MAURITIUS – Financial services group  I&M Holdings has invested an additional US$3.67 million in its Mauritian subsidiary Bank One in the year ended December 2020 to boost its capital position.

The move came as Bank One sought to strengthen its capacity to handle existing and potential defaults in the course of the Covid-19 pandemic that has hurt bank earnings in most parts of the world.

The Nairobi Securities Exchange (NSE) listed firm owns 50 percent of the Mauritian lender, with the other half held by the island nation’s conglomerate CIEL Limited.

“At the half-year, our shareholders showed their commitment to Bank One with US$7.34 million Tier 1 capital injection, which was further bolstered by a US$14 million subordinated bond issue, that was very well received by the market,” the subsidiary said in its latest annual report.

“The bank now has historically high levels of capital. As a result, the Bank’s CARE rating was confirmed at A+ Stable in June 2020.”

I&M’s stake in the Mauritian bank remained unchanged since each shareholder provided its proportionate share of capital.

‘’Our shareholders showed their commitment to Bank One with US$7.34 million Tier 1 capital injection, which was further bolstered by a US$14 million subordinated bond issue that was very well received by the market”

Bank One raised its provisions significantly in the year ended December, dragging it into a loss that weighed down I&M’s consolidated earnings.

The Kenyan multinational lender reported a net loss of US$6.4 million from its ownership in Bank One in the review period, reversing a net profit of US$8.4 million recorded in the prior year.

This contributed to its consolidated net profit dropping to US$78.3 million from US$99.7 million.

I&M subsequently cut its proposed dividend to US$0.02 per share from the previous year’s pay-out of US$0.024 per share.

The lender also proposed a bonus issue of one share for every one held, a move that will double the volume of its outstanding stock to 1.6 billion units.

The group’s headquarters are located in Nairobi, Kenya, with subsidiaries in Kenya, Mauritius, Rwanda, Tanzania, and Uganda.

The conglomerate comprises banks, an insurance company and investment advisory businesses.

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