, the most important subsidiary, reported a net profit of Sh6.3 billion in the review period compared to Sh5.4 billion the year before.
The unit’s capital ratios exceeded the minimum statutory requirements.
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