Imperial Bank Capital Raise Information Memorandum

INFORMATION
MEMORANDUM
Imperial Bank Limited

Incorporated in 1992 pursuant to the Companies Act Chapter 486 of the Laws of Kenya and
is registered under Registration Number C.10/2015.
INFORMATION MEMORANDUM
In respect of a Kenya Shilling Two Billion Fixed Rate Notes
Transaction Advisors
Lead Arranger, Sponsoring Broker & Sole Placing Agent
Reporting Accountant
Fiscal Agent, Registrar
Legal Advisors
Receiving Bank
Note Trustee
The date of this Information Memorandum is 12th August 2015
IMPORTANT NOTICE & DISCLAIMERS

The Issuer, having made all reasonable inquiries, confirms that this Information Memorandum contains all the information with respect to
itself and the Notes to be issued by it, which is material in the context of the Notes, that the information contained in this Information
Memorandum is true and accurate in all material respects and is not misleading; that the opinions and intentions expressed in this Information Memorandum are honestly held and that there are no other facts the omission of which would make any of such information or the
expression of any such opinions or intentions misleading. The Issuer accepts responsibility accordingly.
The Directors of Imperial Bank, whose names appear on Section 2 of this Information Memorandum, accept responsibility for the information contained herein. To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that such
is the case) the information contained herein is in accordance with facts and does not omit anything likely to affect the import of such
information. The information presented herein was prepared or obtained by the Issuer and is being furnished to the Arranger and the
Placing Agent solely for use by prospective investors in connection with the Notes. Neither of the Arrangers nor the Placing Agent or any
of their respective directors, affiliates, advisers or agents has assumed any responsibility for independent verification of the information
contained herein or otherwise made available in connection with the Notes and makes no representation or warranty as to the accuracy
or completeness of such information.
Neither this Information Memorandum nor any other information supplied in connection with the Notes is intended to provide the
complete basis of any credit or other evaluation, nor should it be considered as a recommendation by the Arranger or the Placing Agent
or any of their respective directors, affiliates, advisers or agents, that any recipient of this Information Memorandum (or any other information supplied in connection with the Issue) should purchase any Notes. Each investor contemplating purchasing a Note should make their
own independent investigation of the financial condition and affairs, and their own appraisal of the creditworthiness, of the Issuer. Each
investor is advised to conduct and rely on their own evaluation of the Issuer and the terms of the offering including the merits and risks
involved in making an investment decision with respect to the Notes. Neither this Information Memorandum nor any other information
supplied in connection with the Issue constitutes an offer or invitation to any person by or on behalf of the Arranger or the Placing Agent
or any of their respective directors, affiliates, advisers or agents to subscribe for or to purchase any Note.
Nothing contained in this Information Memorandum is to be construed as, or shall be relied upon as, a promise, warranty or representation, whether to the past or the future, by the Arranger or the Placing Agent, or any of their respective directors, affiliates, advisers or
agents, in any respect. Furthermore, neither the Arranger or the Placing Agent nor any of their respective directors, affiliates, advisers or
agents, makes any representation or warranty or assumes any responsibility, liability or obligation in respect of the legality, validity or
enforceability of the Notes, the performance and observance by the Issuer of its obligations in respect of the Notes, or the recoverability
of any sums due or to become due from the Issuer under the Notes.
The delivery of this Information Memorandum does not at any time imply that the information contained herein concerning the Issuer is
correct at any time subsequent to the date hereof or that any other information supplied in connection with the Notes is correct as of
any time subsequent to the date indicated in the document containing the same.
No person has been authorised to give any information or make any representation other than that contained in this Information Memorandum and if given or made, such information or representation should not be relied upon as having been authorised by or on behalf of
the Issuer, the Arranger or the Placing Agent or any of their respective directors, affiliates, advisers or agents.
The Notes will be publicly placed with investors and will be made available to the general public in Kenya through secondary trading on
the NSE. Applications for participation may be processed through the Placing Agent, details of which are provided in this Information
Memorandum (under Appendix I)
The Notes may not be offered or sold, directly or indirectly, and neither this document nor any other supplemental information memorandum or any prospectus, form of application, advertisement, other offering material or other information relating to the Issuer or the
Notes may be issued, distributed or published in any jurisdiction, other than Kenya. The distribution of this Information Memorandum
and the offer or sale of the Notes may be restricted by law in certain jurisdictions. Persons into whose possession this Information Memorandum or any Notes must first inform themselves about and observe any such restrictions. The Notes have not been and will not be
registered under the United States Securities Act of 1933, as amended (the Securities Act). The Notes may not be offered, sold or
delivered within the United States or to, or for the account or benefit of US persons (as defined in Regulation S under the Securities Act).
Imperial Bank Limited Note Issue

INFORMATION MEMORANDUM 2015
Reporting
IMPORTANT
Accountants
NOTICE
Report
& DISCLAIMERS
The Issuer considers that the Notes issued under this Information Memorandum will constitute a domestic issue of the Notes within
Kenya. The Arranger and the Placing Agent have represented, warranted and undertaken that they will
(i) Observe all applicable laws and regulations within Kenya;
(ii) Will not make any offer or sales of Notes under this Information Memorandum in any jurisdiction other than Kenya;
(iii) Will distribute the Information Memorandum and/or any advertisement or offering material within Kenya only under circumstances that will
result in compliance with all applicable laws and regulations; and
(iv) Will not distribute the Information Memorandum and/or any advertisement or offering material in any other jurisdiction.
It is intended by the Issuer and the Placing Agent that the Notes will only be sold pursuant to a domestic offer in Kenya, and that any investor or potential investor who purchases the Notes shall inform themselves of the risks involved in investing in the Notes and has understood that the information contained in this Information Memorandum is consistent with information that would be required in connection with a domestic offer of securities in Kenya which differs substantially from international markets. A copy of this Information Memorandum has been filed with the Registrar of Companies in accordance with the Companies Act (Chapter 486 of the Laws of Kenya).
Cautionary Statement
Prospective investors should carefully consider the matters set forth under the section Risk Factors of this Information Memorandum.
Relevant Approvals
The CMA has approved the public offering and listing of the Notes on the Fixed Income Securities Market Segment (the FISMS) of the
NSE. As a matter of policy, the CMA assumes no responsibility for the correctness of any statements or opinions made or reports
contained in this Information Memorandum. Approval of the Issue and/or listing is not to be taken as an indication of the merits of the
Issuer or of the Notes.
The NSE has authorised the Issuer to list the Notes on the FISMS. The FISMS is a segment of the official list of the NSE. The Notes have
not been and will not be registered under any other securities legislation whether in Kenya or any other country. The NSE assumes no
responsibility for the correctness of any of the statements made or opinions or reports expressed or referred to in this Information
Memorandum. Admission to the FISMS of the NSE is not to be taken as an indication of the merits of the Notes or the Issuer. The sale
or transfer of Notes by Noteholders will be subject to the rules of the NSE, and where applicable, the CDSC Rules, the Conditions of
the Notes and the provisions of the Agency Agreement. The register for the Notes will be the record of depositors maintained by the
CDSC in accordance with the Central Depositories Act, 2000. There are currently no other restrictions on the sale or transfer of the
Notes under Kenyan law. In particular, there are no restrictions on the sale or transfer of the Notes by or to non-residents of Kenya.
Forward-Looking Statements
Some statements in this Information Memorandum may be deemed to be forward-looking statements. Forward-looking statements
includes statements concerning the Issuers plans, objectives, goals, strategies and future operation and performance and the assumptions
underlying these forward-looking statements. When used in this Information Memorandum, the words anticipates, estimates,
believes, intends, plans, may, should and any similar expressions are used to identify forward-looking statements. The Issuer has
based these forward-looking statements on the current view of its management with respect to future events and financial performance.
These views reflect the best judgement of the Issuers management but involve uncertainties and are subject to certain risks the occurrence of which could cause actual results to differ materially from those predicted in the Issuers forward-looking statements and from
past results, performance or achievements. Although the Issuer believes that the estimates and the projections reflected in its forwardlooking statements are reasonable, if one or more of the risks or uncertainties materialise or occur, including those which the Issuer has
identified in this Information Memorandum, or if any of the Issuers underlying assumptions prove to be incomplete or incorrect, the
Issuers actual results of operations may vary from those expected, estimated or projected.
These forward-looking statements apply only as at the date of this Information Memorandum. Without prejudice to any requirements
under applicable laws and regulations, the Issuer expressly disclaims any obligations or undertaking to disseminate after the date of this
Information Memorandum any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or any change in events, conditions or circumstances on which any forward-looking statement is based. A
prospective purchaser of the Notes should not place undue reliance on these forward-looking statements.
IMPORTANT NOTICE & DISCLAIMERS

Financial Information
Financial information presented in this Information Memorandum is derived from the audited financial statements of this Issuer for the five
years up to 31st December 2014 and the unaudited figures for the half year period ended 30th June 2015.
Rounding
Some numerical figures included in this Information Memorandum have been subject to rounding adjustments. Accordingly, numerical
figures shown as totals in certain figures may not be an arithmetic aggregation of the figures that preceded them.
Incorporation of Documents by Reference

This Information Memorandum should be read and construed in conjunction with:
a. All supplements to this Information Memorandum circulated by the Issuer from time to time in accordance with the undertakings given
by the Issuer in the Trust Deed and as further described in the section titled Supplemental Information Memorandum; and
b. The audited annual financial statements (and notes thereto) and any audited interim financial statements published subsequent to such
annual financial statements of the Issuer for the three financial years prior to the issue of the Notes under this Information Memorandum.
These shall be deemed to be incorporated in, and form part of, this Information Memorandum and which shall be deemed to modify and
supersede the contents of this Information Memorandum as appropriate. The Issuer will provide free of charge to any person on request,
a copy of any of the documents deemed to be incorporated herein by reference, unless such documents have been modified or superseded. Requests for such documents shall be directed to the Issuer at its specified offices as set out in this Information Memorandum.
Supplemental Information Memorandum

The issuer hereby gives an undertaking to the Lead Arranger, Lead Sponsoring Broker and Placing Agent that if at any time during the
tenor of the Issue there is a significant change affecting any matter contained in this Information Memorandum the inclusion of which
would reasonably be required by investors and their professional advisors and would reasonably be expected by them to be found in this
Information Memorandum for the purpose of making an informed assessment to the Notes, the Issuer shall prepare an amendment or
supplement to this Information Memorandum or publish a replacement Information Memorandum for use in connection with any subsequent offering of Notes.
The Issuer shall seek the prior approval of the CMA and the NSE in connection with any proposed amendment or supplement to this
Information Memorandum and the Issuer shall, in addition, supply to the Lead Arranger, Lead Sponsoring Broker, the Placing Agent, the
CMA, the NSE and the CDSC in Kenya such number of copies of such supplement to this Information Memorandum or replacement
Information Memorandum as the Lead Arranger, Lead Sponsoring Broker, the Placing Agent, the CMA, the NSE and the CDSC may
reasonably require or as may be required to be provided by law. If the terms of the Issue are modified or amended in a manner which
would make this Information Memorandum, as supplemented, inaccurate or misleading, a new Information Memorandum will be
prepared by the Issuer after seeking the approval of the CMA and NSE.
THIS INFORMATION MEMORANDUM HAS BEEN APPROVED BY THE BOARD OF DIRECTORS OF IMPERIAL BANK LIMITED AND HAS BEEN
ISSUED IN COMPLIANCE WITH THE REQUIREMENTS OF THE CAPITAL MARKETS ACT (CAP 485A), THE CAPITAL MARKETS (SECURITIES)
(PUBLIC OFFERS, LISTING AND DISCLOSURES) REGULATIONS, 2002, THE RULES OF THE NAIROBI SECURITIES EXCHANGE LIMITED AND
THE COMPANIES ACT (CAP 486).
Mr. Abdulmalek Janmohamed

GROUP MANAGING DIRECTOR

Mr. Alnashir Popat

CHAIRMAN
1. List of Contacts
The Issuer Imperial Bank Limited
Reporting Accountants PKF Kenya
Imperial Court. Westlands Road, Westlands

P.O. Box 44905, 0010, Nairobi, Kenya
Kalamu House, Grevillea Grove, Westlands

P.O. Box 14077 - 00800, Nairobi, Kenya

Group Managing Director
Tel: +254 (20) 2874000
Fax: (020) 2719498
Email: info@imperialbank.co.ke
Mr. Asif Chaudhry

Partner
Tel: +254 732 144 000 or +254 20 4270000
Email: achaudhry@ke.pkfea.com
Receiving Bank Imperial Bank Limited

Mr. James Kaburu
Chief Finance Officer
Tel: +254 (20) 2874238
Fax: (020) 2719498
Email: james.kaburu@imperialbank.co.ke
Imperial Court, Westlands Road, Westlands

P.O. Box 44905, 00100, Nairobi, Kenya
Mandated Lead Arranger & Sole Placement

Agent Dyer & Blair Investment Bank
Mr. James Kaburu

Chief Finance Officer
Tel: +254 (20) 2874000
Fax: (020) 2719498
Email: james.kaburu@imperialbank.co.ke
10th Floor, Pension Towers, Loita Street

P.O. Box 45396 00100, Nairobi, Kenya
Fiscal Agent & Registrar Image Registrars
Mrs. Leah Nyambura-Kagumba

Corporate Finance
Tel: +254 709 930 122
Fax: +254 (20) 3240114
Email: leah@dyerandblair.com
Ms. Cynthia Mbaru
Corporate Finance
Tel: +254 709 930 137
Fax: +254 (20) 3240114
Email: cmbaru@dyerandblair.com
Legal Counsel Hamilton,

Harrison & Mathews (HH&M)
4th Floor ICEA Building, Kenyatta Avenue
P.O. Box 30333 00100, Nairobi, Kenya
Barclays Plaza, Loita Street

P.O. Box 9287 00100 GPO, Nairobi, Kenya
Mr. Lawrence Kibet
Chief Executive Officer
Tel: +254 20 2230330, +254 20 2230333
Fax: + 254 020 2212120
Email: info@image.co.ke
Note Trustee Ropat Trust Company

Kenya-Re Towers, Off Ragati Road
P.O. Box 1243-00100, Nairobi, Kenya
Mr. Robert K. Ndungu
Chief Executive Officer
Tel: +254 (20) 2723322
Fax: + 254 (20) 2723474
Email: rndungu@africaregistrars.co.ke
Andrew Mugambi
Partner
Tel: +254 (20) 3258000, +254 722453202
Fax: +254 (20) 3258222
Email: amugambi@hhm.co.ke
Sigee Koech
Associate
Tel: +254 (20) 3258275, +254 722453202
Fax: +254 (20) 3258222
Email: skoech@hhm.co.ke

2. Corporate Information
NAME
Mr. Alnashir Popat
NATIONALITY ADDRESS
Kenyan
P.O. Box 4829600100 Nairobi
GROUP MANAGING Kenyan

DIRECTOR
Mr. Anwar Hajee
NON-EXECUTIVE
Kenyan
P.O. Box 40093-00100 Nairobi
Mr. Jinit Mohanlal Shah
NON-EXECUTIVE
Kenyan
P.O. Box 16 Thika
Mr. Mukesh Kumar Patel
NON-EXECUTIVE
Kenyan
Mr. Vishnu Dhutia
NON-EXECUTIVE
Kenyan
P.O. Box 81004 Mombasa
Mr. Hanif Somji
NON-EXECUTIVE
Kenyan
P.O. Box 90682 Mombasa
Mr. Eric Gitonga Bengi
NON-EXECUTIVE
INDEPENDENT
Kenyan
Mr. Omurembe Iyadi
NON-EXECUTIVE
INDEPENDENT
Kenyan
Mr. Christopher Diaz
NON-EXECUTIVE
INDEPENDENT
Kenyan
POSITION

CHAIRMAN
Other Corporate Information
Company Secretary
Equatorial Secretaries and Registrars
Registered Office
Imperial Court
Westlands Road, Westlands
P.O. Box 44905 -00100, Nairobi, Kenya
Auditors
PKF Kenya
Kalamu House, Grevillea Grove
Subsidiary
Imperial Bank (Uganda) Limited
Plot 6, Hannington Road
P.O. Box 36206, Kampala, Uganda
Holding Company
Imperial Securities Limited
Westlands Road, Westlands
P.O. Box 44905 -00100, Nairobi, Kenya
Financial Year End

31st December

3. Definitions and Interpretations

In this Information Memorandum, its appendices and enclosures, unless otherwise stated, the words in the first column have the meaning
stated opposite them in the second column, words in the singular include the plural and vice versa, words signifying one gender include
the other gender and references to a person include references to juristic persons and associations of persons:
Agency Agreement The agreement dated 12th August 2015 between the Fiscal Agent and Registrar
and the Issuer, together with any agreement for the time being amending or modifying any such agreements;
Applicable Laws Any laws or regulations (including any foreign exchange rules or regulations) of any
governmental or other regulatory authority which may govern the Issue, the Conditions of the Notes and the Notes issued thereunder in accordance with which the
same are to be construed;
ALCO The Banks Assets and Liabilities Committee, whose members are drawn from the
Banks management
Allotment Date The date specified as in the Information Memorandum on which the Notes are
allotted to the successful applicants;
Alternative Rate If on any Interest Determination Date there are not 182-day Treasury Bill Rates
quoted within the 30 days preceding the Interest Determination Date, and/or, such
Treasury Bills are no longer issued by the Central Bank of Kenya, then the Interest
Rate for the relevant Interest Period shall be the 91-TBill rate; and if there is no
outstanding 91- T-Bill within the 30 days preceding the Interest Determination Date,
then the latest prevailing Central Bank Rate rounded upwards if necessary to the
nearest fifth decimal place.;
Arranger & Placing Agent Dyer and Blair Investment Bank Limited;
Banking Act Banking Act (Chapter 488 of the Laws of Kenya);
Board or Directors The board of directors of Imperial Bank as indicated;
Books Closed Period The period which is ten days prior to each Interest Payment Date until the redemption in full of the Notes
BOU The Bank of Uganda
Business Day Any day other than a Saturday, Sunday or a gazetted public holiday in the Republic
of Kenya;
CD Act The Central Depositories Act (Act 4 of 2000) and the rules and regulations issued
thereunder
CDSC The Central Depository and Settlement Corporation;
CDS The Central Depository System, an electronic system which permits or facilitates the
deposit and the settlement or registration of securities transactions or dealings in
securities on the NSE;
CDS Account An account opened and maintained with the CDSC in accordance with the Central
Depositories Act (Act 4 of 2000) and the rules and regulations issued thereunder;
CEO Chief Executive Officer;
Closing Date The time and date specified as such in the Information Memorandum, being the time
and the date on which applications from potential investors will be accepted for that
particular Tranche;
CMA The Capital Markets Authority of Kenya, a statutory regulatory authority established
under the Capital Markets Act;
Capital Markets Act The Capital Markets Act (Chapter 485A of the Laws of Kenya);
Central Bank of Kenya or CBK The Central Bank of Kenya, a statutory corporation established under the Central
Bank of Kenya Act (Chapter 491 of the Laws of Kenya);
Companies Act The Companies Act (Chapter 486 of the Laws of Kenya);
Conditions The terms and conditions to be endorsed on and regulating the Note Certificates in
the form set out in the Section titled Terms and Conditions of the Notes of this
Information Memorandum and Schedule 1 of the Trust Deed;


ED Executive Director;
Event of Default Any of the circumstances described in Condition 11 (Events of Default)
Fiscal Agent The institution initially appointed as, paying agent and calculation agent in relation to
the Notes being issued by the Issuer and if applicable, any successor.
FISMS The Fixed Income Securities Market Segment of the Nairobi Securities Exchange;
Fixed Rate Note Notes in respect of which the interest is to be calculated and paid on a fixed rate
basis as provided in Condition 6 in the section Terms and Conditions of the
Notes;
Holding Company Imperial Securities Limited;
Interest Payment Date The dates on which interest on the Notes will be paid as indicated in the Information
Memorandum;
IM or Information Memorandum This Information Memorandum dated 12th August 2015, together with its Appendices and Application Form;
Issue Agreement Means the agreement dated 12th August 2015 entered into by the Issuer with the
Placing Agent;
Issue Date The date upon which the Notes are issued, as specified in this Information Memorandum ;
Issue The issue of KShs two billion medium term unsecured and subordinated notes by
Imperial Bank Limited.
IBL or Bank or Issuer Imperial Bank Limited, a public company incorporated under the Companies Act
(Registration Number, C.10/2015) and licensed by the CBK as a commercial bank;
IBL (K) Imperial Bank Kenya Limited
IBL (U) Imperial Bank Uganda Limited
Imperial Group Imperial Bank and its Holding Company, Subsidiaries and Associates;
Imperial Bank- Ug Imperial Bank (Uganda) Limited a company incorporated in the Republic of Uganda,
under registration number 118309, and licensed by BOU as a commercial bank;
ISL Imperial Securities Limited
KES or KShs Kenya Shillings, being the lawful currency of the Republic of Kenya;
MIMS The Main Investment Market Segment of the Nairobi Securities Exchange;
Last Day to Register or Record Date 1700 hours on the last Business Day before the first day of a Books Closed Period;
Lead Sponsoring Broker Dyer and Blair Investment Bank Limited;
NSE The Nairobi Securities Exchange;
Notes The instrument in registered form, comprising in the aggregate up to KES
2,000,000,000/- issued pursuant to the Trust Agreement and; subject to the Conditions and for the time being outstanding;
Note Agent Means the Fiscal Agent and the Registrar or any of them and their respective Successors from time to time;
Note Documents Means the Trust Deed, the Agency Agreement and the Information Memorandum;
Note Trustee Ropat Trust Company Limited
Noteholders The several persons who are for the time being holders of the Notes (being the
several persons whose names are entered in the register of holders of the Notes as
the holders thereof) and the words holder and holders and related expressions
shall (where applicable) be construed accordingly;
Opening Date The date on which the Issue will open and applications may be sent to the Placing
Agent;
Payment Account The account denominated in Kenya Shillings (IMPERIAL BANK A/C LI20109) in the
name of the Issuer held with the Fiscal Agent or such other account held with such
bank as the Issuer may (with the prior written consent of the Fiscal Agent) from time
to time by notice to the Fiscal Agent specify for the purpose of making payments to
the Noteholders;


