Listed banking group I&M Holding has been given the final go ahead to complete the Sh5 billion acquisition of Giro Commercial Bank.
In a notice published on Friday’s issue of Kenya Gazette, the Competition Authority of Kenya (CAK) announced the conditional approval of the acquisition deal pegged on the Giro Bank staff welfare.
“CAK has approved the implementation of the proposed acquisition of all the issued share capital in Giro Commercial Bank by I&M Holdings Limited on condition that all the 108 employees at Giro are retained in post merger entity,” said the notice signed by CAK director general Wang’ombe Kariuki.
The deal once complete will open the door for more acquisitions and mergers in banking sector as small banks seek ways of surviving in post interest rates control law that has reduced net interest margins for lenders with small numbers of customers.
I&M Holdings will pay Giro Commercial Bank owners a cash consideration of Sh2.5 billion and 5.9 equity stake or (21 million shares) also valued at Sh2.5 billion.
I&M Holdings has total assets valued at Sh190 billion as at June 30, 2015, a customer base of over 150,000 1500 employees.
Giro Commercial Bank was established following the merger of Giro Bank Limited and Commerce Bank Limited in 1998. With assets valued of more than Sh19 billion and over 9,000 customers Giro is a specialist banking for businesses.
Giro reported after tax profits of Sh452 million last year.
The shareholders of Giro Bank Limited (GIRO) which was launched in 1993 are Laxmi Fibres Limited (16.03 percent), Blanford Investments Limited (21.76 percent), and Sentinel Investments Limited (16.45 percent).
Others are Sunsheli Limited (16.03 percent), Lombard Holdings Limited (17.52 percent), and Gilt Investments Limited (12.21 percent)