By Samuel Muhimba
Shareholders of Uganda’s Orient Bank have through their virtual general meeting approved sale of 90 percent shares to Kenyan financial services firm I&M Holdings Ltd, owners of I&M Bank, Kenya’s 8th largest bank by assets (US$2.52 as at Sep.2019).
The deal, which is pending approval from regulatory bodies in Kenya and Uganda, is in excess of $33.6 million according to disclosures in a circular to shareholders.
I&M just like other Kenyan financial firms like KCB Group, Equity Group, and DTB, I&M Group seeks to spread its footprint across East Africa having already set up its regional banking operations in Kenya, Rwanda, Tanzania and Mauritius.
This comes nearly a month after I&M announced its interest in buying 90 percent stake from Orient’s shareholders including Hemlata Karia, Jay Karia, Morka Holdings Limited, Zhong Shuang Quan, Cornerstone M8 Limited and the bank’s founder Ketan Morjaria who also owns 9.8 percent stake in Kenya’s Credit Bank who accordingly, would only retain a 5.5 percent in what will become I&M’s subsidiary. Alemayehu Fisseha will also retain a 4.5 percent interest in the bank.
In the Financial Year(FY) 2019, Orient Bank was among the loss making banks in Uganda recording losses of Ushs 1.1 billion from profits of Ushs 5.6 billion in FY’2018, while its book value stood at Ushs 114.1 billion in FY’2019.
The 2019 performance was mainly driven by an increase in the Total Operating Expenses to Ushs 97.2 bn in FY’2019 from Ushs 81.6 bn in FY’2018, largely driven by a 172.6% increase in Loan Loss Provisions to Ushs 17.9 bn in FY’2019, from Ushs 6.6 bn in FY’2018.