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I&M Holdings - FY 2016

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VituVingiSana		#1 Posted : Thursday, June 02, 2016 12:03:03 AM
Rank: Chief Joined: 1/3/2007 Posts: 18,344 Location: Nairobi		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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alotoftalk		#2 Posted : Thursday, June 02, 2016 4:54:09 AM
Rank: Member Joined: 8/27/2015 Posts: 138 Location: Harare		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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chiaroscuro		#3 Posted : Thursday, June 02, 2016 5:07:17 PM
Rank: Veteran Joined: 2/2/2012 Posts: 1,134 Location: Nairobi		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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chiaroscuro		#4 Posted : Thursday, June 02, 2016 5:14:07 PM
Rank: Veteran Joined: 2/2/2012 Posts: 1,134 Location: Nairobi		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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VituVingiSana		#5 Posted : Thursday, June 02, 2016 5:36:50 PM
Rank: Chief Joined: 1/3/2007 Posts: 18,344 Location: Nairobi		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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chiaroscuro		#6 Posted : Thursday, June 02, 2016 6:27:03 PM
Rank: Veteran Joined: 2/2/2012 Posts: 1,134 Location: Nairobi		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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VituVingiSana		#7 Posted : Friday, June 03, 2016 1:41:08 AM
Rank: Chief Joined: 1/3/2007 Posts: 18,344 Location: Nairobi		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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VituVingiSana		#8 Posted : Monday, June 06, 2016 7:05:51 AM
Rank: Chief Joined: 1/3/2007 Posts: 18,344 Location: Nairobi		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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murchr		#9 Posted : Monday, June 06, 2016 6:25:50 PM
Rank: Elder Joined: 2/26/2012 Posts: 15,980		"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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Ericsson		#10 Posted : Monday, June 06, 2016 11:26:52 PM
Rank: Elder Joined: 12/4/2009 Posts: 10,804 Location: NAIROBI		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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