I&M Group to Infuse Ush30 Billion ($7.89 Million) in Ugandan Unit for Expanding Lending Business and Meeting New Capital Standards
In a strategic move to fortify its presence in Uganda and align with the Bank of Uganda’s stringent capital requirements, I&M Group is set to inject Ush30 billion ($7.89 million) into its Ugandan subsidiary. The capital infusion, scheduled within the next six months, aims to bolster I&M Bank Uganda’s core capital to Ush150 billion ($39.47 million) by June 2024, unlocking opportunities for increased lending activities, enhanced interest income, and greater dividends for shareholders.
Since its entry into the Ugandan market in 2021 through the acquisition of Orient Bank Ltd, now rebranded as I&M Bank (Uganda), the group has been proactive in adapting to regulatory changes. The Financial Institutions (Revision of Minimum Capital Requirements) regulations set by Uganda’s Finance minister and the Bank of Uganda mandate a minimum paid-up cash capital of Ush120 billion ($31.57 million) by December 31, 2022, and a subsequent increase to Ush150 billion by June 30, 2024.
Kihara Maina, the group’s regional chief executive, affirmed compliance with these requirements and highlighted the focus on strengthening corporate operations while expanding into the SMEs and retail sectors in the Ugandan market.
“We are strong in the corporate space, and we want to expand that and, at the same time, we are looking at making sure we are relevant in the SMEs and retail spaces as well,” said Mr. Kihara.
As part of its regional expansion plan, I&M Group is also considering opportunities in the Democratic Republic of Congo (DRC), a mineral-rich market attracting major banks in the region. Despite already having operations in Kenya, Rwanda, Tanzania, Uganda, and a joint venture in Mauritius, the group remains open to new investments, following the footsteps of other regional players like KCB, Equity, and CRDB Bank Plc.
“We are actually completely compliant with these requirements. As of June 2023, we had adequately met the Ush120 billion requirement, but we have another requirement coming up from the Uganda regulator, which is that by June next year all banks have to have a minimum core capital of Ush150 billion,” explained Mr. Kihara.
The move signifies I&M Group’s commitment to strategic growth, regulatory compliance, and exploration of new opportunities in the dynamic financial landscape of East Africa.
Source: The eastern African