Principal Repayment Date The date(s) so specified in this Information Memorandum as the date(s) on which
payment(s) of the principal amount of the Notes shall fall due;
Prudential Guidelines/Regulations The Prudential Guidelines for banking institutions licensed under the Banking Act
(Chapter 488 of the Laws of Kenya) issued by the Central Bank of Kenya pursuant
to the provisions of the said Act;
Reference Rate The benchmark interest rate as specified in this Information Memorandum for the
Notes to be issued;
Register The official record of Noteholders in the CDS as maintained by the CDSC pursuant
to section 25 of the CD Act;
Registrar The institution appointed or acting as Registrar pursuant to the Conditions and the
Agency Agreement, or if applicable, any successor Registrar at its Specified Office;
Senior Creditors All such persons who are not expressly stated in any contract, agreement or other
arrangement between the Issuer and any such person, to be subordinated creditors
of the Issuer and (b) all persons who are expressly stated in any contract, agreement
or other arrangement between the Issuer any such other person to be subordinated
creditors of the Issuer (other than the Noteholders in their capacity as holders of the
Notes);
Specified Office Means, in relation to the Issuer, the Trustee or any Note Agent, either the office
identified with its name in the Conditions or any other office notified to any relevant
parties pursuant to the Trust Deed or the Agency Agreement;
Subsidiaries or Associates Imperial Bank Uganda;
Successor Means, in relation to any party appointed under the Issue, any successor to any one
or more of them which shall become a party pursuant to the provisions of these
presents and/or such other or further agent (as the case may be) in relation to the
Notes as may from time to time be appointed as such, and/or, if applicable, such
other or further specified offices as may from time to time be nominated, in each
case by the Issuer and (except in the case of the initial appointments and specified
offices made under and specified in the Conditions) notice of whose appointment
or, as the case may be, nomination has been duly given to the Noteholders;
"Tier 2 Capital Supplementary capital as defined in the Banking Act and the Prudential Regulations;
Trust Deed The agreement dated 12th August 2015 appointing the Note Trustee and any other
agreements for the time being in force appointing a Successor note trustee or in
relation to the Notes, or in connection with the Note Trustees duties, together with
any agreement for the time being in force or modifying any such agreement;

CONTENTS
IMPORTANT NOTICE & DISCLAIMERS.....................1

1. List of Contacts.......................................................................4
2. Corporate Information.......................................................5
3. Definitions and Interpretations......................................7
4. Timetable..................................................................................11
5. Transaction Overview......................................................12
6. Use of Proceeds..................................................................14
7. Terms and Conditions of the Notes.....................15
8. Subscriptions for the Notes &
Selling Restrictions ................................................................21
9. Tax Considerations.............................................................23
10. Economic Overview........................................................24
CONTENTS
11. Industry Overview.........................................................32

12. Profile of the Issuer.......................................................37
13. Corporate Governance..............................................45
14. Risk Factors........................................................................57
15. General & Statutory
Information.......................................................................61
16. Legal Opinion...................................................................68
17. Reporting Accountants Report..............................71
Appendix I Sample Application Form...............183
Appendix II Branch Outlets.....................................187
Appendix III Unaudited Financial
Statements as at 30th June 2015..........................188
4. Timetable
OFFER TIME TABLE
EVENT
DATE
1. Approvals from CMA and Printing
Thursday 12th August
2. Offer Opens
Monday 24th August
3. Offer Closes
Thursday 17th September
4. Date of Allocation
Tuesday 22nd September
5. Announcement Date to Investors
Tuesday 22nd September
6. Settlement Date
Monday 28th September
7. Announcement of Results to CMA
Wednesday 30th September
8. Public Announcement
Friday 2nd October
9. Crediting of Notes to CDS accounts

(and refunds, if any)
Tuesday 6th October
10. Listing and commencement of trading

on the Nairobi Securities Exchange
Tuesday 13th October
These dates are subject to change and are indicative only. IBL reserves the right to amend this indicative timetable, a supplementary
timetable will be issued. In particular, IBL reserves the right, to close the Offer early, to extend the Closing Date or to withdraw the
Offer. Any amendment of the Closing Date will have a consequential effect on the issue date and will also require the approval from
CMA.
Bank Limited Note Issue

11 Imperial
5. Transaction Overview
DETAILS OF THE OFFER
The following summary does not purport to be complete and is taken from, and is qualified in its entirety by, the remainder
of this Information Memorandum.
Issuer
Description
Arranger
Issue Amount
Use of Proceeds
Currency
Placing Agent
Fiscal Agent and Registrar
Note Trustee
Reporting Accountant
Legal Counsel
Denomination of Notes
Minimum Subscription Level
Minimum Subscription Amount
Tenor
Interest Rate
Issue Price
Rate of Interest
Interest Payment
Default Interest
Principal Redemption
Status of the Notes
Form of Notes
Taxation
Allotment Date

Unsecured subordinated Notes denominated in Kenya Shillings (the Issue)
Dyer and Blair Investment Bank
Up to Kenya Shillings Two Billion (KShs 2,000,000,000/-)
For working capital on an adhoc basis and to further strengthen the capital base.
Kenya Shilling (KShs or KES) or any successor currency
Dyer and Blair Investment Bank
Image Registrars
Ropat Trust Company
PKF Kenya
Hamilton, Harrison and Matthews
The Notes shall be issued in minimum denominations of KShs 100,000 and integral
multiples of KShs 50,000/- in excess thereof
For the issue to be successful, a minimum of 50% of the amount issued or such other
amount as specified in this Information Memorandum
The minimum subscription amount will be KShs 1,000,000 thereof
5 years 3 months
The Fixed Rate Notes will bear interest at a fixed rate of 15% and more fully described
in the Terms and Conditions.
Notes will be issued on a fully paid basis at par
Such rate(s) and which is a fixed interest rate as indicated in the Information Memorandum.
Interest will be paid semi-annually in arrears (each an Interest Payment-Date) as per
the interest payment schedule as indicated in the Information Memorandum. Interest
will be calculated on the basis of a 364-day year
The rate per annum, which is the aggregate of the Rate of Interest plus a default margin
of 2% for the Fixed Rate Notes
Upon maturity on 21st December 2020
The Notes will constitute direct, general, unsecured and subordinated obligations of the
Issuer and will rank pari passu among themselves and after all subordinated creditors of
the Issuer including depositors and general creditors.
The Notes will be issued in book entry form. Each Noteholder will be required to open
a CDS Account which will be credited with the amount of the Notes in accordance
with the prevailing CDSC Rules.
Interest on the Notes will be subject to withholding tax at the applicable rates in accordance with the Laws of Kenya. Unless otherwise exempted, the Noteholders shall be
paid interest after deduction of such taxes.
Tuesday 22nd September 2015

12
5. Transaction Overview
DETAILS OF THE OFFER
Allotment Policy
Compliance
Listing
Costs of Issue
Negative Pledge
Governing Law
Guarantee

13 Imperial
IBL and the Arranger will determine the allotment of Notes at their sole discretion. IBL
reserves the right, whether the Issue is over-subscribed or not, to reject any application
in whole or in part and may therefore allot less than the amount applied for. Subject to
the sole discretion above, allotment will be done on the following basis:
In the event that the total number of Notes subscribed for by applicants is equal to or
less than the Issue amount, all subscriptions will be allocated in full as per the number
of Notes applied for by applicants.
The issue, placement and transfer of Notes will comply with the following:
a. The Issuers Memorandum and Articles of Association;
b. The requirements of the Capital Markets Authority and Nairobi Securities Exchange
for approval of the issue and listing of the Notes;
c. The Capital Markets Authority and Nairobi Securities Exchange reporting require
ments from time to time;
d. The Central Depositories Act, 2000 and any applicable rules of the Central Deposi
tory and Settlement Corporation Limited; and
Any other applicable provisions of the law in Kenya relating to debt capital markets that
is in existence or that may be passed before the Issue or while the Notes are still
outstanding.
The Notes will be listed on the Fixed Income Securities Market Segment of the Nairobi
Securities Exchange.
The costs of Issue will be borne by the Issuer. The costs of the Issue are as indicated on
Section 15.26
The Issuer agrees that, so long as any Notes remain outstanding, it shall not create or
permit to subsist any mortgage, charge, lien, pledge or other security interest upon or
with respect to any of its undertakings, assets or revenues to secure any future indebtedness evidenced by notes, bonds or other securities which are or which are capable
of being, at the request of the Issuer quoted, listed or dealt in for the time being on any
stock exchange or any other similar generally recognized market for securities unless (a)
the Notes are secured equally and rateably therewith; or (b) by providing such other
security or arrangement as may be approved by Extraordinary Resolution of the Noteholders; unless the provision of any such security is waived by an Extraordinary Resolution of the Noteholders.
The Notes will be construed in accordance with, and governed by, Kenyan Law.
The Notes are not secured and therefore no guarantee is provided. The repayment of
the debt securities and the payment of interest will be funded from the general earnings
of the Issuer.
6. Use of Proceeds
Proceeds of the Notes will be used to support the Groups funding base strategy and thereby increase the loans and advances and other
assets of the Group, as well as enhance the Banks capital adequacy ratios in line with Basel II requirements and CBK Prudential Guidelines.
Application of the Notes as Tier 2 Capital will also bolster the Banks balance sheet for purposes of efficient capital management. Funds
received will also be used for the regional expansion and growth of the business and thereby support the Banks medium term strategy.
In the opinion of the Directors having taken into account the above, the proceeds of the medium term Notes are sufficient for the Banks
present requirements.

14
7. Terms and Conditions of the Notes

The following are the terms and conditions of the Issued Notes
(the Conditions).
The Notes are issued subject to, a Trust Deed dated 12th August
2015 (the Trust Deed) between the Issuer and Ropat Trust
Company Limited as the note trustee (the Note Trustee) and
an Agency Agreement dated 12th August 2015 (the Agency
Agreement) between the Fiscal Agent and Registrar and the
Note Trustee. The holders of the Notes (the Noteholders)
are deemed to have notice of and are entitled to the benefit of
all the provisions of the Trust Deed and the Agency Agreement
(together, the Note Documents), which are binding on them
or on the Note Trustee on their behalf. Copies of the Note
Documents are available for inspection at the Specified Offices of
the Issuer and the Registrar and Fiscal Agent.
Words and expressions defined in the Trust Deed and the rules
of interpretation specified therein shall have the same meanings
or apply where used in the Conditions, unless the context otherwise requires or unless otherwise stated.
The Notes are freely transferable. A Note may be transferred in

whole or in part provided the minimum face value of the Notes to
be transferred and the residual value of the Notes which will
continue to be held by the relevant transferor (if any) is in a Specified Denomination, and title to such Notes shall pass upon the
registration of book-entry transfers in accordance with the CD Act.
The transfers will be subject to such charges as may be levied by the
CDSC, NSE, CMA or any other regulatory body or authority or
market intermediary through whom the order is made.
Books Closed Periods. No Noteholder may transfer or require the
transfer of any interest in any Note to be registered during a Books
Closed Period.
4. Status of the notes-Subordinated debt

instrument
It is the intention of the Issuer that the Notes should qualify as
supplementary capital for purposes of the Prudential Regulations of
the Central Bank of Kenya. Accordingly, the Notes and the obligations of the Issuer thereunder constitute direct and unsecured
obligations of the Issuer and rank and will rank
1. Form and Denomination

The obligations of the Issuer in respect of each Note constitute
separate and independent obligations which each Noteholder is
entitled to enforce subject to these Conditions and the Note
Documents. The Notes are issued in Kenya Shillings, are in
registered form and are in denominations of KShs 100,000/- and
integral denominations of KShs 50,000/- in excess thereof (the
Specified Denominations).
The Notes are issued as dematerialised and constitute registered
debt obligations of the Issuer constituted by and owing under
these Conditions and the Note Documents. No physical notes
will be issued.
The Notes will attract interest at a fixed rate (Fixed Rate
Notes) of 15%.
(a) equally inter se and

(b) fully subordinated to the claims of Senior Creditors, with the further
proviso that if at any time an order is made or a resolution is passed for
the winding up of the Issuer, then any payment of any amount due
hereunder which would fall due for payment while the Issuer is insolvent
or in insolvent liquidation will not fall so due and instead, any unpaid
amount will become due for payment only if and when to the extent
that the Issuer could make such payment in whole or in part and still
be solvent thereafter. Nothing in this Condition will preclude or prevent
any Noteholder or the Note Trustee from presenting any petition to
wind up the Issuer. The Issuer will provide such information, evidence
or opinions as the Noteholders (acting through the Note Trustee) might
request in the event of any amount due under the Notes being withheld
or unpaid pursuant to the application of this Condition.
2. Title
The Notes are not convertible to ordinary shares.
Title to the Notes will be evidenced by means of a book entry in

the CDSC Account of each Noteholder held with the CDSC in
accordance with the CD Act. Each entry in the CDSC Account
of a Noteholder constitutes a separate and individual acknowledgement to the relevant Noteholder of the indebtedness of the
Issuer to the relevant Noteholder.
3. Transfer of Notes
All transfers of Notes and entries in the Register will be made
subject to the detailed regulations concerning transfers of Notes
(the Applicable Procedures) set forth in the Agency Agreement.

15 Imperial
5. Future Issues
Nothing contained in the Note Documents or the Information
Memorandum shall preclude the Issuer from, at any time, issuing
further Notes or otherwise raising additional capital on this or any
other terms and conditions.

6. Interest
a. Payment of Interest
The Notes bear interest on their outstanding principal amount
from the Issue Date at the Interest Rate as determined below.
Interest on each Note will be payable semi-annually in arrears
on the dates indicated in the Information Memorandum
commencing on the date specified (each an Interest Payment
Date) until the principal amount is repaid in full.
If any Interest Payment Date would otherwise fall on a day,
which is not a Business Day, the next following Business Day
shall be substituted for such day, unless such Business Day falls
in the next calendar month, in which case the immediately
preceding Business Day shall be substituted therefore. The
period beginning on and including the date of the relevant
issue and purchase of the Notes (the Issue Date) and ending
on (but excluding) the first Interest Payment Date, and each
successive period beginning on (and including) an Interest
Payment Date and ending on (but excluding) the next Interest
Payment Date is called an Interest Period
No.
Calculation of the Interest Rate:

The Interest Rate for Fixed Rate Notes shall be as specified in this
Information Memorandum.
c. Calculation of Interest Amounts
The Fiscal Agent will as soon as practicable, but in any event no
later than two Business Days prior to the date on which interest
for a particular Interest Payment Date begins to accrue (the
Interest Determination Date), compute the amount of
interest payable (the Interest Amount) for the relevant Interest
Period.
For each Interest Payment Date, the Interest Amount shall be
calculated by applying the Interest Rate to the outstanding principal amount of the Notes, multiplying such sum by the actual
number of days in the relevant Interest Period divided by 364 and
rounding the relevant figure to the nearest Shilling (fifty cents
being rounded upwards).
The computation of each Interest Amount by the Fiscal Agent
shall (in the absence of manifest error) be final and binding upon
all parties.
Interest Payment Date
28th March 2016
26th September 2016
27th March 2017
25th September 2017
26th March 2018
24th September 2018
25th March 2019
23rd September 2019
23rd March 2020
10
21st September 2020
11
21st December 2020
b. Accrual of Interest
Interest on each Note will cease to accrue in respect of any
redeemed principal, unless payment of principal on the
relevant Principal Repayment Date (as defined below) or,
where applicable the due date for early redemption, is improperly withheld or refused. In such event, each Note shall
continue to bear interest in accordance with the provisions of
this Condition 6 (Interest) until whichever is the earlier of (i)
the date on which all sums due in respect of such Note have
been paid; and (ii) five days after the date on which the full
amount of monies payable has been received by the Fiscal
Agent and notice to that effect has been given to the Noteholders in accordance with Condition 15 (Notices).
d. Notification of Interest Rate and Interest Amounts

The Fiscal Agent will cause each Interest Amount for each
Interest Period and the relevant Interest Payment Date to be
notified to the Issuer and the Noteholders in accordance with the
Agency Agreement and Condition 15 (Notices) and to the
Nairobi Securities Exchange as soon as possible, but in any event
no later than the fourth Business Day after the Interest Determination Date.
7. Payments
7.1.1. Payment of amounts due on the final redemption of the
Notes (the Final Redemption Amount(s)) will be in accordance with the CD Act.
7.1.2. Payments of amounts due on any prepayment of the
Notes (the Early Redemption Amounts) will be made in
accordance with the CD Act.
7.1.3. Interest and principal amounts due on redemption shall
only be payable to Noteholders registered as such on the Last
Day to Register immediately preceding the relevant Interest
Payment Date or relevant redemption date (as the case may
be).
7.1.4. Subject to Condition 7.2.1, payment of Interest and
principal amounts in excess of Kenya Shillings One Million
(KShs. 1,000,000.00) shall be made by the Fiscal Agent via
electronic funds transfer to the account designated for the
purpose by the Noteholder.

16

Payment by electronic funds transfer shall be a valid discharge
by the Issuer upon it to pay Interest and any principal amount.
In the event that for any reason, payment by means of
electronic funds transfer is not possible, payment will be made
by cheque in the manner set out in the remainder of this
Condition 7 (Payments).
7.1.5. Payment of Interest and principal amounts less than
Kenya Shillings One Million (KShs. 1,000,000.00) shall be made
by cheque on a bank account drawn in Nairobi and posted to
the address as recorded in the CDSC Account of the Noteholder unless prior to the relevant date the Noteholder has
applied to the Registrar and the Registrar has acknowledged an
application for payment to be made by electronic funds transfer as provided in clause 7.1.4 above.
7.1.6. Cheques or EFT in payment of Interest and principal
amounts shall be drawn/made on the Issuer or the Fiscal Agent
and issued by the Issuer or the Fiscal Agent as the case may be.
Payment of cheques/EFT shall be a valid discharge by the Issuer
of the obligation upon it to pay Interest or the Redemption
Amount on redemption, as the case may be. Cheques/EFT
shall be dated with the relevant Interest Payment Date or
Redemption Date, as the case may be, and shall therefore be
payable on that date.
7.1.7. Neither the Issuer nor any of the Note Agents (if any
Note Agent is different to the Issuer) or the Note Trustee will
be responsible for any loss in transmission of any cheque
posted by way of registered post and the postal authorities
shall be deemed to be the agent of the Noteholders for the
purposes of all cheques so posted.
7.1.8. All payments of principal amounts and Interest in respect
of the Notes are subject in all cases to any Applicable Laws,
fiscal or otherwise in the place of payment, but without prejudice to the provisions of Condition 9 (Taxation). No commissions or expenses shall be charged to the Noteholders in
respect of such payments.
7.2. Payments on Business Days and Late Payments
7.2.1. Where payment is to be made by electronic funds transfer to a Noteholders account, payment instructions (for value
the due date or, if that is not a Business Day, for value the first
following Business Day) will be initiated on the due date for
payment of interest or the principal amount (in the event of a
partial of full redemption) as applicable.
7.2.2. Where payment is to be made by cheque, the cheque
will be posted by registered post (i) on the Business Day
immediately preceding the due date for payment of interest or
the principal amount (in the event of a partial of full redemption) as applicable.

17 Imperial
7.2.3. If (otherwise than by reason of the application of Conditions 7.2.1 and 7.2.2) (a) payment of a principal amount is
withheld or refused when due in respect of any Note, or (b) any
Interest is not paid when due (the defaulted amounts mentioned
in (a) and (b) above being referred to in this Condition as
Defaulted Amounts) then interest shall accrue on each such
Defaulted Amount at the Default Rate and shall be paid to a
person who is shown as the Noteholder on the relevant Record.
Default Rate means the applicable Interest Rate plus a margin
of 2% per annum.
7.3. Interpretation of Principal Amount
Any reference in these Conditions to a principal amount in
respect of the Notes shall be deemed to include as applicable:
7.3.1. The Final Redemption Amount(s) of the Notes;
7.3.2. The Early Redemption Amount(s) of the Notes; and
7.3.3. Any premium and any other amount, excluding Interest,
which may be payable by the Issuer under or in respect of the
Notes.
7.4. Currency of Accounts and Payments
The currency of account and for any sum due from the Issuer
hereunder is the Kenya Shilling, or any successor currency.
8. Redemption and purchase of notes by

the issuer
8.1. Redemption
Unless previously redeemed, or purchased and cancelled from
the relevant Noteholders CDSC Account, each Note shall be
redeemed on the date(s) indicated in the Information Memorandum, each date for payment being a Principal Redemption
Date.
8.2. Early Redemption
The Issuer may (i) at any time, if by reason of any change in Applicable Laws or regulations, the Notes cease to qualify as supplementary capital in terms of Condition 4 (Status of the Notes
Subordinated Debt Instrument ) (and subject to receiving such
approvals from the Central Bank of Kenya as might be required)
and (ii) at any time after the fifth anniversary of the Issue Date,
redeem all or part of the principal amount of the Notes earlier
than in accordance with Condition 8.1 (a) (Redemption)
(together with interest accrued to the date of redemption)
subject to the following conditions:
i. The Fiscal Agent has received from the Issuer (if the Fiscal Agent is
different to the Issuer) not less than 30 days prior written notice
(which such notice shall also have been given to the Noteholders in
accordance with Condition 15 (Notices) specifying the date on which
the principal amount is to be redeemed, such date to be a Principal
Repayment Date or an Interest Payment Date;

ii. Each partial redemption shall be of an aggregate principal
amount of not less than KShs 100,000,000/- (Kenya Shillings One
Hundred Million only) and an integral multiple of KShs
50,000,000/- (Kenya Shillings Fifty Million only); and
iii. No early redemption may be made before the date (if any)
stipulated in this Information Memorandum.
The amount of each early redemption shall be applied to the
principal amount of the Notes in inverse order of maturity
(unless otherwise advised in writing by the Issuer), and pro rata
against the Issuers obligations under the Notes.
8.3. Purchases
The Issuer may at any time purchase Notes at any price in the
open market or otherwise. In the event of the Issuer purchasing Notes, such Notes may (subject to any approvals required
from the relevant stock exchange and/or the CMA or to any
restrictions under any Applicable Laws) be held, resold or, at
the option of the Issuer, cancelled in terms of and in accordance with these Conditions.
The Notes so purchased, while held by or on behalf of the
Issuer, shall not entitle the holder to vote at any meeting of the
Noteholders and shall not be deemed to be outstanding for
the purposes of calculating quorum at meetings of the Noteholders or for the purposes of Condition 16 (Meetings of
Noteholders Modification and Waiver).
8.4. Cancellation
All Notes which are redeemed or surrendered shall forthwith
be cancelled and may not be reissued or resold and the obligations of the Issuer in respect of such Notes shall be wholly
discharged.
9. Taxation
9.1. All payments in respect of the Notes will be made without
withholding or deduction for, or on account of, any present or
future taxes, duties, assessments or governmental charges of
whatever nature (Taxes) imposed or levied by, or on behalf
of, Kenya, or any political sub-division of, or any authority in, or
of, Kenya having power to tax, unless such withholding or
deduction of Taxes is required by law.
9.2. The Issuer (or the Fiscal Agent, as the case may be) will
deduct withholding tax at the prescribed rate on all interest
payments to Noteholders other than any Noteholder who (a)
is exempt from such deduction under the provisions of the
Income Tax Act (Chapter 470 of the Laws of Kenya) and (b)
has provided evidence of such exemption to the reasonable
satisfaction of the Issuer.
10. Unclaimed Assets

