I&M Holdings wraps up Giro Bank buyout
I&M Holdings has completed the acquisition of Giro Bank.
The deal which was first announced in 2015 will see I&M Bank take up total ownership of the bank.
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According to the Central Bank of Kenya (CBK), the 100 percent stake buyout will see Giro Bank’s operations taken up by I&M Bank and will thus cease operating in the market.
“Consequently, effective February 13, 2017, GCBL has ceased to be a bank licensed by CBK, and its rights and obligations have been taken up by I&M Bank. All GCBL stakeholders—e.g., depositors, employees, and creditors continue their relationship with I&M Bank,” CBK said in a statement.
Through the deal I&M Bank will take up seven branches previously owned by Giro Bank as well as its estimated 9,000 customers.
Banks are increasingly casting their eyes on struggling tier three banks for possible mergers and acquisition after the CBK issued a moratorium freezing licensing of new banks.
Smaller banks in the country are in a race against time to shore up liquidity even as the capping of interest rates continues to exact pressure on the banking sector.
The deal is estimated to be worth Sh5 billion.
Giro Bank owners will receive Sh2.5 billion in cash from the sale of the bank as well as 21 million shares of the listed bank.
I&M’s shares closed Friday’s trading session at Sh79.50 valuing the expected shares Sh1.7 billion.