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I&M Holdings - FY 2016
Rank: Chief Joined: 1/3/2007 Posts: 18,103 Location: Nairobi
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I thought a new thread makes more sense since 2015 is already 5 months gone and we look towards getting the 2Q results in 3 months. Interesting re: Strategy Is I&M going downmarket? http://www.nation.co.ke/...4/-/950prs/-/index.html
Let's not discount the traders who do roaring business on River Road but has I&M changed its strategy? For years, it stuck to very few branches but it has ramped up its presence in smaller towns as well as the busy 'downmarket' areas. Can they maintain the quality of service in such busy locations? 1Q 2016 (Kenya) was impressive with +10% y-o-y in profits. I wonder how it manages its loan book especially bad debts/NPLs. No idea how Mauritius did while TZ is consolidated into KE. Rwanda did so-so vs 2015. I read I&M Rwanda will go public in Rwanda. What's the plan in Uganda? Apparently, I&M was going to buy a local bank but it was outbid by a Nigerian bank. UG isn't an easy place to do business and I&M should look at a small greenfield operation to service its EAC clients rather than trying to compete vs the many banks in the market. I&M should use Mauritius to expand into Mozambique or other sensible markets. I like Equity's foray into DRC. Acquisitions in 2016: Burbidge Capital for 65mn for 65%. Not a huge deal size for I&M but nevertheless I am not sure if it makes sense. Giro Bank may be bought out by I&M for cash & shares. I hope I&M doesn't overpay. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Member Joined: 8/27/2015 Posts: 138 Location: Harare
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I see the Burbidge acq. as a strategy to 'cheaply' build in-house M&A capabilities both for its own( after the UG debacle) and their clients' expansion M&A/IB/ requirements. Taking the recent fees paid for I&M bond offer, Giro's acquisition, Orient Uganda, Rwanda "forced" IPO etc, plus the opportunity to internally serve their clients who have EAC expansion ambitions;there is a business case. Investment philosophy development in progress...
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Rank: Veteran Joined: 2/2/2012 Posts: 1,134 Location: Nairobi
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Burbidge did not make sense to me. When I read the IM on the deal I wondered why I&M was buying a perpetual loss-maker. What do they have up their sleeves that the rest of us can't see?
About going 'downmarket'. I think its a bad move. As noted by VVS, it will be difficult to sustain their service quality which has been exceptionally excellent so far.
My hope is that the new CEO will see the folly of that strategy and halt it before they go too far.
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Rank: Veteran Joined: 2/2/2012 Posts: 1,134 Location: Nairobi
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Many years ago I read a case study about how Scandinavian Airlines survived through harsh times by concentrating on business and first-class travelers. They did so well that they were able to offer ridiculous discounts on economy class...
They some idiot decided that they should give more focus to the economy class - including changing flight schedules to suit economy tourists. The business & first class customers started leaving and the airline almost went back to losses!
Kihara Maina must tread very carefully. I&M must start losing the very customers that have helped it to grow into a "small" bank but very large company - have you looked at the BS recently.....?
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Rank: Chief Joined: 1/3/2007 Posts: 18,103 Location: Nairobi
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chiaroscuro wrote:Burbidge did not make sense to me. When I read the IM on the deal I wondered why I&M was buying a perpetual loss-maker. What do they have up their sleeves that the rest of us can't see?  I&M could have gotten Burbidge for free in a year! The cost of maintaining the offices/staff of Burbidge may exceed the 65mn they paid! And the listings by Burbidge aren't that great. Flame Tree is doing OK but ADSS is 'dead in the water'. About going 'downmarket'. I think its a bad move. As noted by VVS, it will be difficult to sustain their service quality which has been exceptionally excellent so far. There's money in that market. Look at Equity/Family and even KCB. My concern is that a reduction in the quality of service will push away the core clientele who don't want to wait in lines, who want easy access to managers, who need custom (not generic) offerings, etc.
How do banks like I&M expand their market reach while maintaining quality? Perhaps they should look at adopting some of Chase Bank's (good) ideas like longer hours, mini-branches, Pesa Mfukoni, etc.
My hope is that the new CEO will see the folly of that strategy and halt it before they go too far. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Veteran Joined: 2/2/2012 Posts: 1,134 Location: Nairobi
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I recall a loyal noting here that, after listing, they hoped I&M doesn't change from a good bank into a good business. Was it you @VVS?
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Rank: Chief Joined: 1/3/2007 Posts: 18,103 Location: Nairobi
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chiaroscuro wrote:I recall a loyal noting here that, after listing, they hoped I&M doesn't change from a good bank into a good business. Was it you @VVS? It wasn't me but I recall that observation. Kenyan business owners should want to grow their businesses at a SUSTAINABLE pace. I think I&M is doing so but the quality of service, whereas better than most, is not what it used to be. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Chief Joined: 1/3/2007 Posts: 18,103 Location: Nairobi
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I&M issues the 'official' announcement re: takeover of Giro Bank. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 2/26/2012 Posts: 15,980
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"There are only two emotions in the market, hope & fear. The problem is you hope when you should fear & fear when you should hope: - Jesse Livermore
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Rank: Elder Joined: 12/4/2009 Posts: 10,684 Location: NAIROBI
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The Indians are grouping under I&M bank in Kenya to provide them with a formidable institution for their financial needs. Most of the big scale indian projects the financier is I&M bank. Nothing spectacular here. Next you will hear I&M acquiring Guardian Bank Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Chief Joined: 1/3/2007 Posts: 18,103 Location: Nairobi
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Ericsson wrote:The Indians are grouping under I&M bank in Kenya to provide them with a formidable institution for their financial needs.