Subject to the provisions of the Unclaimed Financial Assets Act
(no. 40 of 2011) and the CD Act, the Notes will be presumed
abandoned after a period of three (3) years in the case of principal and three years in the case of Interest after the Relevant Date
(as defined below) if:
i. for more than three years, a Noteholder has not claimed Interest or
the Early Redemption Amount or the Final Redemption Amount as
applicable, or any other sum payable on the Notes or the Noteholder
has not communicated with the Issuer or the Note Trustee regarding
the Interest or the principal amount as applicable, as evidenced by a
memorandum or other record on file with the Issuer or the Note
Trustee; and
ii. the Issuer or the Note Trustee does not know the whereabouts of
the Noteholder at the end of the three year period.
As used herein, the Relevant Date means the date on which
such payment first becomes due, except that, if the full amount of
the moneys payable has not been duly received by the Paying
Agent on or prior to such due date, it means the date on which,
the full amount of such moneys having been so received, notice
to that effect is duly given to the Noteholders in accordance with
Condition 15(Notices)
11. Events of Default

An Event of Default shall have occurred in the case of Notes, if:
11.1. Non-payment
The Issuer fails to pay any principal amount which is due in
respect of the Notes or the Issuer is in default with respect to the
payment of Interest on any of such Notes and such default
continues for a period of seven(7) Business Days (provided that
the Issuer shall not be in default if, during such period, it satisfies
the Note Trustee that the amounts not paid were not paid
(i) in order to comply with any Applicable Laws or the Prudential
Regulations or order of any court or competent jurisdiction or
(ii) in case of doubt as to the validity or applicability of any such law,
regulation or order, in accordance with advice as to such validity or
acceptability given at any time during such period by independent
advisers acceptable to the Note Trustee); or
11.2. Breach of Other Obligations
The Issuer is in default in the performance, or is otherwise in
breach, of any warranty, covenant, obligation, undertaking or
other agreement under the Notes (other than non-payment
under the Notes) and such default or breach (if capable of
remedy) is not remedied within thirty (30) Business Days (or
such longer period as the Note Trustee may in its sole discretion
determine) after notice thereof has been given to the Issuer and,
if applicable, by the Note Trustee; or
18

11.3. Cross-default
(i) any indebtedness of the Issuer, (a) becomes due and
payable prior to the due date for payment thereof by reason
of any default by the Issuer or (b) is not repaid at maturity as
extended by the period of grace, if any, applicable thereto or
(ii) any guarantee given by the Issuer in respect of any indebtedness of any other person is not honoured when due and
called, provided that the aggregate principal amount of such
financial indebtedness referred to in (i) or (ii) exceeds 10% of
its Total Assets or
11.4. Bankruptcy
the Issuer shall institute proceedings under any applicable
bankruptcy, insolvency or other similar law now or hereafter in
effect to be placed into liquidation or winding up or shall
consent to the filing of a bankruptcy, insolvency or similar
proceeding against it or shall file a petition or answer or
consent seeking reorganisation under any such law or shall
consent to the filing of any such petition, or shall consent to
the appointment of a receiver, manager, liquidator or trustee
or assignee in bankruptcy or liquidation of the Issuer or in
respect of its property, or shall make an assignment for the
benefit of its creditors or shall otherwise be unable or admit its
inability to pay its debts generally as they become due or the
Issuer commences proceedings with a view to the general
adjustment of its indebtedness, which event in any such case is
(in the sole opinion of the Note Trustee), materially prejudicial
to the interests of the Noteholders; in which event the holders
of Notes may, by Extraordinary Resolution of such holders,
direct the Note Trustee to give written notice to the Issuer at
the Specified Office of the Fiscal Agent, effective upon the date
of receipt, declaring the Notes to be forthwith due and
payable whereupon the same shall become forthwith due and
payable at the Amount, together with accrued Interest (if any)
to the date of repayment, without presentment, demand,
protest or other notice of any kind.
11.5. Substantial Change in business
The Issuer makes or threatens to make any substantial change
in the principal nature of its business as presently conducted
which is (in the sole opinion of the Note Trustee) materially
prejudicial to the interests of the Noteholders

19 Imperial
12. Regulatory Consent

The Note Trustee and the Noteholders will not without the
prior written consent of the relevant authorities:
12.1. purport to retain or set off at any time any amount payable
in respect of the Notes against any amount otherwise payable by
any of them to the Issuer except to the extent that payment of
such amount in respect of the Notes would be permitted at such
time under the Conditions;
12.2. amend or waive or concur in amending or waiving the
terms of the Note Documents whereby the subordination of the
Notes or any part thereof might be terminated, impaired or
adversely affected; or
12.3. attempt to obtain repayment of the whole or any part of
the amounts payable in respect of the Notes otherwise than in
accordance with the terms of the Note Documents.
13. Trust
Any amounts paid by or for the account of the Issuer or received
or recovered by the Note Trustee or any Noteholder and any
distributions of any kind or character in respect of the Notes
received or recovered by the Note Trustee or any Noteholder
otherwise than in accordance with the provisions of the Note
Documents shall be held in trust by the Note Trustee, or any
Noteholder to return the same to the Issuer, or where applicable,
the liquidator or other similar such officer.
14. Agents and specified offices

The names of the initial Fiscal Agent and Registrar and their initial
Specified Offices are set out below.
Details of the Agents and specified offices
AGENT
SPECIFIED OFFICE
Fiscal Agent &

Registrar
Image Registrars Limited

P.O. Box 9287 - 00100
Nairobi, Kenya
Ropat Trust Company Limited
P.O. Box 1243 - 00100
Nairobi, Kenya
Note Trustee
The Issuer is entitled to amend or terminate the appointment of

any Agent and appoint another Agent provided that it will at all
times, while any Note is outstanding, maintain a Trustee, a Fiscal
Agent, and a Registrar having a Specified Office in Nairobi.
Any variation, termination or appointment shall only take effect
(other than in the case of insolvency, when it shall be of immediate effect) after not less than 30 nor more than 45 days prior
notice thereof shall have been given to the Noteholders in accordance with Condition 15 (Notices). A copy of the notice to
Noteholders shall be sent to the CMA.

In acting under the Agency Agreement and in connection with
the Notes, each of the Agents is acting solely as agent of the
Issuer and, does not assume any obligation toward or relationship of agency or trust for or with any Noteholder or the
owner of any interest in the Notes.
15. Notices
Notices to the Noteholders will be deemed to be validly given
if made by fax, electronic mail, delivered to them, or sent by
registered post to them, and:
15.1. In the case of notices that are posted to holders of
Notes, the notices will be valid if mailed to their registered
addresses appearing on the Register. Any such notice shall be
deemed to have been given on the seventh Business Day after
the day on which it was posted;
15.2. In the case of any communication made by fax, the
notice will be deemed to have been validly given when on the
date following transmission (provided that the sender
produces, if requested to do so, a fax transmission report
showing that the entire communication was received by the
intended recipient); or
15.3. In the case of delivery, the notice will be deemed to have
been validly given when such communication or document is
left with or delivered to the intended Noteholder at its
address as recorded on the Register,
15.4. In case of electronic transmission, the notice will be
deemed to have been validly given when such electronic
communication is sent to the intended Noteholder provided
that a communication or document which is received after
5:00 p.m. on a Business Day, or on a day which is not a full
Business Day, in the place of receipt shall be deemed to be
delivered on the next full Business Day in that place.
All notices regarding the Notes shall be published in a leading
English language daily newspaper expected to be of general
circulation in the Republic of Kenya. Any such notice will be
deemed to have been given on the date of the first publication
in the newspaper.
Notices to be given by any holder of the Notes shall be in
writing and given by lodging the same, with the Note Agents.
17. Governing law and jurisdiction

17.1. The Trust Deed and the Notes are governed by, and shall
be construed in accordance with, the laws of the Republic of
Kenya.
17.2. The Issuer agrees for the benefit of the Note Trustee and
the Noteholders that the courts of Kenya shall have exclusive
jurisdiction to hear and determine any suit, action or proceedings,
and to settle any disputes, which may arise out of or in connection with this Trust Deed or the Notes (respectively, Proceedings and Disputes).
17.3. Service of any summons other notice of legal process shall
be received by the Issuer at its Specified Office.
16. Meeting of noteholders, modification and

waiver
The Trust Deed contains provisions for convening meetings of
the Noteholders to consider any matter affecting their
interests, including the sanctioning by Extraordinary Resolution
of modification of the Notes or certain provision of the Trust
Deed.

20
8. Subscriptions for the Notes

and Selling Restrictions
The Notes will be sold through the Placing Agent upon the terms
and conditions set out in an Issue Agreement (the Issue Agreement) dated 12th August 2015.
1. Application Procedure
Application forms accompanied by copies of the Information
Memorandum may be obtained from the Arranger or the
appointed Placing Agent. Applications must be submitted directly
to the Placing Agent, so as to arrive no later than the time and
date specified in this Information Memorandum. Successful
applicants will be notified either by the Fiscal Agent on behalf of
Imperial Bank Limited, or by the Arranger on behalf of Imperial
Bank Limited of the amount of Notes allotted to them immediately after the Allotment date specified in this Information Memorandum (the Allotment Date).
2. Payment for the Notes

Payment for the Notes is to be made in full to the Fiscal Agent
immediately available funds by the date specified in this Information Memorandum.
3. Legal Agreements
On 12th August 2015, the Issuer entered into an agreement with
Ropat Trust to act as the Note Trustee in respect of the issue of
the Notes. On 12th August 2015, the Issuer entered into an
agreement with Image Registrars to act as its Fiscal Agent and
Registrar in respect of the issue of the Notes.
On 13th April 2015, the Issuer entered into an agreement (the
Issue Agreement) with Dyer and Blair Investment Bank Limited
as the placement agent (the Issue Agent) for the issue of the
Notes.
4. Selling Restrictions
a. Kenya
The approval of the Capital Markets Authority has been obtained
for the offer of the Notes to the public in the Republic of Kenya.
The Notes will be available to the general public in the Republic
of Kenya.
b. General
Except as stated above, no action has been or will be taken in any
jurisdiction by any of the Issuer, Placing Agent or Arrangers that
would permit a public offering of the Notes, or possession or
distribution of the Information Memorandum (in draft or final
form) or any other offering or publicity material relating to the
Notes, in any country or jurisdiction where action for that
purpose is required. The Issuer and the Placing Agent will comply
with all applicable laws and regulations in each jurisdiction in
which it acquires, offers or sells the Notes or has in its possession
or distributes the Information Memorandum (in draft or final
form) or any such other material, in all cases at its own expense.

21 Imperial
They will also ensure that no obligations are imposed on the Issuer
or the Placing Agent in any such jurisdiction as a result of any of the
foregoing actions. The Issuer, Arranger and the Placing Agent(s) will
have no responsibility for, and each Placing Agent or Issuer will
obtain, any consent, approval or permission required for it for, the
acquisition, offer or sale by it of the Notes under the laws and
regulations in force in any jurisdiction to which it is subject or in or
from which it makes any acquisition, offer or sale. No Placing Agent
or Issuer is authorised to make any representation or use any
information in connection with the issue, subscription and sale of
the Notes other than as contained in the Information Memorandum (in final form),or any amendment or supplements to it.
c. United States
The Notes have not been and will not be registered under the U.S.
Securities Act, 1993 as amended (the Securities Act) and may not
be offered or sold within the United States or to, or for the account
or benefit of, U.S. persons except in accordance with Regulation S
under the Securities Act (Regulation S) or pursuant to an exemption from the registration requirements of the Securities Act. Terms
used in this paragraph have the meanings given to them by Regulation S. The Issuer, each Arranger and the Placing Agent has represented and agreed that, except as permitted by the Placing Agreement, it has only offered and sold Notes, and will only offer and sell
Notes (i) as part of its distribution at any time and (ii) otherwise
until 40 days after the later of the commencement of the offering
and the closing date of the Issue (as defined in the Placing Agreement), only in accordance with Rule 903 of Regulation S. Accordingly, neither it, its affiliates, nor any persons acting on its or their
behalf have engaged or will engage in any directed selling efforts
with respect to the Notes, and it and they have complied and will
comply with the offering restrictions requirement of Regulation S.
Each of the Issuer, each Arranger and each Placing Agent agrees
that, at or prior to confirmation of sale of Notes, it will have sent to
each distributor, dealer or person receiving a selling concession, fee
or other remuneration that purchases Notes from it during the
restricted period a confirmation or notice to substantially the
following effect: The Notes covered hereby have not been
registered under the U.S. Securities Act of 1933, as amended (the
Securities Act) and may not be offered and sold within the
United States or to, or for the account or benefit of, U.S. persons
(i) as part of their distribution at any time or (ii) otherwise until 40
days after the later of the commencement of the offering and the
closing date of the Issue (as defined in the Placing Agreement),
except in either case in accordance with Regulation S under the
Securities Act. Terms used above have the meanings given to them
by Regulation S.
8. Subscriptions for the Notes

and Selling Restrictions
d. United Kingdom
The Issuer, each Arranger and each Placing Agent has represented and agreed and each further Placing Agent appointed
under the Issue will be required to represent and agree that:
i. it has not offered or sold and will not offer or sell any Notes, prior to
the expiry of six months from the Issue Date in respect of such Notes,
to persons in the United Kingdom except to persons whose ordinary
activities involve them in acquiring, holding, managing or disposing of
investments (as principal or agent) for purposes of their businesses or
otherwise in circumstances which have not resulted and will not result
in an offer to the public in the United Kingdom within the meaning of
Public Offers of Securities Regulations 1995; and
ii. it has complied and will comply with all applicable provisions of the
Financial Services and Markets Act 2000 (FSMA) with respect to
anything done by it in relation to the Notes in, from or otherwise
involving the United Kingdom; and it has only communicated or
caused to be communicated and will only communicate or cause to
be communicated any invitations or inducement to engage in investment activity (within the meaning of section 21 of the FSMA) in
connection with the issue or sale of any Notes in circumstances in
which section 21(1) of the FSMA does not apply to the Issuer.

22
9. Tax Considerations
The comments below are of a general nature based on taxation law
and practice in Kenya as at the date of this Information Memorandum and are subject to any changes thereafter. They only relate to
the anticipated tax consequences of an investment in the Notes
under Kenyan tax laws. The comments below do not relate to all
possible tax consequences of an investment in the Notes and so
should be treated with appropriate caution.
Prospective investors should consult their own professional advisers
concerning the possible tax consequences of purchasing, holding
and/or selling Notes and receiving payments of interest, principal
and/or other amounts under the Notes under the applicable laws of
their country of citizenship, residence or domicile.
Withholding Tax
Interest on the Notes (other than interest paid to the financial
institutions specified in the fourth schedule to the Income Tax
Act (chapter 470 of the Laws of Kenya) and certain other exempt
persons) is subject to withholding tax. Payment of interest on the
Notes will be made by the Fiscal Agent in Kenya following the
deduction (where applicable) of Kenyan withholding tax at the
rate of 15%. Interest on the Notes will be subject to Kenyan
Income Tax for a non-individual Noteholder resident in Kenya
under the Self-Assessment system, with a credit available for
withholding tax deducted at source. Non-residents may also be
entitled to a tax credit in their country of residence under the tax
treaties referred to below. Withholding tax will be the final tax
for an individual resident in Kenya.

23 Imperial
Capital Gains Tax

Tax on capital gains which had been previously suspended in Kenya,
has now been reinstated w.e.f. 1st January 2015. Capital Gains Tax
CGT will be charged at 5%, therefore, a Noteholder that does
not trade in marketable securities will recognise a chargeable gain
or an allowable loss under Kenyan taxation upon the sale exchange
or other disposition of the Notes other than redemption on maturity. CGT is a final tax and cannot be offset against other Income
Taxes. A Noteholder that trades in marketable securities will be
subject to Income Tax under the Self-Assessment system on any
chargeable gains upon a sale, exchange or other disposition of the
Notes other than redemption on maturity.
Stamp Duty
No stamp duty is payable in Kenya on the issue, transfer or
redemption of the Notes so long as the Notes are listed and transacted on the Nairobi Securities Exchange.
Tax Treaties
Kenya has entered into double taxation treaties with Canada,
Denmark, Germany, India, Norway Sweden, the United Kingdom,
Zambia, Mauritius, Iran and France. Treaties with Switzerland, Italy,
Seychelles, Qatar, South Korea, Nigeria, Kuwait, South Africa,
Burundi, Rwanda, Uganda and Tanzania have been signed but are
not yet in force.
Reporting Accountants
10. Economic
Report Overview
10.1. East African Economic Overview
East Africa Real GDP Growth in Percentage by country
According to the African Development Bank, East Africa is one of

the fastest growing economies in Africa, fuelled by improved
agricultural activity, industry and service. In addition, growth is
expected to accelerate in 2015 due to increased private investments especially in the construction sector and an expected surge
of activity in the ICT and Finance sectors.
Africa Real GDP Growth in Percentage by Region
Africa
Central Africa
East Africa
North Africa
Southern Africa
West Africa
2012
6.4
5.5
5.3
9.4
3.3
6.5
2013
3.9
2.8
5.3
1.9
3.8
5.7
2014 *
4.8
4.9
5.8
3.1
3.2
6.6
2015 (p)
5.7
5.7
6.2
5.5
4.1
6.2
Note: * provisional; (p) projections

Source: Economic Survey 2015, Kenya National Bureau of Statistics
The East African economy growth rate is also attributed to the

discovery and active exploration of Oil in Uganda and Kenya and
Gas in Tanzania which are seen to provide unique opportunities.
This is expected to propel Infrastructure growth and subsequent
economic growth provided that, there are sound policies and
effective follow through by the respective governments.
Kenya
Uganda
Tanzania
Rwanda
Burundi
2011
4.4
6.2
6.4
7.5
4.2
2012
4.6
2.8
6.9
8.0
4.0
2013
5.7
5.8
7.0
4.7
4.5
2014 * 2015 (p)

5.3
6.2
5.9
6.3
7.2
7.0
6.0
6.7
4.7
4.8
Note: * provisional; (p) projections

Source: Economic Survey 2015, Kenya National Bureau of Statistics
The East African Community is the regional inter-governmental

organisation established with the purpose of widening and deepening the economic integration for mutual benefit of all partner states
involved. The signing of the Monetary Union Protocol further drives
this objective of macroeconomic convergence as it provides the
road map to a single currency for the region. The IMF has been
providing technical assistance and policy advice in this area, particularly relating to cross-border banking supervision. An appropriate
framework will reduce systemic risks and foster confidence in banks
that operate in the region.
Despite the general political slack in implementing the Protocols as
ratified, the outlook for the EAC is vibrant as it continues to experience tremendous growth and improvements in the service, manufacturing and agricultural sectors.
10.2. Kenya Economic Overview

In September 2014, the Kenya economy was rebased as the year
was change from 2001 to 2009. The implication of this is that the
economy received a 25 percent boost which led to its classification
as a middle income country.
GDP Growth Old vs Revised (KShs Billion)

5,000.00
4,500.00
4000.00
3,500.00
3,000.00
2,500.00
2000.00
1500.00
1000.00
500.00
0.00
-
2006
2007
2008
2009
2010
2011
2012
2013
GDP (old) ksh. Bn
1,622,60
1,833.50
2,107.60
2,376.00
2,570.30
3,047.40
3,403.50
3,798.00
GDP (revised) ksh. Bn
1,862,00
2,151.30
2483.10
2,863.70
3,169.30
3726.10
4,254.80
4,757.50
Source: Kenya National Bureau of Statistics, Dyer & Blair analysis

24
10. Economic Overview

Kenya's economy is estimated to have expanded by 5.3 per cent
in 2014 compared to a growth of 5.7 per cent in the same period
of 20132 .The growth is mainly attributed to increased activities in
construction; finance and insurance; wholesale and retail trade;
information and communication; and agriculture and forestry. All
the sectors recorded positive growths except the tourism sector
which continues to be marred by insecurity, this has especially
impacted on the coastal area which has seen a drastic drop in
tourism activity.
Below is a Sectoral analysis of the main contributors to GDP
growth according to the KNBS 2015 Economic Survey Report.
10.2.2. Manufacturing
10.2.1. Agriculture and Forestry
On the other hand, the manufacturing industry experienced some

limitations in 2014 among them suppressed external demand of
industrial non-food and processed fruits and vegetable products.
Output of beverages, printing and production of recorded media
contracted partly on account of reduced domestic demand while
manufacture of sugar declined due a reduction in cane delivery.
Production of leather and related products declined partly due to
increased competition from imports.
The agriculture, forestry and fishing sector recorded a growth of

3.5 per cent in 2014 compared to 5.2 per cent recorded in 2013.
This is due to the impact of poor long rains which slowed the
activities of growing of crops; especially maize production which
decreased in 2014 to 39.0 million bags from 40.7 million bags
harvested in 2013; and animal production. However, production
of some food commodities like Irish potatoes and pulses
improved, as a result adverse effects of the declined maize
production have been cushioned. Other increases were notable
in key crops like coffee, tea, cut flowers and fruits while sugar cane
and pyrethrum production declined. The total marketed production increased slightly to KShs 336.5 billion in .2014 from KShs
334.8 billion in 2013.
During the review period, marketing of key cash crops was
negatively impacted on by suppressed external demand and a
glut in global supply of tea. Quantity of exported tea increased by
2.3 per cent but its price remained low due to a supply glut in the
International Markets.
This resulted in a decline in foreign earnings from exports of tea,
by 10.2 per cent in 2014.The value of Coffee on the other hand,
rose by 22.0 per cent despite a decline of 3.0 per cent in export
quantities. This is attributed to improved international price
resulting from to high quality beans and increased demand for
Kenyan coffee for blending other varieties. Despite uncertainty
over the future of Kenyas preferential trade with Europe earlier
in the year, quantities and value of horticultural exports recorded
significant growths of 10.2 and 8.7 per cent, respectively.
KNBS; Economic Survey 2015

25 Imperial
The Manufacturing Sector recorded a growth of 3.4 per cent in

2014 with the food and non-food subsectors growing by 4.0 per
cent and 3.1 per cent, respectively; compared to a growth of 5.6
percent in 2013. Some of the factors that contributed to the
growth of the industry include decrease in energy cost, restrained
inflation and resilient domestic demand, increased production of
cement, pharmaceutical products, fabricated metal products, and
manufacture of furniture. Processing of animal feed, tobacco, grain
mill and animal and vegetable fats and oil products registered significant growths during the review period.
10.2.3. Transport
The transport and storage sector recorded an improved growth of
5.0 per cent in 2014 compared to that of 1.2 per cent in 2013. This
accelerated growth was attributed to increased demand for transportation of cargo due to an increase in trade activities, as well as a
general increase in commuter services. Despite the overall good
performance of the sector, the air transport subsector was fraught
with setbacks resulting from the Ebola Epidemic and adverse travel
advisories by some major tourist source countries. The outbreak of
Ebola led to suspension of Kenya Airways flights to Sierra Leone,
Guinea and Liberia, which were the most affected.
There were efficiencies realised in the railway and ports subsectors.
The railway subsector recorded an improvement in freight services
due to enhanced capacity through additional wagons acquired. The
ports subsector recorded an increase of 11.5 percent of cargo
handled due to improvement of the facilities as well as efficiency of
the Port of Mombasa

10.2.4. Construction
The Building and Construction sector registered a growth of 13.1
per cent in 2014 compared to a revised growth of 5.8 per cent in
2013. This was mainly attributed to an increase in funds allocated
for construction of roads and railways coupled with rehabilitation
of existing road network. The index of reported private building
works completed in Nairobi City County rose from 321.3 in 2013
to 341.4 in 2014. However, the index of reported public building
works completed in the country declined from 103.7 in 2013 to
stand at 61.4 in 2014, partly as a result of a reduction in number
of completed housing units.
Cement consumption, a key indicator in the construction industry, grew by 21.8 per cent in 2014 to stand at 5,197 thousand
tonnes. Commercial bank credit extended to the sector went up
by 13.6 per cent from KShs 70.8 billion in 2013 to KShs 80.4
billion in 2014 due to increased financing of real estate developments.
10.2.5. Information and Communication

The sector remained robust in 2014 to grow at 13.4 per cent
compared to a growth of 12.3 per cent in 2013. The growth was
attributed to increased uptake of ICT services, notably usage of
data which continued to grow supported by lower prices of data
bundles and availability of affordable internet enabled mobile
phones and stability in the growth of voice services, the number
of internet users grew by 23.0 percent to 26.2 million from 21.3
million in 2013.
The mobile telephony market continued on a steady growth path
with its capacity expanding by 18.2 per cent while connections
increased by 7.4 per cent to stand at 33.6 million in 2014.
Subscription of mobile money transfer services stagnated at 26.0
million subscribers though total transfers registered a nominal
growth of 21.6 per cent during the year. In contrast, the fixed line
telephony capacity declined by 11.0 per cent in 2014 due to
decommissioning of a number of exchanges. The average price of
mobile-to-mobile calls reduced by around a fifth but that of
mobile-to-fixed local remained unchanged during the review
period. The average price of Short Messaging Service (SMS) also
decreased by KSh .0.50 to stand at KSh1.00 over the same period.
The internet segment also experienced a robust growth with the

total internet subscriptions growing by 24.8 per cent in 2014
compared to an expansion of 55.0 per cent in 2013. The implementation of the digital migration saw the entry of 36 digital TV
stations into the market while analogue signal stations remained 14
resulting in a quadrupling of the number of TV stations in the country. For the second year in a row, the number of daily and weekly
newspaper circulation declined. On the other hand, average
number of online visitors per day has been growing steadily in the
recent years.
10.2.6. Financial Intermediation

The sector recorded a growth of 8.3 per cent in 2014 compared to
8.1 per cent in 2013. The expansion of the financial services was
driven by increased uptake of loans and advances, increased
earnings from fees and commissions and government securities.
Interest rates eased downwards while interest spread rate
remained fairly high at over 10 per cent despite the CBR remaining
at 8.5 per cent throughout the year/
Containment of inflation within the CBK target was a milestone for
the sector. The Shilling gained substantially against the Japanese Yen
and the South African Rand but remained almost at the same level
against the Uganda and Tanzania Shillings. However, the domestic
currency depreciated by 7.5 per cent against the Sterling Pound and
2.1 per cent against both the US Dollar and the Euro. This was
despite the fall in oil prices, increased remittances from the
Diaspora and a successful floating of the Eurobond that resulted in
the injection of USD 2 billion to the economy. The weakening of
the Shilling was attributed to the general strengthening of the US
Dollar due to optimistic sentiments of the US economy; deterioration of tourism earnings arising from declining international visitors;
and a widening trade deficit. Despite the drops in prices of fuel,
electricity and some food commodities, inflation rose slightly but
remained within the central bank target.

