Giro Commercial Bank branch on Banda Street, Nairobi. I&M is
expected to draw more of its earnings from the local market, following
the completion of its Sh5 billion takeover of Nairobi-based Giro
Commercial Bank Ltd (GCBL) in a cash-and-stock deal. PHOTO | NATION
MEDIA GROUP
I&M Holdings recorded a 15.8 per cent rise in net profit in
the first three months of the year on the back of increased lending.
The banking group said its net earnings in the period stood at Sh2.1 billion compared to Sh1.8 billion the year before.
This came as interest income jumped 15.9 per cent to Sh5.7 billion and its loan book expanded 11.6 per cent to Sh130.8 billion.
All the markets where I&M operates banking subsidiaries posted net profit growth in the first quarter led by Kenya at Sh1.6 billion, Rwanda (Sh173.7 million), Tanzania (Sh170 million) and Mauritius (Sh124.3 million).
Net earnings of the units in the previous comparable period stood at Sh1.5 billion, Sh153.3 million, Sh65.8 million and Sh70.2 million respectively.
I&M is expected to draw more of its earnings from the local market, following the completion of its Sh5 billion takeover of Nairobi-based Giro Commercial Bank Ltd (GCBL) in a cash-and-stock deal.
Analysts at Standard Investment Bank (SIB) said the acquisition of Giro will likely push the share of profits generated in Kenya to above 80 per cent from the current 76 per cent.
Giro has seven branches in the country which are to be merged under I&M’s banking business, a move that will see the Nairobi Securities Exchange-listed firm inherit some 9,000 customers from Giro.
SIB noted that the two lenders share the same customer base of SMEs and middle to high-end retail. Giro focuses on short-term lending with over half of its loan book maturity of less than one year.
“Management had indicated that it expects to achieve costs savings of about Sh60 million annually from acquisition of GCBL. It, however, remains unclear as to how this will be achieved going forward,” said SIB.
The banking group said its net earnings in the period stood at Sh2.1 billion compared to Sh1.8 billion the year before.
This came as interest income jumped 15.9 per cent to Sh5.7 billion and its loan book expanded 11.6 per cent to Sh130.8 billion.
All the markets where I&M operates banking subsidiaries posted net profit growth in the first quarter led by Kenya at Sh1.6 billion, Rwanda (Sh173.7 million), Tanzania (Sh170 million) and Mauritius (Sh124.3 million).
Net earnings of the units in the previous comparable period stood at Sh1.5 billion, Sh153.3 million, Sh65.8 million and Sh70.2 million respectively.
I&M is expected to draw more of its earnings from the local market, following the completion of its Sh5 billion takeover of Nairobi-based Giro Commercial Bank Ltd (GCBL) in a cash-and-stock deal.
Analysts at Standard Investment Bank (SIB) said the acquisition of Giro will likely push the share of profits generated in Kenya to above 80 per cent from the current 76 per cent.
Giro has seven branches in the country which are to be merged under I&M’s banking business, a move that will see the Nairobi Securities Exchange-listed firm inherit some 9,000 customers from Giro.
SIB noted that the two lenders share the same customer base of SMEs and middle to high-end retail. Giro focuses on short-term lending with over half of its loan book maturity of less than one year.
“Management had indicated that it expects to achieve costs savings of about Sh60 million annually from acquisition of GCBL. It, however, remains unclear as to how this will be achieved going forward,” said SIB.
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