Most of the big scale indian projects the financier is I&M bank.
Nothing spectacular here.
Next you will hear I&M acquiring Guardian Bank
Here you go again. There is no logic to your statement but you are entitled to your opinion. What about DTB which is probably as big as I&M. Or Prime Bank. Weren't you the one who kept on arguing that Soundarajan (sp?) the "Mastermind" is on the board of GA Kenya? Anyway, as I said, logic isn't something that everyone gets so let me leave it there. @Aguy - With limited funds, I wonder whether Equity [at 35] or I&M [at 110] makes more sense. The 1Q 2016 numbers (excluding Rwanda and Mauritius) were quite good. The PER looks attractive. I&M will have to pay out KES 2.5bn in cash hurting their Capital Adequacy Ratios though they will get some cash in 'exchange' for Giro Bank shares which will mitigate the hurt. Equity is a behemoth and I love their DRC play which might even eclipse the South Sudan business by 2019. Kenya remains strong. Growth is expected in Uganda, Tanzania and Rwanda. If I had enough cash, I would buy more of both!!! Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 12/4/2009 Posts: 10,684 Location: NAIROBI
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@VVS DTB is mostly owned and run by the ismailis who are from Pakistan. I have said I&M is going to be the main financier for big projects. Go do a survey in places like westlands for the big commercial and housing projects ask who the fianancier is? Go ask who is the financier for the big Indian contractors like Laxmanbhai,Kundan singh,PBS,Cementers,SS Mehta etc. The same way Chinese use EXIM and China Development Bank,the Indians will now be using I&M. That is how I&M is growing fast. Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Chief Joined: 1/3/2007 Posts: 18,103 Location: Nairobi
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Let's deal in facts. Ericsson wrote:@VVS
DTB is mostly owned and run by the ismailis who are from Pakistan.
I have said I&M is going to be the main financier for big projects.
Go do a survey in places like westlands for the big commercial and housing projects ask who the fianancier is?
So did you do a survey? Do you have verifiable facts?
Go ask who is the financier for the big Indian contractors like Laxmanbhai,Kundan singh,PBS,Cementers,SS Mehta etc.
Kundan Singh - KCB was the largest financier at 2.55bn. It was reported and KCB had to provide it as NPL. I&M at 1bn. All this information is in the public domain.
The same way Chinese use EXIM and China Development Bank,the Indians will now be using I&M.
EXIM banks of China is a multi-billion USD institution. I&M's equity is only $300mn.
That is how I&M is growing fast.
Facts please. Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 12/4/2009 Posts: 10,684 Location: NAIROBI
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@VVS I have verifiable facts For Kundan Singh KCB was the largest financier because the core capital and balance sheet at that time for I&M couldn't allow it to be the largest financier to Kundan singh. Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Elder Joined: 1/21/2010 Posts: 6,675 Location: Nairobi
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Ericsson wrote:@VVS
DTB is mostly owned and run by the ismailis who are from Pakistan. Now what sort of lies are these?? The Aga Khan himself is an Indian! Mark 12:29
Deuteronomy 4:16
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Rank: Elder Joined: 12/4/2009 Posts: 10,684 Location: NAIROBI
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https://en.m.wikipedia.org/wiki/Aga_Khan
@guru267 Read above link about Aga Khan Wealth is built through a relatively simple equation
Wealth=Income + Investments - Lifestyle
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Rank: Chief Joined: 1/3/2007 Posts: 18,103 Location: Nairobi
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LMAO... Questions: No matter who owns it... So is I&M poised for profitable growth? Is Equity a better buy vs I&M? [I own both but more I&M at the moment] Is there a better value (banking) than either? Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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Rank: Elder Joined: 7/11/2010 Posts: 5,040
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VituVingiSana wrote:LMAO... Questions: No matter who owns it...
So is I&M poised for profitable growth?
Is Equity a better buy vs I&M? [I own both but more I&M at the moment]
Is there a better value (banking) than either? Politics above aside. I would grab equity at 35 vs I&M at 110. At that price equity is more expensive pe, PBT wise but like u said a behemoth, well oiled banking machine. Their NPLs impressed me greatly considering the turmoil for other banks. I'm going with Dtb and Equity. For the 3Rd bank I'm considering scbk vs I&M. Scbk coz its a non aggressive bank with good dividend, and coz Dtb is aggressive and similar size to I&M. In favour of I&M is the aggressive growth of a well run tier 2 bank. But sticking with the 2 for now. What's the plan with the tripling of the authorized share capital 500m to 1.5bn? Hope not too dilutive for the shareholder going forward. Rights? Bonus would be yum yum! Acquisitions? Or new investors coming in? This bank has direction, I like that The investor's chief problem - and even his worst enemy - is likely to be himself
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Rank: Veteran Joined: 2/2/2012 Posts: 1,134 Location: Nairobi
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Ericsson wrote:The Indians are grouping under I&M bank in Kenya to provide them with a formidable institution for their financial needs.
Most of the big scale indian projects the financier is I&M bank.
Nothing spectacular here.
Next you will hear I&M acquiring Guardian Bank
Tribalism will kill us! The people you are calling Indians are actually Kenyans! What has their ethnicity got to do with anything? I have in front of me the financial statement of I & M H, 2015. It is signed by one Daniel Ndonye - Chairman. The group recently appointed Kihara Maina as CEO Which Indians are you talking about?
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Rank: Elder Joined: 5/25/2012 Posts: 4,105 Location: 08c
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 Pesa Nane plans to be shilingi when he grows up.
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