26

A number of improvements and innovations were initiated during
the year under review. Full file credit information sharing was
introduced in February 2014 while the CBK introduced Kenya
Banks Reference Rate (KBRR) in July 2014 with the aim of
enhancing transparency in credit pricing within the banking industry. During the third quarter of 2014, commercial banks started
implementing the Annual Percentage Rate (APR) framework, a
credit pricing mechanism that enables consumers to compare
different bank loan costs.
10.2.7. Tourism
The tourism sector performance decreased in 2014 on account
of a number of factors. These include insecurity, negative travel
advisories and fear of continued spread of Ebola in West African
countries. As a result, the number of international visitor arrivals
contracted by 11.1 per cent from 1,519.6 thousand in 2013 to
1,350.4 thousand in 2014. This led to tourism earnings declining
by 7.3 per cent from KSh 94.0 billion to KSh 87.1 billion over the
same period.
10.2.8. Energy3
International crude oil prices plummeted by more than 40 per cent
to 60.65 US Dollars per barrel in December 2014. This translated
to reduced domestic petroleum pump prices.
Total quantity of petroleum products imported increased by 11.7
per cent to 4,464.5 thousand tonnes in 2014. As a result, import bill
of the petroleum products expanded by 5.6 per cent to KSh
333,145.8 million. Total domestic demand for petroleum products
increased by 5.3 per cent to 3,937.9 thousand tonnes in 2014.
Total installed capacity expanded by 4.7 per cent from 1,717.8 MW
in 2013 to 1,798.3 MW in 2014 mainly due to increased geothermal capacity. Total electricity generation expanded by 8.2 per cent
to 9,138.7 GWh in 2014. Hydro and geothermal power accounted
for the bulk of power with a total share of 71.0 per cent during the
period. Domestic demand for electricity registered a growth of 3.8
per cent to 7,768.6 GWh in 2014 from 6,928.1 Gwh in 2013.
The number of customers connected under the Rural Electrification
Programme expanded by 16.5 per cent to 528,552 as at July 2014.
Major projects in progress in 2014/15 include electrification of
5,082 primary schools to the national grid and 2,460 through solar
at a total cost of KSh15.0 billion.
Contribution to GDP (%) per sector
2010
100
2011
80
40
2012
2013
-40
20
0
2014
-40
Agriculture
Mining
Manufacturing
Electricity & water
Construction
Trade
Tourism
Transport & storage
ICT
Financial & insurance
Public administration
Professional Services
Real Estate
Education
Health
Other services
FISIM
-20
Source: KNBS
KNBS; Economic Survey 2015

27 Imperial

10.2.9. Key Economic Indicators
i. Inflation rate
The annual inflation rate in the first quarter of 2014 decreased from 7.21 percent in January to 6.27 percent in March. In the second quarter,
the rate increased to 7.39 percent amidst growing international oil prices. This increase soared in the third quarter to reach a peak of 8.36
percent in August 2014. However, the inflation rate has since been on the decline attributed to the ever changing international oil prices
which have reduced, recording the lowest prices since the year 2010. The inflation rate as at close of the year 2014 reduced to 6.02
percent. Further decreases were recorded in the first quarter of 2015, at 5.61 percent as at February 2015. The inflation rate has since
increased to reach a high of 7.06 percent in April 2015. This is attributable to observed cost increases mainly of house rents, kerosene,
charcoal and other utilities.
Inflation rate (%)
Source: CBK
ii. Interest Rates

During the first quarter of 2015, the average interest rate on 91-day treasury bills stood at 8.56 per cent, compared to an average of 9.13
per cent rate recorded in a similar period in 2014. The overdraft and maximum lending interest rates have been dropping steadily and are
at 15.68 percent and 15.46 percent, respectively. The fall of lending rates increased domestic credit growth and contributed to the overall
growth of the Finance sector. The interbank rate dropped to 6.85 percent in March 2015 from 7.12 percent in January of the same period,
while the average savings deposit rate dropped from 1.6 per cent to 1.5 per cent in the review period.
Interest rates on savings remained particularly stagnant in 2014, with a slight increase in August to 1.5% from 1.3% recorded in the previous
month of July. The rates have remained stagnant into 2015.The Central Bank maintained the interest rate at 8.5% for the 12 months of
2014, to encourage lower interest rates in the market seen as an impetus to economic growth.
Monthly Interest Rates
Source CBK
28

iii. Exchange Rates4
During the first quarter of 2015, the shilling had posted poor performance against hard currencies in nominal terms with the exchange.
The shilling has been depreciating sharply against major currencies, recording a low of 93.44 on the dollar in the month of April 2015, and
a varied performance on the Sterling Pound and Euro in the first quarter of 2015 through to the month of April. Notably, the shilling
performed fairly well with the exchange rate being fairly stable at 119.02 in July and 117.40 rate in August 2014 given the crisis at the Euro
zone that have seen the monetary authority signal adoption of quantitative easing to spur growth given the down side risks experienced
in the zone.
The depreciation of the shilling to the dollar is attributed to the lack of dollar revenue in the form of tourism, as the country has been
plagued by insecurity, this has adversely affected demand for the shilling.
For the East African financial market the shilling continued to post resilient performance against the Ugandan and the Tanzanian shilling.
For the Ugandan Shilling, the shilling exchange rate was at an average of 29.81 for both July and August while for the Tanzanian shilling, the
average rates for July and August were 18.97 and 18.99 respectively
Exchange rates
Source CBK
iv. Money Supply

Broad Money Supply (M3) has expanded in the period of 2014 largely due to an increase in the money in circulation as well as in the
number of deposits held in banks. This exerted inflationary pressure especially in the month of August 2014, which recorded the highest
increase for the year. However, the growing supply has generally been in tandem with the target inflation of 7.5% and the Central Bank
can maintain a low reference rate and focus on the expected economic growth trajectory.
Money Supply (Kshs million)
Source: KNBS, Dyer and Blair analysis

4
Kenya Bankers Association Quarter 3 Bulletin

29 Imperial

10.2.10. Nairobi Securities Exchange
The Nairobi Securities exchange posted an overall impressive performance in 2014, to close at an index high of 5,113 on the NSE 20 Share
index. The first half of the year recorded low turnovers and investor participation mainly due to the scaling back of foreign investor participation brought about by political and security concerns in the country. The NSE 20 share index has been gaining ground in the first quarter
of 2015 to record highs of 5,491 in the month of February 2015.
From the month of July, the NSE appeared more robust with increased local investor participation. The NSE underwent a historical
self-listing in the month of September. This positively buoyed the market performance as the NSE 20 Share index recorded an all-time
high of 5,256. This move increased investor confidence and the market performance for the third quarter was robust as the NSE 20 Share
index was maintained above 5,000 points till December 2014. The performance has remained robust in 2015 as the index has been consistently increasing
NSE 20 Share Index
Source: NSE
10.2.11. Bond Market Overview

The Bond market has experienced significant growth and activity in 2014. The Government debuted the first sovereign bond in Kenya as
part of its efforts to reduce its domestic borrowing. In the month of April the government reduced its domestic debt by 14.4 billion from
the previous month, in August by 15.35 billion, in September by 20.22 billion and further in October by 5.96 billion from the previous
months. The domestic debt has increased to a total of 1.37 billion due to increased issues of Treasury bills and bonds
Kenyas first Eurobond was expected to lower domestic rates so as to promote vibrancy in the credit market and spur growth/ investments
in economic projects commissioned by the government.
The yields for the first quarter closed at 11. 275 percent, for the 5 year bond, at 11.923 percent for the 10 year and at 12.37 percent for
the 15 year bond. In the second quarter of 2014, the yields increased to close at 12 percent for the 5 year, 12.79 percent for the 10 year,
13.02 percent for the 15 year and 13.42 for the 26 year bond. The implications of the Eurobond issue manifested in the third quarter as
the rates declined to close at 11.55 percent for the 5 year, 11.99 for the 10 year and 12.36 for the 15 year. For the first quarter of 2015,
the rates increased to close at 12.02 percent for the 5 year, 12.6 percent for the 10 year and 13.04 percent for the 15 year as at end of
March 2015.
In the month of May 2015, the 5 year reduced to 11.90 percent, while the 10 year and 15 year increased to 12.79 percent and 13.07
percent respectively.

30

NSE YIELDS
Source: NSE
10.3. Uganda Economic Overview

In Uganda, the revised real GDP grew by 4.5 per cent in 2013/14 compared to a revised 3.3 per cent in 2012/13, as feeble imports and
stronger investment offset sluggish exports. The outlook for 2014/15 is for acceleration of growth, projected at about 6 per cent,
supported by public investment in infrastructure, private domestic consumption and investment demand (recovery in private sector credit
growth), increased Foreign Direct Investment (FDI); and rebound in agricultural production.5 In addition, significant progress has been
made in the oil drilling as a commercialisation plan is being actualised for the development of an export pipeline and a modern refinery.
i. Inflation and interest rates
The annual inflation rate for the fiscal year ended June 2014 was 5.4 percent, an increase compared to previous period close at 3.4 percent.
This was due to prolonged dry spells in parts of the country which constrained supply. It however remained within the East African
Monetary Union convergence criteria benchmark of 8 percent. In response to easing inflation pressures, the central bank rate (CBR) was
lowered to 11 percent in June 2014 to support private sector investment. Going forward, the inflation rate is forecast to rise albeit slowly
due to favourable weather conditions.6 Overall the T-bill, interbank and deposit rates have mirrored the CBR rate. However, the lending
rates have responded more slowly averaging 21.5 per cent since June 2014. This is because of high overhead costs and provisioning of the
Non-Performing Assets. Yields on government securities have remained on an upward trend since November 2014. This this is attributed
to the fiscal deficits.
ii. Foreign exchange market
The foreign exchange market remained stable throughout the fiscal period to June 2014. The Ugandan Shilling averaged USh.2580.9 per
US$ in June 2014 as compared to USh.2593.1 per US$ in June 2013, which presents an exchange rate appreciation of 0.5 percent on an
annual basis. This made Ugandas exports more expensive in the regional markets. However, the shilling experienced some depreciation
pressures in the last two quarters following a drop in remittances, a pickup in import demand and continued reports of donor aid cuts.
iii. Money Supply
Money Supply and Private Sector Credit recorded substantial growth. Broad money expanded by 25% from UShs 12 Trillion in June 2013
to UShs 15 trillion in November 2014 even as the headline inflation decreased. Private sector credit grew by 22% from UShs 7 trillion in
June 2013 to UShs 9 trillion in November 2014, signalling growth in investment in the private sector, amidst rising lending rates.
5
6
Bank of Uganda, State of the Economy Report

Bank of Uganda, Financial Stability Report

31 Imperial
11. Industry Overview

11.1. Overview of the Banking Sector Performance
11.1.1. Kenya Banking Sector Performance
The Kenyan banking sector comprises 43 commercial banks, 1 mortgage finance company, 9 microfinance banks, 8 representative offices
of foreign banks, 87 foreign exchange bureaus, 13 money remittance providers and 2 credit reference bureaus as at December 31, 2014.7
The banking sector recorded improved performance during the year under review with total assets at KShs 3.26 trillion in December 2014,
an increase from KShs 2.73 trillion registered in December 2013. Gross Loans and advances stood at KShs 1.97 trillion, while the deposit
base was KShs 2.33 trillion in December 2014, compared to KShs 1.61 trillion, and KShs 1.98 trillion as at December 2013. Total shareholders funds grew by 22.6% from KShs 431.5 billion to KShs 529.1 billion in December 2014. The quality of assets, measured as a proportion
of net non-performing loans to gross loans declined from 2.2 percent in December 2013 to 2.6 percent in December 2014.
On profitability, the banking sector registered a growth of 13.3 percent in pre-tax profits, from KShs 124.3 billion in December 2013 to
KShs 140.9 billion as at end of December 2014. The annualised return on assets declined to 3.4 percent from 3.6 percent over the same
period. Similarly, return on equity decreased to 26.6 percent from 28.8 percent over the same period. Total income increased by 15.8
percent from KShs 358.3 billion in December 2013 to KShs 414.8 billion in December 2014, while total expenses increased by 17.1
percent from KShs 233.2 billion in December 2013 to KShs 274.0 billion in December 2014. Interest on loans and advances, fees and
commissions and government securities were the major sources of income accounting for 59.2 percent, 18.8 percent and 15.1 percent of
total income respectively. Meanwhile, interest on deposits, staff costs and other expenses were the key components of expenses, accounting for 32.7 percent, 27.7 percent and 24.6 percent, respectively.
Structure of the Balance Sheet
i) Assets
The banking sectors aggregate balance sheet increased by 19.4 percent to KShs 3.26 trillion in December 2014, an increase from KShs
2.73 trillion registered in December 2013. The major components of the balance sheet on the asset side were loans and advances, government securities and placements, which accounted for 58.3 percent, 20.4 percent and 5.3 percent of total assets, respectively.
Imperial has a total asset base of KShs 64.6 billion as at 31st December 2014. It is classified under the Medium Tier peer group (comprising
of banks with market share of 1%-5%) and is ranked the 18th bank in Kenya, by net assets.8
Select Medium Peer group by Net Asset (Kshs. MIllion)
Source: CBK-Bank Supervision Report - 2013
7
8
Monthly Economic Review-December 2014; CBK

Bank Supervision Report 2013; CBK
32

ii) Net Loans and Advances
The banking sector gross loans and advances grew from KShs 1,605.2 billion in December 2013 to KShs 1,972.1 billion in December 2014,
which translated to a growth of 22.9 percent. The growth was attributed to increase in lending to personal/households, trade, manufacturing, transport and communication and real estate sectors. Loans and advances net of provisions stood at KShs 1,950.8 billion in December
2014, up from KShs 1,589.0 billion registered in a similar period in 2013.
iii) Deposit Liabilities
Deposits from customers which form the main source of funding for the banking sector, accounted for 71.5 percent of total funding
liabilities. The deposit base grew by 17.7 percent from KShs 1,980.2 billion in December 2013 to KShs 2,331.6 billion in December 2014
mainly supported by aggressive mobilization of deposits by banks, remittances and receipts from exports.
Imperial Bank registered KShs 34 billion in December 2013, which has since increased to KShs 54 billion by end of December 2014.
Select Medium Peer group by Total Deposits (Kshs. MIllion)
iv) Capital and Reserves

The banking sector registered enhanced capital levels in December 2014 with total shareholders funds growing by 22.6 percent from KShs
431.5 billion in December 2013 to KShs 529.1 billion in December 2014. Core capital and total capital increased from KShs 341.9 billion
and KShs 407.5 billion to KShs 422.1 billion and KShs 508.4 billion, respectively over the same period. However, the ratios of core and total
capital to total risk-weighted assets declined from 19.5 percent and 23.2 percent in December 2013 to 15.9 percent and 19.2 percent,
respectively. The decline in capital adequacy ratios was as a result of increase in total risk weighted assets occasioned by the capital charge
for market and operational risks that took effect from January 2014.
Imperial Banks capitalization with a capital base of KShs 5.97 billion ranks after Bank of Africa, Prime Bank and Family Bank in the Medium
Peer Group of the Banking Sector recorded in December 2013. The capital base has since increased to KShs 7.33 billion as at 31st December 2014.
Select Medium Peer group by Total Capital (Kshs. MIllion)

33 Imperial

v) Asset Quality
The stock of gross non-performing loans (NPLs) increased by
32.9 percent from KShs 80.6 billion in December 2013 to KShs
107.1 billion in December 2014. Similarly, the ratio of gross NPLs
to gross loans grew from 5.0 percent in December 2013 to 5.4
percent in December 2014. On the other hand, the coverage
ratio which is measured as a percentage of specific provisions to
total NPLs declined from 44.4 percent to 41.1 percent in December 2014.However, banks have adopted enhanced appraisal
standards to mitigate credit risk.
vi) Profitability
On profitability, the banking sector registered a growth of 13.3
percent in pre-tax profits, from KShs 124.3 billion in December
2013 to KShs 140.9 billion as at end of December 2014. The
annualised return on assets declined to 3.4 percent from 3.6
percent over the same period. Similarly, return on equity
decreased to 26.6 percent from 28.8 percent over the same
period. Total income increased by 15.8 percent from KShs 358.3
billion in December 2013 to KShs 414.8 billion in December
2014, while total expenses increased by 17.1 percent from KShs
233.2 billion in December 2013 to KShs 274.0 billion in December 2014. Interest on loans and advances, fees and commissions
and government securities were the major sources of income
accounting for 59.2 percent, 18.8 percent and 15.1 percent of
total income respectively. Meanwhile, interest on deposits, staff
costs and other expenses were the key components of expenses,
accounting for 32.7 percent, 27.7 percent and 24.6 percent,
respectively.
vii) Liquidity
The average liquid assets amounted to KShs 854.4 in December
2014, while total short-term liabilities stood at KShs 2,267.9
billion, resulting to an average liquidity ratio of 37.7 percent,
against 38.6 percent registered in December 2013 and well
above the statutory 20 percent.
11.1.2. Uganda Banking Sector Performance9

The growth of the Ugandan banking sector, comprising 26
commercial banks, increased in the year to June 2014. Total bank
assets grew from USh.15.7 trillion in June 2013 to USh.18.6 trillion
at the end of June 2014, an annual asset growth rate of 18.8
percent, more than twice the rate of growth experienced in the
previous year. The increase in bank assets was mainly driven by
banks investing more in government securities, given that loan
demand was subdued. Holdings of government securities grew by
29.6 percent from USh.3.1 trillion in June 2013 to USh.4 trillion at
the end of June 2014.
Total loans and advances increased by 14.4 percent to reach
USh.8.8 trillion at the end of June 2014.
As a share of total assets, risk-weighted assets reduced from 66.1

percent to 64.7 percent between June 2013 and June 2014.
i) Profitability
Profitability of Ugandas banking sector reduced in 2013/14
compared to the previous year. Year-on-year net after-tax earnings
stood at USh.358.8 billion, down from USh.498.1 billion in June
2013. The drop in earnings was mainly due to an increase in provisions for bad debts by 72.5 percent from USh.192.6 billion to
USh.332.1 billion between June 2013 and June 2014. An increase in
banks operating costs by 15.2 percent or USh.167.2 billion during
that period, largely in form of salaries, wages and staff costs, also
contributed to the reduction in banks profits. As a share of total
income, income from total loans and advances accounted for 53.9
percent while earnings on government securities accounted for
14.3 percent of total income in the year to June 2014. Thus, key
ratios of bank profitability declined in the year to June 2014. The
average return on banks' total assets and on total equity dropped
from 3.3 percent and 20.3 percent respectively at the end of June
2013 to 2.1 percent and 12.8 percent respectively in the year to
June 2014. The cost-to-income ratio rose from 72.4 percent in June
2013 to 75.8 percent in June 2014.
ii) Banks Lending Activity
Bank lending showed strong recovery over the year to June 2014.
Overall credit extended by banks grew by 14.4 percent from
USh.7.7 trillion in June 2013 to USh.8.8 trillion in June 2014. Shilling
loans grew at a rate of 9.4 percent in June 2014, up from a decline
of 1.1 percent in the previous year. Foreign currency loans grew by
22.3 percent between June 2013 and June 2014, from USh.3.1
trillion to USh.3.7 trillion, an improvement from the 20.1 percent
growth rate experienced in the previous year.
The strong growth in bank lending was due to several factors. First,
there was continued reduction in the cost of borrowing as bank
lending rates reduced during the year. The interest rates on foreign
currency loans remained low and relatively stable at 10.1 percent in
June 2013 and 9.7 percent in June 2014, and this boosted the
growth in foreign currency loans. In the year to June 2014, banks
maintained a sectoral lending pattern similar to that witnessed in
the same period in 2013. The building and construction sector and
trade and commerce sector continued to account for the largest
share of total loans as in the previous year with 23.2 percent and
20.8 percent respectively at the end of June 2014.
Notably however, the fastest increase in credit during the period
under review was to the household sector. Loans to this sector
grew at a rate of 44.3 percent in 2013/14 to reach USh.1.5 trillion,
improving from a decline of 5.0 percent in the previous year; the
sectors share of total lending rose to 17.4 percent at the end of
June 2014 compared to 13.8 percent in June 2013. A significant
share of these loans is unsecured salary loans.
Bank of Uganda Financial Stability Report, June 2014

