Post by Onyango Oloo on Oct 9, 2005 23:28:17 GMT 3
SBI to buy 76% in Kenya’s Giro Commercial for $8m
TIMES NEWS NETWORK[ India, SATURDAY, OCTOBER 08, 2005 01:17:01 AM]
MUMBAI: State Bank of India (SBI) on Friday said it would acquire a majority stake in Kenyan bank Giro Commercial Bank. Sources said the deal, priced at around $6-8m, would involve buying out the principal shareholders who are of Indian origin.
India's largest bank informed the BSE that it has signed a share purchase agreement to acquire 76% in Giro Commercial Bank, subject to regulatory approval.
Giro Commercial Bank has an asset base of $60m as on August 30, ‘05, and is ranked 23 among Kenyan banks in terms of asset size.
SBI said it will get management control through this acquisition. SBI chairman AK Purwar said, “With the proposed acquisition, SBI would increase its foothold in Africa, where we are already present in four other countries. SBI has developed strong skills in various aspects of banking which would be of relevance to Kenya. I expect this step would benefit not only the resident Indian community, but also facilitate trade and investment, and provide a platform for us to participate in the growth and prosperity of a friendly country.” Giro Commercial Bank was formed following the merger of Giro Bank with Commercial Bank in 1998 in the wake of a liquidity crisis faced by small banks in Kenya.
At present the Bank of India and Bank of Baroda have a strong presence in Kenya. Recently, Bank of India celebrated its 50 years of presence in Kenya by holding its board meeting in the country The closely-held Giro Commercial Bank, based in Nairobi, was founded by people of Indian origin. It has six branches in Nairobi, and one each at Mombasa and Kisumu.
This is the second overseas acquisition by the SBI. In February, the bank had bought a 51% stake in Indian Ocean International Bank in Mauritius for $8m.
Among Indian banks, ICICI Bank had acquired Russian bank Investitsionno-Kreditny Bank, with one branch in Moscow and assets of $4.4m. In Africa, SBI has one branch in Johannesburg, one representative office in Angola and one subsidiary in Nigeria called the Indo-Nigerian Bank.