Government sells 19.81% shares in I&M Bank Rwanda through IPO

Finance Minister Claver Gatete and I&M Bank Rwanda’s board chairman Bill Irwin sign the prospectus for the IPO.

For the past 3 weeks, the State-owned stake of 19.81% in I&M Bank Rwanda has been offered for sale to the public through an initial public offering (IPO).

The offer opened on 14th February and will close on 10th March, after which the shares will be listed on the RSE’s secondary market.

The shares cost Rwf 90 per piece, and are sold at a minimum of 1,000 shares. So with an investment of only Rwf 90,000, Rwandans can own part of the country’s oldest bank, created as Rwanda Commercial Bank (BCR) more than 50 years ago.

According to the experts handling the share sale program, 60% of the 99 million shares is reserved for Rwandans and East African citizens, while foreign investors can buy the balance of 40%.

The sale is in accordance with the government’s policy of divesting itself of public enterprises as well as its shares in private ones. I&M Bank Rwanda Ltd is a limited liability company that was incorporated as BCR in Rwanda on 25th May 1963 under the companies act, and is domiciled in Rwanda.

“The Government of Rwanda is committed to the development of the capital markets as a means of building a strong foundation for long-term financing for both the private and public sector, and also to empowering Rwandans to participate in the divestiture of government investment in private organizations,” said Finance Minister Claver Gatete.

“Selling the State’s shares in the oldest bank in Rwanda to the public is a confirmation of the government’s confidence in I&M Bank in particular and the financial sector in general,” he added.

1488803952I&M IPO (2)

Left to right: Finance Minister Claver Gatete, I&M Bank Rwanda’s board chairman Bill Irwin, RSE CEO Celestin Rwabukumba and I&M Bank Rwanda’s CEO Robin Bairstow at the launch of the IPO.

Robin Bairstow, the CEO of I&M Bank Rwanda, said the IPO gives an opportunity to ordinary Rwandans to acquire shares in the country’s oldest bank. “The bank has a rich heritage spanning over 53 years and is a pioneer in product innovation; it has posted strong growth year on year, and this offer is a strong vote of confidence in the bank’s performance over the years.”

The sale of the I&M Bank shares, which is the first IPO in East Africa this year, offers local investors an opportunity to own a solid investment, according to experts familiar with the offer. They further contend that the IPO is expected to lead to increased trading on the RSE.

“The I&M Bank Rwanda IPO is actually a breath of fresh air at RSE. It is good news for traders and investors,” remarked Davis Gathaara, managing director of Baraka Capital, transaction advisors to the offer.

“The shares present a good avenue for investment diversification, it’s an opportunity to broaden investment with good returns through dividends and capital gains in the stock market,” he said, adding that the I&M shares are all the more interesting since the bank has shown strong results over a long period of time.

Strong growth over last 50 years

I&M Bank Rwanda is a proven leader in the Rwandan banking industry in terms of sector fundamentals. For instance, the bank was voted the most efficient in terms of operational costs.

According to statistics from the National Bank (BNR), I&M Bank Rwanda emerged as the bank with the lowest cost to income ratio in the year 2015. The bank was ranked the most efficient bank in the sector with a Return of Equity (ROE) of 22.17% as of September 2016, and the third largest bank in Rwanda in terms of total assets at the end of 2015.

Among other sector fundamentals, one cannot overlook the quality asset book that I&M Bank Rwanda has managed to deliver in the market. That being the case, the bank has revised its market positioning in order to offer the full range of personal, business, institutional and corporate banking products throughout all its locations in Rwanda as well as through its presence in Kenya, Tanzania and Mauritius.

Financial Performance

The bank’s total assets grew at a Compound Average Rate (CAGR) of 16.6% during the last 5 years moving from Rwf 92.9 billion in 2011 to Rwf 172 billion in 2015.

The shareholders’ funds also increased from Rwf 12.4 billion to Rwf 24.5 billion over the same period, representing a Compound Average Rate of 25.7%. The growth in assets was largely driven by the increase in customer deposits, which grew at a 5-year Compound Average Rate of 14.7% rising from Rwf 70.6 billion in 2011 to Rwf 119.9 billion in 2015.

As deposits grew, the bank was able to push the net loan book to Rwf 94 billion from Rwf 37.6 billion by the end of the Financial Year 2015.

The drivers of the loan book growth were the construction, wholesale & retail, and agricultural sectors and by the end of the financial year 2015, the bank had loaned a total of Rwf 56.4 billion to the three sectors accounting for over 58% of the bank’s loan portfolio.

The growth in profits has enabled the bank to pay dividends consistently over the period where the total dividends paid between December 2011 and December 2015 amounted to Rwf 8 billion. The bank maintained an average payout ratio of 38% over the period.


Highlights of the I&M Bank Rwanda share offer

1. All the proceeds of the sale will accrue to the government of Rwanda.

2. I&M Bank Rwanda Ltd will not receive any proceeds from the IPO.

3. As part of the share offer, I&M Bank Rwanda Ltd has created 5,000,000 new shares that will be allotted to the bank’s employees and the sale of which will be done simultaneously with the allotment of the shares being offered by the Government of Rwanda.

4. The offer and subscription period commenced on 15th February 2017 at 9.00 am and is expected to end on 10th March 2017.

  • By I&M Bank Rwanda
  • Posted 6th March 2017


There are no comments for this article.

4  +  5 =