34

ii) Asset Quality
Banks aggregate NPL ratio (non-performing loans to total gross
loans) increased from 4.0 percent to 5.8 percent between June
2013 and June 2014. In nominal terms, NPLs rose from
USh.304.9 billion in June 2013 to USh.509.2 billion at the end
June 2014.
The NPL ratio reached a peak of 6.2 percent as at March 2014
but then declined to 5.8 percent in the quarter ending June 2014.
However, it should be noted that loss loans grew from USh.114.6
billion to USh.243.1 billion between June 2013 and June 2014.
Analysis of sectors which registered a decline in asset quality
indicates that the most notable increase in bad loans was in the
building and construction sector. The sectors NPLs grew by
USh.48.2 billion to reach USh.116 billion at the end of June 2014,
thereby accounting for 22.8 percent of the total NPLs in the
industry. As a share of total NPLs, the trade and commerce
sector continued to hold the largest share with 24.7 percent at
the end of June 2014, but this was lower than the 27.0 percent it
accounted for in the previous year.
iv) Deposits and Liabilities

Deposits remain the main source of funding, comprising 79.0
percent of total liabilities in the year to June 2014. Deposits grew by
19.5 percent in the year to June 2014, up from 6.7 percent in the
year to June 2013. Foreign currency deposits increased by 28.0
percent while shilling deposits grew by 15.2 percent in the year to
June 2014. The growth of deposits was spread across demand and
time deposits. Demand deposits grew by 21.1 percent to reach
USh.6.5 trillion while time deposits grew by 16.5 percent to USh.3.8
trillion.
The cost of deposits reduced in the year to June 2014. Time
deposit rates (7-12 months) dropped from 11.6 percent at June
2013 to 9.2 percent as at June 2014 while saving deposit rates
reduced from 3.1 percent to 2.3 percent over the same period.
v) Liquidity
The liquidity risk in the Ugandan banking system is modest. The
ratio of liquid assets to total deposits increased from 41.1 percent
in June 2013 to 46.5 percent in June 2014, well above the regulatory minimum of 20 percent. The improvement in liquidity indicators was driven by an increase in banks holdings of government
securities of 30.0 percent between June 2013 and June 2014,
compared to an increase of 20.8 percent in the previous year.
11.2. Banking Sector Developments and Outlook

11.2.1. Sector Outlook
Kenyas banking sector is expected to sustain its growth momentum on the backdrop of a stable macro-economic environment,
and domestic and regional expansion by banks
Kenya
Banking Sector Developments
Outlook
Credit Reference Bureaus: The number of reports

requested by institutions, customers and banks
has increased as the industry embraces credit
information sharing in processing credit facilities.
Agency Banking: As at 30th September 2014,
there were 16 commercial banks that had
contracted 30,449 active agents facilitating over
120.6 million transactions valued at KShs. 653.7
billion
The sectors growth will mainly be supported by

the branch expansion, regional integration
initiatives, advances in information and communications technology and the adoption of the
devolved governance system in Kenya.
Microfinance Banks: As at 30th September 2014,

there were nine (9) Microfinance Banks (MFBs) in
operation which had granted loans and advances
worth KShs. 37.6 billion. The deposit base stood
at KShs. 33.2 billion. Kenya Banks Reference Rate
(KBRR): The introduction of a transparent credit
framework was enforced through the KBRR. In
July this rate was set at 9.13 percent and banks
were required to use this as their base rate for
their lending rates.
35 Imperial

Banking Sector Developments
Uganda
The outlook for Ugandas financial stability is

shaped by two factors: the risks faced by the
banking system and, the systems resilience in
the face of those risks. Ugandas financial system
remains sound, and risks to financial stability,
from both international and domestic sources,
have eased since the last financial stability
report.10
However, the banking sector continues to face
several challenges, relating to deterioration in
loan quality and rising loan-to value (LTV)
ratios.Bank of Uganda has taken several steps to
address these concerns.
Outlook
The mitigating measures by BOU are in
cognizance of the importance to maintain
financial stability for the banking sector. It is
important that the banking systems resilience
does not deteriorate in response to cyclical
economic changes, growth in asset prices and
global financial conditions.
In the year to June 2014, overall systemic risks
to financial stability reduced. Indicators show
that there has been a rebound in asset and
deposit growth. The banking sector remains
well capitalised and with adequate liquidity
buffers.
First, regarding rising LTV ratios, BOU has

started an exercise to collect data on and monitor loan-to-value ratios for property loans.
Starting September 2014, all banks will be
required to compile and send data to BOU on
LTV ratios for residential, commercial and land
mortgages. The BOU will also visit and benchmark practices at other central banks that are
collecting LTV data. It is the intention of the
BOU to have the LTV ratio developed as a
monitoring and macro prudential policy tool by
June 2015.
Secondly, BOU implemented micro prudential
measures to address weaknesses in several
banks. BOU engaged small and new banks, as
well as a number of systemically important
banks, to enhance their loan quality and liquidity. In addition, Global Trust Bank, which had
incurred significant losses was closed and
wound up.
Thirdly, as mentioned in the Report for June
2013, BOU had brought forward the implementation of Basel III capital measures to
January 2014 in order to strengthen bank
resilience. The amendments to the revised
Financial Institutions Act (2004) which include
the Basel III capital measures have been submitted to Parliament.
10
Bank of Uganda Financial Stability Report, June 2014

36
12. Profile of the Issuer

12.1. Historical background
Imperial Bank Limited (the Bank) is a public company incorporated in the Republic of Kenya, under Registration Number C10/2015 to
provide banking, financial, and related services. The Bank was first established as a private finance and securities company in October 1992
under the name Imperial Finance and Securities Company Limited, and later changed its name to Imperial Bank Limited in 1995. Thereafter,
the Bank converted into a fully-fledged commercial bank in January 1996.
The Bank later established a subsidiary in Uganda, Imperial Bank (Uganda) Limited, which was incorporated in 2010 under Registration
Number 11839 to provide the same services. The Bank operates twenty six branches in Kenya including a card division and five branches
in Uganda. The Bank converted to a public company in July 2015.
The Bank is a wholly owned subsidiary of Imperial Securities Limited.
12.2. Key Milestones

Banks key milestones
YEAR
2014
2013
2010
1996
1995
1992
MILESTONES
Launch of TSYS prime solution, a state of the art card processing platform
Launch of co-branded Arsenal debit card in Kenya and Uganda
Established Imperial Bank (Uganda ) Limited, as a subsidiary of the Bank
Converts to a fully-fledged commercial bank
Change of name to Imperial Bank Limited
Incorporated in Kenya as a Finance and Securities Company
12.3. The Bank

12.3.1. Mission Statement
To be a customer focused institution that offers innovative service and solutions to our customers, utilizing secure, cutting edge delivery
channels and well trained human resource.
12.3.2. Core Values
Integrity, Strength and Stability
To be responsible to stakeholders through promoting excellence in financial reporting, implementing sound risk management systems and
the highest ideals in corporate governance and social responsibility.
Community
Committed to achieving commercial success whilst honouring ethical values, complying with legal requirements and respecting the people,
communities and the environment. Devoted to promoting education, improving livelihoods of disadvantaged children and creating
sustainable relationships with the communities where we have presence.
Progressiveness
To grow our business and deliver a solid financial performance while offering innovative products and premium service to our customers.
Strive to offer the latest technology based solutions to our customers.
Commitment to our people
Committed to realizing the full potential of our staff by putting in place robust procedures, providing a friendly working environment, having
an equitable reward system, engaging in open and flexible communications and investing in staff development through training. Imperial
Bank is an equal opportunity employer
12.4. Awards & recognition

Imperial Bank has received the following awards and recognitions:
YEAR OF AWARD
2014
2014
2014
2013
2013
2012
2012
2011
TITLE OF THE AWARD

CITI Bank recognitionAward
MSK Awards
MSK Awards
The Banking Awards
The Banking Awards
The Banking Awards
RSM Ashvir-Appreciation
The Banking Awards

37 Imperial
AWARD
Outstanding Achievement in Straight Through Processing
Best sports Marketing Campaign
Best Loyalty program Marketing
Certificate of Excellence-Best Bank in Kenya Tier III
Best Bank in Kenya Tier III
Best bank in Kenya Tier III
For Support to the Growth of RSM Ashvir-September 2011
Best Bank in Kenya Tier III
POSITION/RANKING
Winner
Winner
3rd Position
3rd Position
2nd Position
2nd Position

YEAR OF AWARD TITLE OF THE AWARD
MDGs Trust Fund Achieve2011
ment Award
Royal Nairobi Golf Club Lady
2011
Captains prize
MTN Business Award
2011
2011
2010
Newgen Eminent Customer

Award
The Banking Awards
2001
1999
1998
The Banking Awards

The Banking Awards
The Banking Awards
The Banking awards
FIRE Awards
The Banking Awards
FIRE Awards
FIRE Awards
FIRE Awards
FIRE Awards
UNICEF Kenya Appreciation
Award
FIRE Award
ICPAK Award
ICPAK Award
1997
ICPAK Award
2009
2009
2009
2008
2008
2007
2006
2004
2004
2003
2002
AWARD
For Contributing towards reducing child Mortality
POSITION/RANKING
Appreciation of support for Ear Walk to help bring back

the Gift of Hearing
For Best automation Payment systems
Certificate of Excellence-Special Award for Product
innovation
Certificate of Excellence-Best Bank in Kenya Tier III
2nd position
Certificate of Excellence
Winner
Best Bank in SME Banking
1st Position
Certificate of Excellence-Best Bank in Customer satisfaction 2nd Runners Up
Banking Category
1st Runners Up
Best bank in Category B
3rd Position
Banking Category
1st Position Overall
Banking Category
Overall Winner
Banking Category
Winner
Banking Category
Winner
For Appreciation of outstanding partnership in the Change
for children campaign 15th-16th December 2001
Banking Category
1st Position Overall
Best Presented Accounts of the Year-Private companies
3rd Position
Best Presented Accounts-Non quoted Companies
2nd Runner Up
Categories
Best presented Accounts of the Year- Private companies
2nd Position
12.5. Country and Branch Network

The Bank has only one subsidiary, Imperial Bank (Uganda) Limited as stated below
Details on Imperial Bank (Uganda) Limited
COMPANY NAME
FUNCTION
COUNTRY OF INCORPORATION
SHAREHOLDING
Commercial Bank
Uganda
58.6%
The Bank has been in existence for over 20 years and currently has 26 branches in Kenya and 5 branches in Uganda with plans to continue
expanding the branch network across major towns and cities in the East African region. Below is a map showing the branch
network in Kenya and Uganda.
Imperial Banks footprint
KEY
Branch
Kampala
Details of all the branches are provided as

Appendix II of this document.
Eldoret
Nakuru
Thika
Nairobi
Malindi
Watamu
Kilifi
Mombasa
Diani

38

12.6. Products and Services
Imperial Securities Shareholding Structure
The Bank has a diverse and extensive range of products and

services that are customised to meet specific personal and
business needs of its range of customers.
These products and services include:
Product and service offerings
Corporate Banking Products
Corporate Relationship Banking
Cash Management
Lending & trade Finance Services
Retail Banking Products

Personal savings Account
Marble Junior Savings Account
Debit and Credit Cards
Treasury
Foreign Exchange Management
Correspondent Banking
Worldwide
The Bank is looking to increase its range of products to include

Islamic Banking, Global Money Transfer among others.
12.7. Share capital and shareholding

As at 31st December 2014, Imperial Banks authorised share
capital is KShs 1,500,000,000 divided into 1,500,000 ordinary
shares of KShs 1,000 each. The issued share capital is KShs
1,248,407,000 divided into 1,248,407 ordinary shares of KShs
1,000 each. The Banks shareholders as at the date of this
Information Memorandum are listed in the table below.
Imperial Bank Shareholding Structure
Shareholders Name
Abdumal Investments Limited
Imperial Securities Limited
Number of
Shares
1
1,248,399
%
Shareholding
0
100%
East African Motor Industries
Name of Shareholder
1
1
0
0
Rex Motors Limited

Imaran Ltd
Kenblest Limited
1
1
1
0
0
Momentum Holdings Ltd

Reynolds & Company Limited
Total Issued Shares
1
1
0
0
100%
1,248,407
Shares Held
%
Shareholding
Abdumal Investments Limited

East African Motor Industries
1,747,760
14
(Sales &Services) Limited

Janco Investments Ltd
Rex Motors Limited
1,373,240
1,685,340
1,560,500
11
13.5
12.5
Imaran Ltd
Kenblest Limited
Momentum Holdings Ltd
1,747,760
1,560,500
1,560,500
14
12.5
12.5
Reynolds & Company Limited

Total paid up capital
1,248,400
12,484,000
10
100
12.8. Board of Directors

The Banks board consists of a Chairman, 1 executive director, 5
non-executive directors and 3 non-executive independent directors
as detailed below:
Directors of Imperial Bank Limited
Directors Name
Position
Mr. Alnashir Popat

Chairman
Mr. Anwar Hajee

Mr. Jinit Shah
Non-Executive
Non-Executive
Non-Executive
Mr. Vishnu Dhutia
Non-Executive
Non-Executive
Non-Executive Independent
Mr. Hanif Mohamed Amirali Somji

Mr. Omurembe Iyadi
(Sales & Services) Limited

Janco Investments Ltd

39 Imperial
Please see below the table on the shareholding in Imperial Securities Limited, the holding company of Imperial Bank Limited.
Profiles of the directors are provided in section 13.1 of this Information

Memorandum
None of the Directors of the Group have in the last two years
been subject to bankruptcy proceedings nor have they been barred
by any court of competent jurisdiction from being a director or
acting as an investment adviser or as a director or employee of a
stockbroker, dealer, or any other financial service institution or from
engaging in any type of business practice or activity.

12.9. Historical Financial Performance
to 2014.
1H2015*
KShs 000
INCOME STATEMENT
Net Interest Income
Non-funded Income
Total Income
Other Operating Expenses

Impairment losses on loans and
advances
Non-funded Income to Total

Income
Earnings Per Share (Basic & Diluted in KShs)
BALANCE SHEET
Loan and Advances ( Gross)
Provision for loans and advances
leases
Loan and Advances ( Net)
Cash and short-term funds
Government Securities
Net Property and Equipment
Other Assets
2014
KShs 000
2013
KShs 000
2012
KShs 000
2011
KShs 000
2010
KShs 000
2,666,971
753,942
4,688,359
1,323,557
4,469,209
1,166,795
3,064,813
1,145,569
2,621,867
890,669
1,865,425
860,964
3,420,913
6,011,916
5,636,004
4,210,382
3,512,536
2,726,389
1,711,352
277,528
3,159,892
242,191
2,970,301
263,863
2,219,822
156,636
1,914,781
103,013
1,367,668
126,303
1,432,033
2,609,833
2,401,840
1,833,924
1,494,743
1,232,418
1,002,423
2,017,462
1,790,458
1,342,354
1,112,842
885,246
30.03%
15.81%
29.27%
14.84%
27.19%
13.21%
22.78%
14.23%
28.22%
16.81%
33.77%
23.59%
573
1,616
1,434
1,075
891
786
43,504,549
(1,424,113)
(579,952)
37,892,088
(1,240,077)
(580,800)
31,428,279
(1,067,182)
(505,873)
22,646,198
(824,695)
(529,142)
16,849,490
(678,252)
(511,919)
12,173,088
(577,177)
(443,083)
41,500,484
8,707,562
17,086,785
962,095
2,076,767
36,071,211
10,084,653
16,277,859
940,642
1,202,299
29,855,224
6,434,208
11,306,654
864,959
845,980
21,292,361
6,674,139
8,576,465
663,071
842,573
15,659,319
3,996,277
6,438,084
536,908
647,596
11,152,828
2,315,253
5,491,498
334,246
348,374
Total Assets
70,333,693
64,576,664
49,307,025
38,048,610
27,278,184
19,642,199
Customer and Banking institutions

deposits
Other Liabilities
59,895,813
56,137,196
42,263,579
32,752,833
22,963,403
15,839,364
1,535,617
632,492
1,026,891
530,717
478,282
517,908
Total Liabilities
61,431,430
56,769,688
43,290,470
33,283,550
23,441,685
16,357,272
8,902,263
8,393,807
7,806,976
7,322,216
6,016,555
5,589,521
4,765,060
4,424,865
3,836,499
3,618,805
3,284,927
3,024,213
Net Assets
Shareholder Funds attributable to
Owners
Minority Interest
Total Shareholders Funds
Return on Equity
Return on Assets
508,456
484,760
427,034
340,195
217,694
260,714
8,902,263
7,806,976
6,016,555
4,765,060
3,836,499
3,284,927
**11%
**2%
28%
4%
32%
4%
31%
4%
32%
5%
29%
5%
** The Return on Equity and Return on Assets are for 1H2015.

40

12.10. Income and Profitability
a. Total Operating Income
Total Operating Income has grown over the five years at compounded annual growth rate (CAGR) of 22% to stand at KShs
6.01 billion as at December 2014, while Total Assets grew by
CAGR 35% over the same period.
This was achieved on the back of growth in deposits which grew
by CAGR 37% and deployment initiatives with branch network increasing to 26 in Kenya and 5 in Uganda. In the first half
of 2015, the bank achieved a net interest income of KShs. 2.67
billion.
years, registering a CAGR of 21% to stand at KShs 2.61 billion as

ing a CAGR of 23% over the same period. The net profit for the bank
in the first half of 2015 was KShs. 1 billion.
-
Income and Protability for years 2010 - 1H2015 in KShs. Billion

5,000,000
4.47
4.69
4,500,000
4,000,000
3,500,000
3.07
3,000,000
2.62
2.67
2.4
2.61
2,500,000
2,000,000
1.87
1.83
1.79
1.49
1.43
1.25
1,500,000
0.89
1,000,000
1.11
2.02
1.34
1
500,000
0
Prot Before Tax
Net Interest Income

2010
2011
2012
2013
2014
Net Prot for the Year

1H2015
Source: Imperial Banks Annual Financial Reports for 2010-2014 and unaudited 1H2015.
12.11. Balance sheet position

a. Total Assets,Loans and Advances
The Banks total assets grew by 35% CAGR over the five years
to stand at KShs 64.6 billion as at December 2014. This was
achieved largely due to a 21% growth in loans and advances
to KShs 36.07 billion as at December 2014, compared to KShs
29.86 billion achieved in 2013, while government securities increased by 44% to KShs 16.28 billion in 2014. In the first half of
2015, Banks assets stood at KShs. 70.33 with the net loans.
41

growing by 15% from December 2014 to stand at KShs. 41.5

billion.

Net Loans and advances, and Total Assets
Net Loans and Advances and Total Assets for years 2010 - 1H2015 in KShs Billion
80,000,000
70.33
64.58
70,000,000
60,000,000
49.31
50,000,000
41.5
29.86
30,000,000
20,000,000
38.05
36.07
40,000,000
27.28
21.29
19.64
15.66
11.15
10,000,000
Loans and Advances (Net)
2010
2011
Total Assets
2012
2013
2014
1H2015
Source: Imperial Banks Annual Financial Reports for 2010-2014 and unaudited 1H2015
b. Deposits and Totalliabilities

Deposits grew by CAGR of 37% over 2014 to KShs 56.14 billion while total liabilities rose by CAGR of 28.25% to KShs 56.77 billion
compared to KShs 16.36 billion in 2010. During the 1H2015, liabilities stood at KShs. 61.43 billion while the deposits increased by 7%
from December 2014 to KShs. 59.9 billion.
Deposits and liabilities
Deposits and Total Liabiliies for 2010 - 1H2015 in KShs Billion

70,000,000
56.14
60,000,000
50,000,000
56.77
43.3
42.26
40,000,000
33.28
32.75
30,000,000
20,000,000
61.43
59.9
23.44
22.96
16.36
15.84
10,000,000
Customer and Banking Insituions Deposits
2010
2011
2012
Total Liabiliies
2013
2014
1H2015

42

c. Shareholders Funds
The Bank has continued to register growth in Shareholders Funds which increased by CAGR of 18.3% in 2014 from 2010, to sum up
to KShs 7.81 billion. Further, the Banks regulatory capital have continuously remained well above the CBK and BOU stipulated
minimums over the 5 year period. As at 30th June 2015, the Shareholders funds were at KShs. 8.9 billion.
Shareholders funds for year 2010 - 1H2015 in KShs Billion

10,000,000
8.9
9,000,000
7.81
8,000,000
7,000,000
6.02
6,000,000
4.77
5,000,000
4,000,000
3.84
3.37
3,000,000
2,000,000
1,000,000
2010
2011
2012
2013
2014
1H2015
12.12. Ratio Analysis

Key Ratios
1H2015
Total Capital to Risks Assets ratio (%)
Liquidity (%)
NPA*/Gross Advances (%)
Operating Expenses to Total Income (%)
Operating Expenses and Provisions
to Total Income (%)
Return on Equity (%)
Return on Asset (%)
Earnings per share (KES)
Dividend per share (KES)
*Non-performing advances less provisions
43

16
40.7
3.2
36
42
11
2
573
-
2014
16
44
3.5
35
38
28
4
1, 616
160
2013
15
34
3.7
34
37
32
4
1,434
561
2012
19
39
1.5
28
30
2011
21
34
1.8
36
38
2010
21
29
2.5
37
41
31
4
1,075
360
32
5
891
340
29
5
786
304

12.13. Imperial Banks Prospects and Future
Strategy
Imperial Bank has shown consistent performance over the last
20 years with sustained growth in customer deposits year on
year and an increase in its range of products and services. The
Bank remains focused on its desire to better serve its customers
through its philosophy of offering innovative service and solutions
to customers, utilizing secure, cutting edge delivery channels and
well trained human resource.
Continuous investment in development of Human

Resources to have a pool of competent professional
individuals and develop leaders to cater for growth
and succession planning
Promote employee engagement and entrench the corporate culture and values across the organization
Additionally, the Bank continues to provide various banking products for its Corporate and Retail Banking segments and is looking
to increase the range of product to include Islamic Banking, Global Money transfer among others.
The Bank is committed to continue efforts to expand in Kenya
so as to have a presence in most of the major towns and cities
in Kenya, Uganda, and the region to support its customers needs.
The Banks future prospects and medium term strategy will be established based on the rapidly changing and increasingly challenging social, political and economic environment across the region.
The key drivers of business growth for the bank are as highlighted
below:
Maintaining and growing market share through operationence within the framework of appropriate and adequate
internal control systems
Diversifying and increasing the customer base through the

introduction of innovative and cutting edge banking channels;
Continuing with the Banks local and regional expansion

to support all customers of the Bank wherever they are;
Leveraging on the balance sheet and brand strength across

the region where the Bank has a presence and thereby
increase cross Border Transactions.
Increase and diversify income streams
Technology focus on development and increase in usage

of the cutting edge delivery channels and deployment of
technological and card based solutions to cater for the
retail segment

