I&M Group Issues Warning to Shareholders

The I&M Group PLC has issued a cautionary announcement to its shareholders and investors.

In a notice dated October 15, 2024, the I&M Group Board issued the warning while confirming the approval of a proposed subscription of its new ordinary shares of up to Ksh86.5 million by East Africa Growth Holding (EAGH).

The Group has confirmed that EAGH will subscribe for up to Ksh86. 5 million new ordinary shares to be issued by the company at a subscription price of Ksh48.42 per share.

“Pursuant to Regulation 89(2) of the Capital Markets (Public Offers, Listing and Disclosures) Regulations, 2023, I&M Group PLC (the Company) hereby announces to the public that its Board of Directors has approved the entry into a subscription agreement by the Company and East Africa Growth Holding (EAGH) pursuant to which EAGH has agreed to subscribe for up to eighty-six million five hundred thousand (86,500,000) new ordinary shares to be issued by the Company (which will upon subscription comprise of up to approximately 4.97% of the expanded total share capital of the Company) at a subscription price of Kenya Shillings Forty Eight and Forty-Two Cents (KES 48.42) per share (the Transaction),” the notice reads.

Further details of the transaction will be made available to the shareholders of the company in due course, according to the I&M Group notice.

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I&M Group issues warning to shareholders

Approval of the transaction could have a material effect on the trading price and value of the shares of the company.

“The Shareholders and the public are accordingly advised to exercise due caution when dealing in the shares of the Company,” the notice adds.

On the other hand, I&M Group notified shareholders that the completion of the transaction is subject to certain conditions that are customary to transactions of this nature including receipt of all relevant regulatory and shareholder approvals.

The transaction comes after I&M Group announced that its six-month net profit for the period ended June 2024 grew. The lender in its half-year results recorded that its net profit rose by 17.4 percent to Ksh5.6 billion.

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According to the report, the rise in earnings was attributed to increased income from lending to customers in a period of high interest rates in the economy.

The tier one lender reported a 35.2 percent jump in net interest income in the period to Ksh16.5 billion.

Half year results

I&M’s Kenyan unit drove the growth in interest income, raising its net revenue from lending by 37 percent to Ksh11.2 billion.

On the cost side, operating expenses rose by 14 percent to Ksh14.3 billion after staff costs went up by a fifth to Ksh4.18 billion, reflecting the ongoing expansion drive that saw the bank open eight new branches in January, with a plan to add 12 more before the end of 2024.

As a result of higher interest rates, the lender, also saw an increase in the cost of funds where interest paid on customer deposits rose by 65 percent to Ksh12.03 billion.

Meanwhile, I&M bank’s non-funded income declined by 11 percent to Ksh6.16 billion, mainly on account of a 38 percent reduction in income from forex trading to Ksh1.82 billion as the shilling strengthened against the dollar.

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