44
13. Corporate Governance

Corporate governance is the process by which companies are directed and controlled. The Banks board of directors is responsible for the
governance of the bank and the group while the shareholders are responsible for the appointment of the directors and auditors.
13.1. Profiles of the Directors

The Banks Board is led by the Chairman Mr. Alnashir Popat and other five non-executive Directors, the Group Managing Director and 3
non-executive independent directors.
The Directors, collectively have vast experience stemming out of their varied backgrounds in different disciplines, which include, inter alia
Banking, General Management, Finance, Systems Management, Accounting and Investment Analysis, in addition to hands on experience in
various industries. The unique collective experience of our Board members provides a superior mix of skills as required by the Board, in not
only discharging its responsibilities and providing a strategic vision and direction for the Bank, but more importantly also adds value to, and
brings in the element of independent judgment and risk assessment to bear on the decision making process.
Profile of the Directors, Nationality and Date of Birth (DOB)
Directors Name
Mr. Alnashir Popat
Chairman
Nationality: Kenyan
DOB: 1951
Nationality: Kenyan
DOB: 1959
Mr. Anwar Hajee
Non-Executive
Nationality: Kenyan
DOB: 1956
Mr. Jinit Shah
Non-Executive
Nationality: Kenyan
DOB: 1956
Non-Executive
Nationality: Kenyan
DOB: 1958
Mr. Vishnu Dhutia
Non-Executive
Nationality: Kenyan
DOB: 1959
Mr. Hanif Mohamed Amirali
Somji
Non-Executive
Nationality: Kenyan
DOB: 1955
Profile
Mr. Alnashir Popat is 63 years old and was appointed as a Director to the Bank on the 24 December 1992.
Mr. Alnashir Popat holds a Bachelor of Arts Degree in Business Studies. He is a businessman and currently a NonExecutive Director of the Bank. He also serves on the board of several other companies, including Pathcare Ltd,
Downtown Hire Purchase Co. Ltd, Little Berry Centre Ltd, Kalapi Ltd, Imaran Real Estate Ltd, A-Star Properties Ltd,
Sandview Properties Ltd, among others.
Mr. Abdulmalek Janmohamed is 55 years old and was appointed as a Director to the Bank on the 24 December
1992. Mr. Abdulmalek Janmohamed holds a Bachelor of Science Degree in Finance and Management Data Systems.
He is a banker and also serves on the board of several other companies including Janco Investments, Downtown
Hire Purchase Co. Ltd, Upperview properties Ltd, Downtown Holdings Ltd, and Sandview Properties Ltd.
Mr. Anwar Hajee is 58 years old and was appointed as a Director to the Bank on the 15 November 1993.
Mr. Anwar Hajee is a CPA (K) and ACMA finalist. He is a businessman and also serves on the board of several other
companies including African Business Consortium, Upperview Properties, Downtown Holdings Ltd, Sandview
Properties Ltd, Abdumal Investments Ltd, Coolxtreme Ltd and Downtown Hire Purchase Co. Ltd.
Mr. Jinit Shah is 58 years old and was appointed as a Director to the Bank on the 3 November 1997.
He holds a Higher National Diploma in Business Studies. He is a businessman and also serves on the board of several
other companies including Kenblest Ltd, Kifaru Industries Ltd, Upperview Properties Ltd, Downtown Holdings Ltd,
Sandview Properties Ltd, Nav Plastics Ltd, Mcneel Millers, and Coolxtreme Ltd, Deepna Industries Ltd.
Mr. Mukesh Kumar is 56 years old and was appointed as a Director to the Bank on the 3 November 1997.
Mr. Mukesh is an O Levels finalist. He is a businessman and also serves on the board of several other companies
including Automatic Controls, Upperview properties Ltd, Downtown Holdings Ltd, Sandview Properties Ltd, Hard
Tech Ind. Supp., Power Protection Ltd, and Momentum Holdings Ltd.
Mr. Vishnu Dhutia is 55 years old and was appointed as a Director to the Bank on the 15 February 1995.
Mr. Dhutia holds a Diploma in Business Administration. He is a businessman and also serves on the board of several
other companies including East Africa Motor Industries Ltd, Upperview Properties Ltd, Downtown Holdings Ltd,
Sandview Properties Ltd, and East Africa Motor Industries (Sales & services) Ltd.
Mr. Hanif Mohamed Amirali Somji is 59 years old and was appointed as a Director to the Bank on the 31 July 2002.
Mr. Somji holds Bachelors of Arts Degree in Economics and Accounting. He also serves on the board of several
other companies including Freight Forwarders Kenya, The Combined Warehouses Ltd, Reynolds and Co. Ltd,
Craysell Investments, Coolxtreme Ltd, Upperview Properties Ltd, Sandview Properties Ltd among others.

45

Directors Name
Profile

Non-executive Independent
Nationality: Kenyan
DOB: 1976
Mr. Eric Bengi is 39 years old and was appointed as a Director to the Bank on 01 July 2014.
Mr. Bengi holds a Bachelor of Laws LLB (Hons) and CPS (K). He is lawyer by profession and is currently a
Managing Partner at Bengi Miriti & Associates Advocates.
Mr. Omurembe Iyadi

Nationality: Kenyan
DOB: 1953
Mr. Iyadi is 62 years old and was appointed as a Director to the Bank on the 01 July 2014.
Mr. Iyadi holds a Bachelor of Commerce (Hons), FCCA and CPA (K). He is a businessman and currently owns
Foundation Support Services, Samo Securities Limited, and Rupia Limited.
Mr. Chris Diaz

Nationality: Kenyan
DOB: 1968
Mr. Diaz is 47 years old and was appointed as a Director to the Bank on the 1st February 2015.
Mr. Diaz holds a Bachelor of Commerce (Hons), CIM and an MSC, in Marketing. He is a marketer and has worked
with both Bidco and Kenya Airways.
13.2. Governance Principles and Board Committees

The Board ensures that accountability among staff is enhanced through a system of objective goal setting and periodic performance
appraisals. Additionally, the Board has delegated financial and other powers with clearly defined accountabilities for each.
In order to ensure that high levels of efficiency and effectiveness are maintained, the Bank has a good pool of well-trained staff with the
appropriate skills required to perform their duties. Further, the Bank ensures that all staff undergo regular training to improve and develop
their skills.
There is a Code of Ethics that staff adhere to, inter alia, matters touching upon safety and health, environment, compliance with laws and
regulations, confidentiality of customer information, financial integrity and relationships with external parties. This Code of Ethics is
reviewed periodically and amendments incorporated if necessary.
The Board has set up seven Board Committees and two top level Management Committees to assist in discharging its responsibilities.
These include:
Board and Management Committees

46 Imperial
Strengthening
the internal
control
environment
financial
reporting and
auditing function
Four times
Omurembe
Iyadi
Strategic
planning
decision making
in accordance
with powers
conferred by
the shareholders
Four times
Alnashir Popat
Omurembe
Iyadi
Anwar Hajee
Vishnu Dhutia
Jinit Shah
Mukesh Kumar
Patel
Anil Shah
Four
non-executive
directors, One
non-executive
independent
director, and
Head of Internal
Audit
Six
non-executive
directors, two
non-executive
independent
directors, one
executive
director
Alnashir Popat
Abdulmalek
Janmohamed
Anwar Hajee
Vishnu Dhutia
Jinit Shah
Mukesh Kumar
Patel
Hanif Somji
Omurembe
Iyadi
Gitonga Bengi
Board
Audit
Committee
Board
Executive
Committee
Board
Credit
Committee
Executive
director, four
non-executive
directors and
head of credit
Reviewing and
overseeing the
overall lending
of the bank
Appraisal,
budgeting and
approval of
hardware and
software
purchases
Non-executive
director,
executive
director and
head of IT
Board
Automation
Committee
Four times
As and when
necessary
Gitonga Bengi
Abdulmalek
Janmohamed
Anwar Hajee
Hanif Somji
James Kaburu
MEMBERS
Gitonga Bengi
Chris Diaz
Abdulmalek
Janmohamed
Anwar Hajee
Jinit Shah
Mukesh Kumar
Patel
Naeem Shah
Chris Diaz
Anwar Hajee
Abdulmalek
Janmohamed
Donald Ochola
Anwar Hajee
COMMITTEE CHAIRMAN
Four times
FREQUENCY OF MEETINGS
Supervision
oversight and
monitoring of all
the risks taken
by the bank
MAIN FUNCTION
Executive
director, two
non-executive
directors, One
non-executive
independent
director and
Chief Finance
Officer
COMPOSITION
Board
Risk
Committee
BOARD COMMITTEES
Anwar Hajee
Abdulmalek
Janmohamed
Jinit Shah
Ikua Gacheche
Anwar Hajee
As and when
necessary
Set and review

human
resources
policies and
approve senior
management
appointments
Two
non-executive
directors,
executive
director and
head of HR
Board Human
Resources
Committee
Anwar Hajee
Abdulmalek
Janmohamed
Anwar Hajee
As and when
necessary
Set and review

ethical standards
for the board
and the
management
Non-executive
director,
executive
director
Board Ethics
Committee
Overall balance
sheet management
including development of a risk
monitoring
framework and
ensuring compliance with all
statutory requirements
Executive
director, Head
of Credit, Head
of Treasury, and
Chief Finance
Officer
Asset and
Liability
Committee (ALCO)
Weekly
James Kaburu
Naeem Shah
Nina Shah (Ms.)
Naushad Haleem
Sanjeet Shah
Donald Ochola
Ikua Gacheche
Anil Shah
Kalpesh Shah
Mustaq Dar
Mehbooba Shamji
MEMBERS
Abdulmalek Janmohamed
Naeem Shah
Nina Shah( Ms.)
James Kaburu
Abdulmalek
Janmohamed
COMMITTEE CHAIRMAN
Weekly
FREQUENCY OF MEETI NGS
Implementation of business
operational plans.
Review progress against
budget and strategic plan.
Review of credit proposals.
Management of Key
business risks and
opportunities.
Develop employeee
remuneration guidelines.
Oversight over ALCO
MAIN FUNCTION
Executive director, Head

of Credit, Chief Finance
Officer, Head of Corporate Banking, Head of
Retail Banking, Head of
Operations, Head of
Treasury, Head of IT, Area
Manager-Mombasa, Area
Manager-Nairobi, Senior
Business Development
Manager
COMPOSITION
Executive Committee
(EXCO)
MANAGEMENT
COMMITTEES

47
48

Head of
Corporate
Banking
Sanjeet Shah
Head of Treasury
Nina Shah
Head of
Marketing
Muthoni
Kanyana
Chief
Finance
Officer
James Kaburu
Area
managerMombasa
Mustaq Dar
Head of I T
Don Ochola
Senior Business
Development
Manager
Mehbooba Shamji
Head of Human
Resources
Ikua Gacheche
HEAD OF
INTERNAL AUDIT
Anil Shah
Head of
Retail Banking
Kalpesh Jotangia
Head of
Operations
Naushad Haleem
BOARD OF DIRECTORS
GROUP MANAGING
DIRECTOR
Abdulmalek Janmohamed
Area
ManagerNairobi
Vishvesh Shah
Head of Credit
Naeem Shah
IBL Top Level Structure
Given below is the organization structure of the Bank
13.3. Organization Structure

of the Management
The members of the senior management of Imperial Bank consist of banking professionals who have a wealth of experience with local
as well as multinational banks. As at the date of this Information Memorandum the Senior Management of the Bank are:
Senior Management IBL (K)
Name
Nationality: Kenyan
DOB: 1959
Mr. Sanjeet Shah

Head of Corporate Banking
Nationality: Kenyan
DOB: 1969
Mr. Anil Shah

Head of Internal Audit
Nationality: Kenyan
DOB: 1958
Mr. Abdulmalek Janmohamed is the Group Managing Director of Imperial Bank

and has been with the bank since its inception in 1993. He was instrumental in
steering it to a fully-fledged Commercial bank in 1996. With over 26 years experience in Banking, Finance and Management, Mr Janmohamed began his banking
career as a Management Trainee at Diamond Trust Bank between 1983 to 1986,
where he rose to Manager position before joining Credit Finance Corporation
Ltd (CFC Bank) as a Senior Manager, Advances. He holds a Bachelor of Science
degree in Finance and Management of Data Systems from Syracuse University,
USA.
Mr. Sanjeet Shah joined the bank in January 2006. Prior to his appointment, he was
the Head of Consumer Banking for Fina Bank Ltd. Having started his career as a
management trainee in 1980, Sanjeet has held various senior positions in Corporate Banking and Operations with Fina Bank, Bullion Bank, Trust Bank and Citibank
Kenya. He holds a Bachelor of Science degree in Banking and Finance from USIU,
Nairobi and a Masters in Business Administration from USIU, San Diego- California USA. As Head of Corporate Banking, Sanjeet is responsible for the Banks Product(s) and Market development by ensuring that the Corporate Business mobilization strategy is in place, overseeing, building and maintaining client relations and
overall brand identity. He has broad experience in marketing and strategy having
attended both local and international training seminars and Workshops.
Mr. Anil Shah joined Imperial Bank in June 2006 to head the Internal Audit Department. Anil started his career with Kassim Lakha Abdulla and Co (now PKF) and
moved to Coopers and Lybrand (now PWC) where he trained as a Computer
Audit Specialist. Thereafter he joined the Power Technics group of companies as
Finance Director before moving to Perth, Australia where he had varied experience with different industries including conducting a forensic audit of the Alan
Bond group which was the largest group liquidation in Australia. He then worked
as a Financial Controller with Spin Knit Dairy Nairobi and as an IT Consultant
at Radbone Clark Kenya Ltd before joining Imperial Bank. He is a Fellow of the
countant, CPA (K).

49

Ms . Mehbooba Shamji
Senior Business Development Manager
Nationality: Kenyan
DOB: 1967
Mr. Vishvesh Shah

Area Manager, Nairobi Region
Nationality: Kenyan
Mehbooba joined the Bank in August 1998 and has served in various senior capacities. She currently holds the position of Senior Business Development Manager and manages the Credit Support unit whilst maintaining business oversight
over Malindi and Parklands region branches. Mehbooba holds a Bachelor of Arts
degree (Economics and Actuarial Science) and a Master of Arts degree (Economics) from the University of Calgary. Prior to joining Imperial Bank, Mehbooba held
the position of General Manager, Tricon Global Restaurants in Calgary, Canada
and was responsible for the companys expansion into new markets.
Vishvesh joined the Bank in January 2009. As the Area Manager Nairobi units,
he has regional business oversight of various Nairobi braches and is responsible
for directing and guiding the corporate and retail relationship teams that fall under
his portfolio.Vivesh holds a Bachelor of Business Administration degree in Finance
from the University of Texas. He brings to Imperial Bank over 20 years work ex-
DOB: 1962
including Hyper Money Solutions Ltd in the United Kingdom, United Credit Union
Ltd in Australia and Southern Credit Banking Corporation Ltd in Kenya.
Mr. Kalpesh Jotangia
Kalpesh Jotangia joined Imperial Bank in 2005 as an Operations Manager and was
Head of Retail
First American Bank as a Branch Manager, Diamond Trust Bank as Branch manager
and Prime Bank as Assistant Manager, Operations. He has a wealth of experience
spanning over 17 years within the sphere of operational support, project development and implementation. He has a Bachelor of Business Administration degree in Finance from Washington University, a Diploma in Business Accounts and
Management, and an MBA In international Banking and Finance from Washington
International University.
Nationality: Kenyan
DOB: 1976
In June 2014, Kalpesh was appointed to the role of Head of Retail Banking with
oversight of the Card Centre, Value Added Services (including electronic channels) and all Retail business units.
Mrs. Muthoni Kanyana
Muthoni Kanyana joined the Bank in November 2005 as a Communications Of -
Head of Marketing
and Communications, a position she has held since January 2012. Muthoni holds
a Bachelor of Commerce degree (Marketing) from Catholic University of Eastern Africa. She has successfully attained the Chartered Marketer status and has
participated widely in numerous workshops and conferences within her realm
of expertise. Muthoni has previously held positions with Access Kenya and MCL
Saatchi & Saatchi as Head of Corporate Sales and Account Executive respectively.
In her current role, she is responsible for driving the Banks marketing and communications strategy in order to project the positive image, visibility and good will
of the Imperial Bank Brand.
Nationality: Kenyan
DOB: 1977
50


Mr. James Kaburu
Nationality: Kenyan
DOB: 1950
Mr. Donald Ochola

Head Of Information Technology
Nationality: Kenyan
DOB: 1968
January 1996. Before joining Imperial Bank Mr. Kaburu held senior positions as
a Senior Internal Auditor with Deloitte & Touch (Kenya) and Shell BP (Kenya),
Standard Chartered Bank and Chief Accountant at Credit Finance Corporation.
pleted his Executive MBA at Moi University. He is also well versed with Risk
Donald Ochola joined Imperial Bank in December 2004 as the Database Administrator and was later promoted to Head of IT in the year 2005. He has over
14 years experience in IT having previously worked for CBA Bank as an Oracle
Product Specialist and with Soft Ware Technologies as a Technical Manager. His
-
technological support and services aimed at achieving the Banks business and
operational objectives.
Mr. Ikua Gacheche
Head of Human Resource
Nationality: Kenyan
DOB: 1977
Ikua joined the Bank in January 2008 as the Human Resources Manager, having
come from Commercial Bank of Africa (CBA) where he served in the same
capacity. In 2012, he was appointed to the Head of Human Resources role. He
is charged with the responsibility of coordinating the delivery of the Human Resources management function both at strategic and operational level across the
Bank. With over 15 Years professional experience, managing HR Operations, Ikua
holds a Bachelor of Commerce in Accounting/Business Administration Degree
from Daystar University and is pursuing his MBA, with a specialization in HR. He is
a member the Institute of Human Resource Management (IHRM K).
Ms. Nina Shah

Head of Treasury
Nationality: Kenyan
Date of Birth: 1963
is the Head of Treasury, Imperial Bank. With over 17 years broad banking experience, Nina joined Imperial Bank in 1999 after working as Head of Private Banking
at The Delphis Bank and as a Financial Controller with same bank, prior to which
she was an Auditor with the PriceWaterhouse Coopers (K). She oversees the
growth of the banks Forex management and investment strategy and ensures the
smooth running of Remittances and Trade Finance functions. She is a CPA (K) and
has served as a Treasurer and Assistant Treasurer with the Oshwal Youth League
and the Theosophical society.

51

Mr. Naeem Shah
Head of Credit
Nationality: Kenyan
DOB: 1950
Mr. Mustaq Dar

Area Manager-Mombasa Region
Nationality: Kenyan
DOB: 1966
Mr. Naushad Haleem

Head of Operations
Nationality: Kenyan
DOB: 1974
With over 35 years of experience in Banking, Credit and Hire Purchase, Mr. Shah
Heads the Credit and Asset Finance Department of Imperial Bank. He is responsible for the internal and external borrowings and the management of the credit
portfolio across the bank. After working for 5 years with Habib Bank Limited in
Pakistan, Mr Shah joined the Kenyan Banking Sector as an Advances Manager with
DTB Bank and later proceeded to Credit Finance Corporation as Manager Hire
Purchase, a position he held until he joined the then Imperial Finance Securities
Co Ltd. as Operations Manager. Mr. Shah Holds a Bachelors of Arts Degree with
honours in Economics and Statistics from the University of Punjabi and is a member of Institute of bankers.
Mustaq joined Imperial Bank in 1996 as a Manager, Mombasa Branch. He began his career in Audit having worked for GG Sheikh & Co. Mombasa, Premier
Savings and Finance Limited, and GIGI & Co. Ltd. As the Area Manager for the
coastal units, his main task revolves around identifying new business opportunities,
products and lines of business across the region while also being responsible the
bottom-line performance of the same units. He is also responsible for growth
strategies for the region and is expected to contribute to the Banks strategy as a
Naushad joined Imperial Bank in 2003 as an Assistant Manager,Treasury, where he

served for 4 years under the Head of Treasury. He was later, in 2007, appointed
to the role of Branch Manager responsible for Service Delivery at the Branch. In
Department in Operations (CBU). In April 2011, Naushad was promoted to Senior Manager Operations. In June 2014, he was appointed to the role of Head of
Operations with oversight of the IBKL Branch Network and Central Operations
(CBU and Quality Assurance). With over 15 years experience, Naushad has a
degree in Business Administration, with emphasis in Project Management and
Finance from University of Empresarial (Costa Rica) and an MBA in Banking from
Executive from Ethica Institute of Islamic Finance.
52


Senior Management IBL (U)
Name
Mr. Ramaswamy Radhakrishna
Chandramouli
Mr. Chandramouli is the Managing Director of Imperial Bank (Uganda) Limited

and has been with the bank since February 2015. He is a seasoned banker and
Managing Director
Nationality: Indian
DOB: 1953
experience spread over Asia, Europe and Africa. He has 17 years enriched experience in various African countries i.e. Zambia, Comoros, Djibouti, Malawi, MoHe has been part of the senior management team and represented on several
boards of banks in Africa i.e. board of Exim Banks of Comoros, Djibouti and ZamBank Initiative. He is adept at liaising for African countries with Direct Foreign Inintensive training at International banks such as NATWEST, London, Central Bank
of India, London, RABO Bank, Netherlands besides attending executive education
program in management at Harvard Business School, Boston USA duly sponsored
by the World Bank. He attended a number of international conferences where he
has been a speaker at some. He is a graduate from Osmania University and is an
associate member of the Indian Institute of Bankers. He is a multilingual specialist
with command over 6 languages & excellent writing skills. As managing director,
hes responsible for development and implementation of strategic plan for Imperial Bank (Uganda) Limited & oversees its day to day running. He is accountable
to the board of directors and shareholders of the Bank.
Mr. Jawaid Ali

Executive Director and Head
of Operations
Nationality: Pakistani
DOB: 1972
Mrs. Nsasiirwe Annettie Runtemu

Head of Human Resources
Nationality: Ugandan
DOB: 1974
Mr. Jawaid is the Executive Director & Head of Operations of Imperial Bank
(Uganda) Limited and has been with the bank since August 2012. He is a career
banker with over 20years of banking experience. He oversees the IBUL Branch
Network and Central Operations (CBU and Quality Assurance) and also supervises the Information Technology (IT) function. He joined Imperial Bank (Uganda)
Limited from Habib Bank (Kenya) Limited where he worked as Country Head
Controls and Compliance Risk. Mr. Jawaid Ali holds a Masters Degree in Business
Administration (Banking & Finance), Masters of Administrative Sciences, Masters
of Arts (History) and Bachelor of Science all from University of Karachi, Pakistan.
Annettie joined Imperial Bank (Uganda) Limited in February 2011 as the Head
of Human Resources. She previously worked with Mukwano Group of Companies as General Manager Management Services where she was instrumental in
organizational review and restructuring. She has over 15years experience in corporate strategy formulation, human resource diversity management and logistics
management. She coordinates the delivery of the Human Resources management function both at strategic and operational level across the Bank. She holds
Masters Degree in Business Administration and Bachelor of Business Administration both from Makerere University and a Postgraduate Diploma in Human
Resource Management from Uganda Management Institute. She is a member of
the Human Resource Managers Association of Uganda (HRMAU).

53

Mr. Vaidyanathan Tirunilayi
Head of Credit
Nationality: Indian
DOB: 1957
Mr. Vaidyanathan has over 20 years broad banking experience specializing in credit
management. He holds a Bachelor of Commerce from the University of Pune.
Having worked with State Bank of India as Assistant General Manager a position
he held for 4 years until he joined Imperial Bank (Uganda) Limited. As the Head
of Credit Department, he reviews all credit proposals submitted for granting of
facilities. He is responsible for the internal and external borrowings and manInstitute of Banking and Finance
Mr. Nitin Shendye

Ag. Head of Corporate and Retail Banking
Nationality: Indian
DOB: 1974
Mr. Emmanuel Banyenzaki

Head of Internal Audit
DOB: 1974
Mr. Nitin has good analytical skills, commitment and zeal for excellence. He is a
Chartered Financial Analyst from ICFAI and holds Bachelors of Science from Delhi University. Mr. Nitin has over 16 years of Banking experience and has worked
in Top Private Banks like Axis Bank (till Sep 2005, last worked as Counter Head),
HDFC Bank (Sep 2005 to Feb 2011, worked as Branch Head) and Yes Bank
(Branch Head from February 2011 till June 2013) when he joined Imperial Bank
(Uganda) Limited. This experience gave Mr. Nitin a good exposure in Liability,
Asset and Third Party business. At Imperial Bank (Uganda) Limited, Mr. Nitin is
responsible for the Banks Products and Market development by ensuring that the
corporate business mobilization strategy and retail is in place, overseeing, building
and maintaining client relations and overall brand identity.
Mr. Emmanuel Banyenzaki joined in June 2013 as the Head of Internal Audit at
Imperial Bank (Uganda) Limited. He has a wealth of experience in both
Banking operations and Internal Audit for over 15 years.
He holds Master of Business Administration majoring in Finance from Uganda
Martyrs University Nkozi, Bachelor of Commerce from Makerere University and
Higher Diploma in Marketing from National College of Business Studies Nakawa
before joining Imperial Bank (Uganda) Limited, worked with United Bank for Africa (Uganda) Limited as Country Head Internal Audit, Global Trust Bank (Uganda) Limited as Manager Internal Audit as well as Head Internal Audit at Diamond
Trust Bank Uganda. Emmanuel began his banking career from Centenary Bank
where he worked both in Branch Banking Operations and Internal Audit.
Mr. Benedict Kizza Mujabi

Head of Compliance
DOB: 1982
54

Mr. Benedict Kizza Mujabi joined imperial bank in August 2014 to Head the
Compliance department. Benedict has a wealth of experience in compliance
prior to joining imperial bank, Benedict worked with United Bank for Africa (U)
Ltd as Head, Risk & Compliance (2011-2014). He also worked with Post bank
Uganda Ltd as an Internal Auditor (2006-2011).
He holds a Bachelor of Science from Makerere University plus a Masters of
Business Administration (on going) from Makerere University as well.

Mr. Didas Bagambagye
Ag. Head of Risk
DOB: 1985
Ms. Darshana Bhatia

Head of Finance & Administration
Nationality: Indian
DOB: 1972
Ms. Nalule Leilah

Ag. Legal Manager & Company Secretary
DOB: 1985
Mr. Mpuuga Robert

Head of Treasury
DOB: 1980
was later promoted to the position of risk manager in 2014. He has over 6 years
He has completed a masters degree (MBA) and holds a bachelor of business
administration with accounting option from Makerere University. He is currently
cate in risk management and corporate governance from Downton Hill-United
Kingdom, Basic Banking operations and customer service etc. He currently takes
care of the risk function in the bank
Ms. Darshana is the Head of Finance & Administration department Imperial
Bank (U) Ltd. She holds a bachelor degree in Commerce from University of
Mumbai and is also a member of the Institute of Chartered Accountants of India
and the Institute of Cost and Works Accountants of India, Darshana has vast
experience in financial control and management having previously worked with
Orient Bank Ltd (U) as Head of Finance, Hima Cement Ltd as a Reporting
Accountant and Senior Financial Accountant. Darshana also worked with Dayal
and Lohia in Mumbai as a Senior Auditor.
Ms. Leilah Nalule joined Imperial Bank in October 2012 as a Legal officer. She has
since grown through the ranks and is currently Ag. Legal Manager and Company
Secretary. She holds a post graduate diploma in legal practice from Law development Centre and a Bachelors of Law from Makerere University. She has a
wealth of experience in Legal practice having worked at Katende Ssempebwa &
Co. Advocates, Impala Legal Advocates and Consultant then as a legal counsel at
Pioneer Easy Bus Limited before joining Imperial Bank. She currently oversees the
Legal function at the bank
Mr. Robert is a banker and entrepreneur. He is the Head of Uganda charged with
the responsibility of overseeing the banks Forex management and investment
strategy as well as ensuring the smooth running of the remittances and Trade
Finance functions. He holds a bachelors degree in Commerce from Makerere
University and an international ACI certificate. Hes at moment pursuing ACCA
qualification. Over the years, he has also attended various leadership and
management courses from several institutions.
Mpuuga has a vast experience in treasury, having worked with Cairo International
Bank in international Division and as a Forex trader and money market dealer.
He also worked with Housing Finance Bank Uganda for 7 years as Chief Dealer.

55

13.5. Employees
The Banks total workforce has been steadily growing as shown below:
Employee Numbers from December 2009 to December 2014
Year End
December 2014
December 2013
December 2012
December 2011
December 2010
December 2009
56

No. of employees
590
596
527
457
344
283
14. Risk Factors

Prospective investors should read the entire Information Memorandum (including any documents available for inspection) and
reach their own views prior to making any investment decision.
Investing in Debt Instruments involves certain risks. The Issuer
believes that the factors described below represent the principal risks inherent in investing in Debt Instruments issued under
this Information Memorandum, but additional risks and uncertainties not presently known to the Issuer or that the Issuer
currently believes to be immaterial could also have a material
impact on its respective business operations or the Debt Instruments.
14.2. General Risks

(i) Political Risk
Kenya has experienced some political instability in the past. The
post elections violence in 2008 demonstrated the risk associated
with such instability in terms of business environment, and hence
was negatively impacted and many companies reported dismal
stability which could result in a drastic decline in the demand for
the products offered by banks especially credit. The decline in
the performance of banks.
Potential investors should ensure that they fully understand

all the risks relating to the relevant Debt Instruments prior to
making any investment decision. Potential investors should seek
ments.
The promulgation of a new constitution and the subsequent

peaceful elections however, are a good indicator that political
maturity and stability of the country has improved. It is thus
hoped that the country, going forward will not experience such
unrest again.
14.1. Risk Management Principles
(ii) Economic Risk
The Banks activities exposes it to a variety of diverse and complex types of risks related to its business as a Banking institution.
These activities involve analysis, evaluation, acceptance and management of risks. Taking risk is core to the banking business and
the inherent risks are an inevitable consequence of the Banks
operations.
Imperial Bank has, over the years, had a keen focus on risk management both in its business processes and products, which have
aided the Banks steady growth. Risk management is carried out
by the Risk Management department under risk management
policies approved by the Board of Directors. The risk management policies are designed to identify and analyse all inherent
risks, to set appropriate risk limits and controls, and to monitor
the risks adherent to limits by means of reliable and up-to-date
management information systems. The Group regularly reviews
Over the last couple of years, inflation has been on an increasing

trend until August 2014 directly impacting various sectors of the
on the decline attributed to the ever changing international oil
prices which have reduced, recording the lowest prices since the
year 2010. Likewise, other economic factors that have adversely
affected the performance of the Kenyan economy include the
rates and reduction in bilateral and multi-lateral aid. Efforts are
being made on infrastructural improvements and investments in
most sectors of the economy, throughout the country aimed
at lowering the cost of doing business in Kenya. Additionally, as
Imperial Bank operates within the wider region, the stability of
other East African economies could impact overall performance.
14.3. Risk Factors Relating to the Business

The Board provides written principles for overall risk manage-
markets, products and emerging best practice. In addition, the

internal audit department is responsible for the independent
review of risk management and the overall control environment.
Imperial Bank, like any other player in t h e banking industry, is
exposed to several risks which, upon crystallisation, could have
mance. The most important types of risks are credit risk, market
risk, liquidity risk, and operational risk amongst other general
risks. Market risk includes currency risk, interest rate risk and
to mitigate them are outlined below.
57

regulatory risk, credit risk, market risk, liquidity risk, and operational risk.
(iii) Regulatory Risk

Regulatory risk relates to the risk of non-compliance with laws,
rules, regulations, prescribed practice or ethical standards issued
from time to time. Regulatory risk may arise in instances where
the laws and rules governing the conduct of business may be
ambiguous or change drastically.
The Banks core regulatory risk arises from compliance to the
Central Bank of Kenyas banking regulations as well as the Bank
of Ugandas banking regulations. The Bank ensures that 100%
compliance is enforced through independent monitoring by the
14. Risk Factors

Internal Audit team. New policy guidelines and regulations issued
by the CBK and BOU could impact on the operations of the Bank
and hence on its ability to service the Notes.
the various categories of borrower/client. Management

assesses credit quality of the customer taking into acfactors.
(iv) Reputational Risk

Reputational risk is the risk of damaging the Banks image, or the
potential that negative publicity regarding a Banks business practices, whether true or false, which may impair its ability to retain
and generate business. Such risk may cause a decline in the customer base, costly litigations, or revenue reductions.
ly manage any or all of the other risk types. The ultimate accountability for reputational risk management rests with the Board. The
Bank has put in place mechanisms including legal measures where
necessary to prevent and/or proactively intervene in any situation
that may potentially damage the institutional image. The Board
of Directors explicitly addresses reputational risk as distinct and
controllable risk through a versatile and robust risk management
framework for reputational risk. Responsibility for corporate rep-
To manage, limit and control concentrations of credit

risks, some of the specific controls and mitigation measures include;
i) Obtain collateral for loans and advances to customers
business assets or financial instruments and deposits placed
such as mortgages over properties, charges overunder lien.
ii) Credit related commitments with Guarantees and
letters of Credit collateralized by the underlying shipments
of goods to which they relate.
iii) Impairment and provisioning policies where the internal
and external systems focus more on credit-quality mapping
from inception of lending of the loan or advance.
-
er or counter-party.
(v) Credit Risk

The Group takes on exposure to credit risk, which is the risk of
cial instrument fails to meet its contractual obligations, and arises principally from the Banks loans and advances to customers
and other banks and investment securities. For risk management
reporting purposes, the Bank considers and consolidates all elements of credit risk exposure. Credit risk is the most important
risk for the business.
The Board of Directors has delegated responsibility of the management of credit risk to its Board Risk Committee. The credit
risk management and control are centralised, and monitored on
an on-going basis, in the Risk Management departments of the
Bank and reporting to the Board Risk Committee. The measurement of these risks are thus embedded in the Banks daily
operational management.
In monitoring credit risk exposure, consideration is given to various components. These include;
The probability of default by the borrower/client on their

contractual obligations;
Current exposures on the borrower/client and the likely

future development, from which the Group derives the
exposure at default
The likely recovery ratio on the defaulted obligations
The Bank assesses the probability of default of individual

borrower/client using internal rating methods tailored to
(vi) Liquidity Risk

Liquidity risk includes the risk of being unable to meet the
to liquidate assets at a reasonable price and in an appropriate
timeframe.
The nature of banking, investment and trading activities results
in a continuous exposure to liquidity risks. Liquidity obligations
arise from requirements to repay deposits, advance committed funds, and make interest and other expense payments.
Sound liquidity management is crucial in protecting the Banks
future growth.
The Bank continually assesses liquidity risk by identifying and
monitoring changes in funding required to meet business goals
and targets set in terms of the overall Bank strategy. Liquidity
risk is managed closely and proactively by the Group Assets
and Liabilities Management Committee (ALCO) strictly
within the standards of the approved Assets and Liabilities
Management Policy with reporting to Executive Committee
(EXCO) of the Board on key risk elements. In addition, the
Bank holds a portfolio of liquid assets as part of its liquidity risk
management strategy.

58
14. Risk Factors

(vii) Market Risk
Market risk is the risk that changes in market prices, such as

interest rate, equity prices, foreign exchange rates and credit
spread (not relating to changes in the obligators/issuers credit
standing) will affect the Banks income or the fair value or future
Reporting of operational losses and initiation of remedial

action
Development of contingency plans
Giving training to staff to improve their professional competency
Market risk arises from open positions in interest rates and foreign currencies, both of which are exposed to the general and
Ethical and business standards
The risks arise mainly from trading and non-trading activities.
Obtaining insurance wherever feasible, as a risk mitigation

measure
The Board of Directors has delegated responsibility for management of Market Risk to the Board Risk Committee but the
overall management of market risk rests with ALCO. The Risk
department is responsible for the development of detailed risk
management policies, subject to review and approval by the
Board of Directors, and for the day to day implementation of
these policies. The Bank is primarily exposed to Interest Rate
and Foreign Exchange Risk. The policy guidelines and procedures in place are adequate to effectively manage these risks.
(viii) Operational Risk

Operational risk is the risk of direct or indirect loss arising from
a wide variety of causes associated with the Groups internal
processes, personnel, technology and infrastructure, and external events, other than credit, market or liquidity risks such as
those arising out of legal and regulatory requirements and generally accepted standards of corporate behaviour.
The entire operational risk management framework is subjected

the Internal Audit department are reviewed by the Board Audit
Committee and recommendations made implemented in line
with the agreed timeframe.
(ix) Strategic Risk

Strategic risk is the current and prospective impact on earnings
or capital arising from adverse business decisions, improper implementation of decisions or lack of responsiveness to industry
changes.
The Group is managing strategic risk as below:
The overall responsibility of managing Operational Risks is vested with the Board of Directors. The key responsibility for development of policies and programs to implement the Groups
operational risk management is with senior management of the
Group.
The above is achieved by development of overall standards for

the Group to manage the risk in the following areas:
Segregation of duties including independent authorisation of transactions
Monitoring and reconciliation of transactions
Compliance to regulatory and legal requirement
Documentation of control and procedure
Assessment of the operational risk on a periodic basis to
The Board approves a Corporate and Strategic Planning

policy that is reviewed periodically and whose implementation is monitored by the Group Managing Director.
area of product development, growth, marketing, sales,

human resource development and information and communication technology.
porate objectives.
The Bank has in place internal systems to ensure regular

monitoring and analysis of its external and internal environment so as to gather relevant management information and ensure that it is not unduly exposed to strategic
risk.
Additionally the Bank is exposed to risks arising out of

the operating environment characterized by increased
competition in the Banking industry, retention of key staff,
controls and information technology systems and their
margins.
59

14. Risk Factors

14.4. Risks Relating to this Transaction
Summarised below are a number of investment considerations
associated with an investment in the debt securities. However, the
considerations are not intended to be exhaustive and there may
be other considerations, which should be taken into account in
relation to an investment in the Notes.
(i) Liquidity
The Notes to be issued will be tradable on the Nairobi Securities
Exchange thus providing Noteholders with an avenue for liquidating their securities.This notwithstanding, the Noteholders may still
encounter lack of liquidity for their Notes. The Management of
Imperial Bank intends to market the Notes to a number of prospective investors thereby mitigating this risk by ensuring that a
reasonable number of investors will provide the required liquidity
and marketability for the Notes.
(ii) Interest Rate Risk

Noteholders of debt security instruments are exposed to changexposed to the risk of rising interest rates, which could rise above
the interest rate ceiling. We however, do not envisage this since
the current monetary policys target is to have a stable interest
rate environment.
(iii) The Risk of Change of Law

The Terms and Conditions of the Notes are based on Kenyan
law in effect as at the date of issue of the relevant Notes. No
assurance can be given as to the impact of any possible judicial
decision or change to Kenyan law or administrative practice after
the date of issue of the relevant Notes. A change in the taxation
laws relating to investment in the Notes may positively or negatively impact the ultimate return on the investment in the Notes.
(iv) Investors Regulation Risk

The investment activities of certain investors are subject to legal
investment laws and regulations, or review or regulation by certain authorities. Each potential investor should consult its legal
advisers to determine whether and to what extent (1) Notes
are legal investments for it, (2) Notes can be used as collateral
for various types of borrowing and (3) other restrictions apply to
its purchase or pledge of any Notes. Financial institutions should
consult their legal advisers or the appropriate regulators to determine the appropriate treatment of the Notes under any applicable risk-based capital or similar rules.
Imperial Bank has recommended that investors should seek pro-

60
15. General and Statutory Information

15.1. Board Authorisation
The establishment of the Issue and the issue of Notes here-under have been duly authorised by a resolution of the Board of Directors
of the Issuer passed on 30th March 2015. The Notes Issue is for an aggregate amount not exceeding KShs 2,000,000,000.00
15.2. The Issuer

The Issuer was incorporated in the Republic of Kenya as a private company limited by shares, under registration number C. 52022,
with the name Imperial Finance and Securities Company Limited in October 1992. The Bank later changed its name to Imperial Bank
The Bank converted from a private company to a public company in July 2015 and it was issued with a new company number C.
10/2015.
The Issuers subsidiary is listed below in Section 14.6.1 of this document.
15.2.1. Subsidiaries
The following is the only subsidiary of the Issuer:
Name
Imperial Bank Uganda
Limited
Country of Incorporation
Uganda
Percentage shareholding
58.6%
Nature of business
Commercial Banking
15.3. Authorised and Issued Share Capital

As at 31st December 2014, Imperial Banks authorised share capital is KShs 1,500,000,000 divided into 1,500,000 ordinary shares of
KShs 1,000 each. The issued share capital is KShs 1,248,407,000 divided into 1,248,407 ordinary shares of KShs 1,000 each. There is no
other class of authorized shares.
15.4. Regulatory and licensing

The Issuer and its subsidiary are subject to regulation and have been issued with licences by the following regulatory authorities:
Regulators and Licences
Legislation
Banking Act
Regulator
Central Bank of Kenya
Financial Institutions Act,

2004
Bank of Uganda
branches and ATM locations.

There are no disputes with any regulatory authorities.
61

Regulated Company
Imperial Bank (Kenya)
Limited
Imperial Bank (Uganda)
Limited
Licence number
CBK/BSD/02/84/2015
A1.025

15.5. Statutory Accountability
The Issuer observes all the laws and regulations governing its
operation as set out in the prudential guidelines issued by the
CBK which inter alia address matters of corporate governance.
Additionally, the prudential guidelines have provisions that mirror the Guidelines on Corporate Governance Practices by Public Listed Companies in Kenya (Corporate Governance Guidelines) issued by the CMA. Consequently, whilst Imperial Bank
is not a listed company and therefore not obligated to follow
the guidelines, it is in all respects compliant with the Corporate
Governance Guidelines.
15.6. Approval of the Capital Markets

Authority(CMA)
The Issuer has obtained the approval of the CMA for the offer
of the Notes via public offer.
15.7. Listing of the Notes on the Nairobi

SecuritiesExchange
The Issuer has obtained the approval of the NSE for the Notes
issued to be admitted to the Fixed Income Market Segment of
the Nairobi Securities Exchange.
15.8. Significant or Material Change

Save as disclosed in this Information Memorandum, there has
position or prospects.
15.9. Borrowing Powers

The Articles of Association of Imperial Bank Limited give the
Board of Directors of the Bank full power to borrow money
and to issue security for any debt, liability or obligation of the
Company. The Articles of Association however provide that any
sums borrowed by the Company shall not at any time, exceed
the nominal amount of the share capital of the Company for the
time being issued, without the previous sanction of the Shareholders of the Company in a general meeting.The Shareholders
of the Company have duly authorized the Note Issue. The Issuer has not, exceeded its borrowing powers.
15.10. Principal Objects

The principal object of the Issuer are set out in Clause III of
the Memorandum of Association and extracted below are as
follows:-
(a) To establish, carry on, continue, extend, and develop the

business of banking in all its branches in Kenya
and
elsewhere and in particular, but without limiting the generality of the foregoing, to carry on the business of obtaining, receiving, and holding of money on any current and
deposit account or in any manner whatsoever and whether
at interest or otherwise, of paying or collecting cheques
drawn or paid in by customers of providing facilities for the
withdrawal or transfer on moneys held by the Company
and the making of advances to customers and to do all
matters and things incidental thereto or which may, at any
time hereafter, at any place where the Company shall carry
on business, be usual in connection with the business of
banking or dealing in money or securities for money.
(b) To apply for, and hold a licence to transact banking
business in Kenya and elsewhere granted by the authorized licensing authority and to apply for, obtain and hold
all other licenses or judicial, government or legal sanctions
as the Directors of the Company may think necessary or
desirable to enable the Company to carry any of its objects
into effect.
(c) To advance, and lend without security or immoveable,
moveable and mixed securities, on cash, credit or other
accounts, on policies, debentures, bills of exchange, promissory notes, letters of credit or other obligations or on
rates or tolls, duly authorized to be made or levied by
any written law or on the deposit of title deeds, wares
and merchandise, bills of sale and lading, delivery orders,
warrants, or other mercantile indicia or tokens, bullion,
stocks and shares.
15.11. Loan Capital

The Issuer has no loan capital that has been authorised but un-issued.
15.12. Litigation
The Issuer is party to several litigious matters arising in the ordinary course of its business. The Issuer is party to the following
material litigations:

62

1) Nairobi HCCC No. 239 of 2013: Esgee Industries Limited (the
Borrower) v- Imperial Bank Limited
15.13. Auditors
Issuer issued a demand letter which prompted the Borrower to
Financial Reporting Standards issued by the International Accounting Standards Board, (IASB) for each of the financial periods
ending on 31st December 2010-2014 and issued an unquali-
from appointing a receiver.

The injunction was successfully lifted. The Issuer has, upon weighing its legal and commercial options, opted not to appoint a reber 2014 claiming the sum of KShs. 284,655,143.57 against the
judgment as the Borrower did not enter appearance.
The estimated value of the claim is KShs. 291,986,099.10.
Save as disclosed above, there are no other legal or arbitration
proceedings (including any proceedings which are pending or
threatened of which the Issuer is aware) which may have or had
in the past twelve months preceding the date of this Information
operations of the Issuer.
The auditors of the Issuer are currently PKF Kenya, P.O. Box
14077 00800, Nairobi, Kenya, who have audited the Issuers
15.14. Properties
The Bank owns no Properties. It leases all the Premises used
for its business operations.
15.15. Consents
Hamilton, Harrison and Matthews as Legal Counsel and PKF
ants have given, and not withdrawn, their respective written
consents to the issue of this Information Memorandum with
the inclusion herein of their reports, the references to those
reports, their names and the references to their names, as applicable, in the form and context in which these, respectively,
appear.
15.16. Interests of Directors and Other

Shareholders
for the Directors of Imperial Bank.
Directors Shareholding
63
Directors Name
Position
Date of Appointment
Percentage individual shareholding
Mr. Alnashir Popat
Chairman
24 December 1992
7.00%
24 December 1992
5.00%
Mr. Anwar Hajee
Non-Executive
15 November 1993
7.00%
Mr. Jinit Shah
Non-Executive
3 November 1997
2.50%
Non-Executive
3 November 1997
6.25%
Mr. Vishnu Dhutia
Non-Executive
15 February 1995
5.50%
Mr. Hanif Mohamed Amirali

Somji
Non-Executive
31 July 2002
5.60%
1st July 2014
Mr. Omurembe Iyadi
1st July 2014
1st February 2015


15.17. Voting Rights and Control
All shareholders have equal voting rights and no preferential
voting rights attach to any shares.
The list of the shareholders of the Issuer are provided in paragraph 12.7 of this Information Memorandum. ISL is the non-operating holding company of the Issuer effective 31st December
2014.
Prior to the enactment of the Finance Act, 2012 (Act No.57 of
2012), ownership of more than 25% of the share capital of any
licensed banking institution in Kenya was restricted to entities
that were either other licensed banking institutions, the government, state corporations, or foreign companies licensed to carry
out banking business in their country of incorporation.
None of the experts named in this information memorandum

has a direct or indirect interest in Imperial Bank
15.18. Changes in Senior Management

At the date of this Information Memorandum, the Issuer has no
planned changes in its Chief Executive or other senior management.
15.19. Material Contracts, Acquisitions and

Disposals
Imperial Bank Limited has not entered into any material contract within the two years preceding the date of this Information
Memorandum other than contracts entered into in the ordinary
course of business.
In recognition of the ambitious growth strategy of Kenyan indigenous banks, the Government of Kenya introduced amendments to the Banking Act through the Finance Act, 2012 (Act
ship of licensed banking institutions to be held by a non-operating holding company duly approved by the CBK.
Within its principal investments, the Issuer is evaluating opportunities in other countries within the East African region for business expansion and growth some of which may have trade relations with the East Africa Community countries such as Uganda,
Tanzania, Rwanda, Burundi, Democratic Republic of Congo, and
South Sudan.
ISL has been granted approval by the CBK as the non-operating

holding company of the Issuer.
In addition, the Issuer may pursue strategic partnerships with

other institutions to enable it serve its customers through a re-
As at the date of this Information Memorandum, there are no

arrangements known to the Issuer the operation of which may
result in change of control of the Issuer.
Information Memorandum.
There are no contractual arrangements with any controlling

shareholder which limit or impede on the ability of the Issuer to
carry its business independently of the controlling shareholder.
To the best knowledge of the directors of the Bank, with the
exception of ISL, there is no person interested in 15% or more
of Imperial Banks issued capital.
15.20. Related Party Financing

Imperial Bank has not provided any loans to its subsidiary in
Uganda. The following is a summary of the loans by the Issuer to
several of its directors and key management personnel:
Outstanding Loans and advances to Directors

Aggregate Amount (KShs 000)
As at January 2014
84,990
Advanced during the Year
2,097
Interest Charged
14,802
Repayments during the Year
(10,607)
Average interest rate
15%
At the end of the Year
91,282

64

The Issuer has provided loans to companies controlled by directors, common shareholders and their associates
as follows:
Outstanding loans and advances to Related Companies
As at January 2014
1,269,775
1,258,058
Interest Charged
152,463
(1,464,259)
18.17%
1,216,037
Outstanding loans and advances to Senior Management and other Employees

As at January 2014
354,147
269,892
Interest Charged
41,042
188,713
9.01%
476,368
These facilities have been made in the normal course of business

and on terms similar and applicable to those of third parties.
The Issuer has also made advances to its employees. All such advances are made subject to the applicable prohibitions on insider
lending in the Banking Act.
tions.
The auditors of the Issuer are currently PKF Kenya, who have
with International Financial Reporting Standards issued by the
-
65

working capital for its present requirements. The funding oboperations of the Issuers business. The Directors of the Issuer
the Issuer is in compliance with the liquidity ratios required
under the prudential guidelines issued by the CBK.
15.21. Accounts and Auditors
opinion thereon.
15.22. Working Capital and Liquidity
15.23. Directors Declaration

The Directors of the Issuer whose names appear on Section
2 of this Information Memorandum accept responsibility for
the information contained in this document. To the best of the
knowledge and belief of the Directors (who have taken all
reasonable care to ensure that such is the case), the information contained in this document is in accordance with facts
and does not omit anything likely to affect the import of such
information.

15.24. Minimum Subscription
NSE annual listing fees: The annual listing fees for Fixed Income Securities shall be based on the total value outstanding as at November 30th each year.
Fiscal Agent and Registrar annual fees: The Annual fees are
as agreed with the Issuer.
CDSC annual fees: The annual fees are chargeable at KShs

90 per transaction subject to a minimum of KShs 50,000
and a maximum of KShs 1,000,000. The fees are payable
quarterly in arrears.
For the issue to be successful, a minimum of 50% of the amount

issued must be raised.
15.25. Allotment of the Notes

The Notes shall be allotted at the sole discretion of the Arranger and Issuer. The Issuer reserves the right, whether the Issue is
over-subscribed or not, to reject any application in whole or in
part and may therefore allot less than the amount applied for.
Subject to the sole discretion above, allotment will be done on
the following basis:
In the event that the total number of Notes subscribed for by
applicants is equal to or less than the Issue Amount, all subscriptions will be allocated in full as per the number of Notes applied
for by applicants.
15.27. Circulation of Information

Memorandum
The Information Memorandum shall be circulated to prospective investors.
them and/or non-acceptance by no later than the allotment
15.28. Documents available for Inspection
15.26. Professional Fees and Related

Expenses
the information memorandum or as long as the Issue remains in

effect or Notes remain outstanding, copies of the following documents will, from the date of the Information Memorandum, be
Highlighted below are the expenses of the issue.

Professional fees and related expenses
Professional fees and related costs Rate
KShs*
Arrangement fees &

Placement Commission
1.10%
22,000,000
Legal fees
0.10%
2,000,000
Reporting Accountants fees
0.09%
1,800,000
Note Trustee
0.03%
500,000
Fiscal Agent and Registrar fees
0.03%
500,000
The Memorandum and Articles of Association of the

Issuer;
(ii)
Regulatory Fees
2011 and 2010;

(iii)
respect to the period ended 30th June 2015
(iv)
NSE Listing fees
0.01%
200,000
CMA Approval fees
0.10%
2,000,000
Total
1.45%
29,000,000
in Year 1, and does not include any annual costs, including but not
limited to:
(i)
statements of the Issuer;

(v) The Reporting Accountants report as reproduced
in this Information Memorandum and their written
consent to the issue of this Information Memorandum
with their report included herein in the form and context in which it is so included;
CMA annual fees: The annual fees for Fixed Income Securities shall be based on the total value outstanding as at
November 30th each year.

66

(vi) The legal opinion of the legal advisers to the Issuer
as reproduced in this Information Memorandum and
their written consent of to the issue of this Information
Memorandum with their legal opinions included herein
in the form and context in which they are so included;
(vii) Copies of the Trust Agreement, Issue Agreement and
the Agency Agreement;
(viii) A copy of this Information Memorandum;
(ix) The approvals of the CMA and the NSE in respect of
the Issue; and
(x) A copy of the letter of no objection from the CBK.
Please also note that the Bank has no property and as such,
movable and immovable property and items of a similar nature
is not applicable.
Copies of this Information Memorandum, and the Agency Agreement have been submitted to the CMA.
67

16. Legal Opinion
12th August 2015

The Directors
Imperial Court,
Westlands Road,
P.O. Box 44905-00100
NAIROBI
Dear Sirs
RE: IMPERIAL BANK LIMITED-CORPORATE BOND ISSUE OF KSHS. 2,000,000,000 (THE BOND ISSUE)
We have acted as legal advisors to Imperial Bank Limited (the Company) in relation to the Bond Issue as set out in the Information
Memorandum dated 12th August 2015 (the Information Memorandum).
Kenya, and to advice on the laws of Kenya.
Company in relation to the Bond Issue bear the same meaning in this Opinion.

68
16. Legal Opinion

1. DOCUMENTS
to our satisfaction of the following documents:
1.1
its memorandum and articles of association in force as at the
date of the Information Memorandum;
1.2 a resolution of the Board of the Company in a meeting
held on 30th March 2015 approving the Bond Issue;
1.3 a special resolution of the shareholders of the Com pany in an Extraordinary General Meeting dated 10th July
2015 approving the Bond Issue and authorizing the borrowing
of Kshs. 2,000,000,000/- by the Company by way of the Bond
Issue in accordance with the requirement of Article 79 of the
Companys articles of association;
1.4 a letter of No Objection dated 9th June 2015 from
the Central Bank of Kenya approving the Bond Issue;
1.5 a letter dated 12th August 2015 from the Capital Markets Authority (CMA) approving the Bond Issue in the manner prescribed under the Information Memorandum;
1.6 a letter dated 17th August 2015 from the Nairobi Se curities Exchange (NSE) approving the Bond Issue;
1.7 the Information Memorandum, the Agency Agreement
and the Trust Deed (together the Issue Documents); and
1.8 such other records and documents as we have consid ered necessary and appropriate for the purposes of this Opinion.
2. ASSUMPTIONS
For the purposes of this opinion, we have assumed:
2.1 Accuracy of information supplied
All written information supplied to us by the Company and by
All agreements and other relevant documents have been duly

authorised, executed and delivered by the parties to those documents other than the Company.
2.5 Factual matters
With respect to matters of fact, we have relied on the rep-
3. OPINIONS
In our opinion, based on the information made available to us by
the Company and subject to (i) the foregoing; (ii) Section 5 of
this Opinion; (iii) any matters set out in the Information Memorandum; (iv) the reservations set out below; and (v) any matters
not disclosed to us:
3.1 the Company is a public company limited by shares,
duly incorporated in Kenya pursuant to the provisions of the
Companies Act (Chapter 486 of the Laws of Kenya), with power
to execute, deliver and exercise its rights and perform its obligations pursuant to the Bond Issue, and such execution, delivery
and performance have been duly authorised by appropriate corporate action;
3.2 all rights and obligations of the Company contemplated
by the Bond Issue constitute valid and binding rights and obligations enforceable according to their terms;
3.3 the existing share capital of the Company has been authorized and issued in conformity with all applicable laws and has
received all necessary authorizations;
3.4 the transactions contemplated by the Bond Issue and
the performance by the Company of its obligations thereunder
will not violate any laws of Kenya;
3.5 all authorisations, approvals, consents, licences, exemptions,
lic bodies or authorities of or in Kenya required in connection
with the Bond Issue have been obtained in proper form and are
in full force and effect;
3.6 the Company continues to maintain its statutory books
2.2 Authenticity of copies

The authenticity of documents submitted as originals, the conformity with the original documents of all documents submitted as copies and the authenticity of the originals of such latter
documents.
3.7 With regard to premises occupied by the Company

under lease, the Company has entered into valid lease and/or
licence agreements with the counterparties.The Company owns
no immoveable properties;
2.3 Signatures
3.8 save for the matters referred to in Section 14.6 of the

Information Memorandum, and to the best of our knowledge
there is no other material litigation or arbitration, prosecution or
other civil or criminal legal action in which the Company or any
of its Directors are involved; and
The genuineness of all signatures on all documents.

2.4 Due execution by other parties
69

16. Legal Opinion

3.9 to the best of our knowledge, there are no other material items not mentioned in the Information Memorandum of
which we are aware with regard to the legal status of the Company and the Bond Issue.
4. FURTHER OPINIONS
Based upon and subject as aforesaid, and without prejudice to the
generality of the foregoing, we are also of the opinion that:
4.1 the Information Memorandum has been dated in accordance with section 43(4) of the Companies Act;
4.2 a copy of the Information Memorandum, together with
the documents required under Section 43 of the Companies Act,
have been delivered to the Registrar of Companies for registration in accordance with section 43(1) of the Companies Act, duly
signed by every person named in the Information Memorandum
as a director of the Bank or by his agent duly authorized in writing,
and a statement to such effect appears on the face of the Information Memorandum in accordance with section 43 (3) of the
Companies Act;
4.3 the Information Memorandum contains statements
ourselves, all of whom are experts for the purposes of Section
42(1) of the Companies Act. In accordance with Section 42(1) of
the Companies Act, PKF Kenya and we have given, and have not
prior to the date of this Information Memorandum withdrawn
our consent to the issue of the Information Memorandum with
the statements by us included in the form and context in which
they are included;
4.4 application has been duly made to, and permission duly
granted by, the CMA in respect of the Bond Issue pursuant to the
Capital Markets (Securities) (Public Offers, Listing and Disclosure)
Regulations 2002 and the Third Schedule thereto;
4.5 in addition to the information required to be included
by the Companies Act, the Information Memorandum includes
such information as investors would reasonably require and reaformed assessment of:-
(a)
losses, and prospects of the Company; and
(b) the rights attaching to the Bond Issue.
Based on the foregoing, we are of the opinion that the Bond
Issue is in conformity with all applicable laws and has received all
necessary authorisations.
5. QUALIFICATIONS
5.1 Default interest
Any provision requiring any party to pay default interest may
be unenforceable in the Kenyan courts on the grounds (i)
that such default interest would constitute a penalty and (ii)
that penalties are not generally enforceable under common
law. We however consider it likely that the Kenyan courts
would now follow the decision by the High Court in England
in Lordsvale Finance plc v. Bank of Zambia [1996] Q.B. 752,
permitting recovery by a creditor of default interest, such decision being of persuasive value in Kenya.
5.2 Severance may be restricted
If any provision of the Issue Documents is held to be illegal,
invalid or unenforceable by the Kenyan courts, severance of
such provision from the remaining provisions of the document
would be subject to the exercise of the discretion of the Kenyan courts
5.3 Exercise of discretion
If any party is vested with any discretion or may determine a
matter in its opinion, the Kenyan courts may require that such
discretion be exercised reasonably or that such opinion be
based on reasonable grounds.
5.4 Costs not necessarily fully recoverable
A Kenyan court may refuse to give effect to a provision to pay
the costs of another party in respect of any successful action
brought against that party before a Kenyan court and the Kenyan court may not award by way of costs all of the expenditure incurred by a successful litigant in proceedings brought
before that court.
5.5 Service of process
Service of legal process by post in connection with any proceedings in the Kenyan courts would be effective only if made
in accordance with the applicable court rules or with the leave
of the court.
6. RESERVATIONS
This letter and the opinions given in it are governed by the
laws of Kenya and relate only to Kenyan law as applied by the
Kenyan courts as at todays date. We express no opinion in
this letter on the laws of any other jurisdiction.
Yours faithfully,
HAMILTON HARRISON & MATHEWS

70
17. Reporting Accountants Report

The Board of Directors
P.O Box 44905, 00100 NAIROBI
12 August 2015
Reporting Accountants Report Imperial Bank Limited

Introduction
We submit our Accountants report in accordance with Section 19 of the Third Schedule of the Companies Act Cap 486
and Part C of the Third Schedule of the Capital Markets (Securities) (Public Offers, Listing and Disclosures) Regulations,
2002 (the Regulations").
Responsibility of the directors

The directors of Imperial Bank Limited (the Bank) are responsible for the preparation of the Information Memorandum
and all the information contained therein and for the financial statements to which this Accountants Report relates.
Our responsibility and procedures applied

Our responsibility is to review the consolidated financial statements of the Bank and its subsidiaries (collectively referred
to as the Group) for the five years ended 31 December 2014 (collectively referred to as the Financial Information)
based on the audited financial statements for the respective periods under the requirements of International Standard on
Review. Engagements 2400 Engagements to Review Financial Statements (ISRE 2400). The objective of the engagement was to enable us to state whether, on the basis of our review procedures which do not provide all the evidence that
would be required in an audit, anything has come to our attention that causes us to believe that the financial statements
were not prepared, in all material respects, in accordance with International Financial Reporting Standards.
The financial information set out in this report has been compiled in accordance with the International Standard on Related
Services 4410 Engagements to Compile Financial Statements (ISRS 4410).
In meeting the requirements above, we:
Reviewed the financial statements of the Group included in the Accountants Report for each of the five years ended
31 December 2014 for compliance with International Financial Reporting Standards (IFRS) and consistency of applica
tion of accounting policies;
Made enquiries as required by ISRE 4410 of management about the operations of the Group, its accounting principles
and practices and other significant matters relevant to the Financial Information and have applied that knowledge in
compiling the financial statements. We have also applied knowledge obtained from carrying out review procedures on
the financial statements;
Reviewed the rest of the Information Memorandum document for consistency with the Financial Information included
in our Accountants Report;
Reviewed eligibility ratios included in the Accountants Report on page 182 to ensure they have been correctly
computed based on the audited and unaudited financial statements for the respective periods; and
Reviewed the Directors assumptions with regard to the prospective financial information included in the Accountants
Report on page 178 in accordance with International Standard on Assurance Engagements 3400 The
Examination of Prospective Financial Information (ISAE 3400).

71 Imperial
17. Reporting Accountants Report

The objective of the examination of prospective financial information under ISAE 3400 is to enable us obtain sufficient
appropriate evidence as to whether Directors assumptions on which the prospective financial information is based are not
unreasonable and that the prospective financial information is properly prepared on the basis of the assumptions and are
consistent with historical financial statements.
PKF Kenya were the auditor of the Group for the years ended 31 December 2010 to 31 December 2014. For each of
these years, unqualified audit reports were issued.
The financial statements have been prepared on the basis of the accounting policies set out on pages 89 to 98 of the
Accountants Report. For all accounting periods dealt with in this report, the financial statements have, in all material
respects, been prepared in accordance with International Financial Reporting Standards. Where necessary, the financial
statements for the years ended 31 December 2013, 2012, 2011 and 2010 have been presented to reflect the accounting
policies of the Group as applied in the financial statements for the year ending 31 December 2014. There were no restatements that were made to the audited financial statements for each of the years other than updated disclosures and presentation.
Review Opinion
A review carried out in accordance with ISRE 2400 as well as a compilation under ISRS 4410 substantially less in scope
than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to
obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion. However, based on our review, nothing has come to our attention that causes us to
believe that the accompanying audited financial statements of the Group for each of the five years ended 31 December
2014 do not give a true and fair view, for the purposes of the Information Memorandum, in accordance with International
Financial Reporting Standards.
We have reviewed the Capital Market Authoritys eligibility ratios set out in the Accountants Report on page 182 and
confirm that these ratios are based on the audited financial statements of the respective years presented.
In respect of the prospective financial information contained in the Accountants Report on page 178 to
181, based on our examination and the evidence supporting the assumptions, nothing has come to our attention which
causes us to believe that these assumptions do not provide a reasonable basis for the prospective financial information. In
our opinion, the prospective financial information is properly prepared on the basis of the assumptions. Actual results may
be different from the prospective financial information since anticipated events may not occur as expected and the variation may be material.
We consent to the inclusion of this report in the Imperial Bank Limited Information Memorandum to be issued in the form
and context in which it appears.
Certified Public Accountants NAIROBI
The engagement partner responsible for the accountants report is

CPA Chaudhry Mohamed Asif - P/No. 2059.
12th August 2015

72
Financial Statements
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
Notes
2014
Shs'000
2013
Shs'000
2012
Shs'000
2011
Shs'000
2010
Shs'000
Interest income
7,594,089
7,667,337
6,906,700
4,406,808
2,788,222
Interest expense
(2,905,730)
(3,198,128)
(3,841,887)
(1,784,940)
(922,797)
4,688,359
4,469,209
3,064,813
2,621,868
1,865,425
Fees and commission income
756,937
600,173
649,433
486,337
341,858
Foreign exchange trading income
380,713
362,311
327,543
300,876
168,102
185,907
204,311
168,593
103,456
351,004
6,011,916
5,636,004
4,210,382
3,512,537
2,726,389
NET INTEREST INCOME
Other income
OPERATING INCOME
Net increase in impairment losses
on loans and advances
(242,191)
(263,863)
(156,636)
(103,013)
(126,303)
Other operating expenses
(3,159,892)
(2,970,301)
(2,219,822)
(1,914,781)
(1,367,668)
2,609,833
2,401,840
1,833,924
1,494,743
1,232,418
(592,370)
2,017,463
(611,382)
1,790,458
(491,570)
1,342,354
(381,901)
1,112,842
(347,172)
885,246
Equity holders of the Bank

Non-controlling interest
2,036,933
(19,470)
1,813,648
(23,190)
1,364,247
(21,893)
1,143,700
(30,858)
885,246
-
PROFIT FOR THE YEAR
2,017,463
1,790,458
1,342,354
1,112,842
885,246
1,616
1,434
1,075
891
786
9
9
200,000
200,000
400,000
300,000
700,000
250,000
200,000
450,000
225,000
200,000
425,000
200,000
150,000
350,000
160.21
320.41
200.25
180.23
184.33
160.21
240.31
560.72
160.20
360.45
160.20
340.43
120.15
304.48
PROFIT BEFORE TAX

Tax charge
PROFIT FOR THE YEAR
Profit attributed to:
EARNINGS PER SHARE

Basic and diluted (Shs. per share)
DIVIDEND
Interim dividend for the year (Shs.'000)
Proposed final dividend for the year (Shs.'000)
Total dividend for the year
DIVIDEND PER SHARE
Interim dividend paid (Shs. Per share)
Proposed final dividend (Shs. Per share)
Total dividend per share (Shs. Per share)

74
CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME
2014
Shs'000
2013
Shs'000
2012
Shs'000
2011
Shs'000
2010
Shs'000
2,017,463
1,790,458
1,342,354
1,112,842
885,246
(40,322)
63,141
(37,783)
3,136
Recycling of prior year gain/(loss) in fair value of

government securities
34,781
(121,124)
(63,599)
Fair value gain/(loss) on government securities

classified as 'available-for-sale'
186,180
(89,691)
(119,044)
(34,781)
121,214
2,163,321
1,763,908
1,220,308
960,073
942,771

2,199,187
(35,866)
1,764,656
(748)
1,256,062
(35,754)
989,786
(29,713)
942,771
-
Total comprehensive income for the year
2,163,321
1,763,908
1,220,308
960,073
942,771
Profit for the year

Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss:
Currency translation on foreign subsidiary

Total comprehensive income for the
year attributed to:

75 Imperial
BANK STATEMENT OF PROFIT OR LOSS
Notes
2014
Shs'000
2013
Shs'000
2012
Shs'000
2011
Shs'000
2010
Shs'000
Interest income
6,833,677
7,096,196
6,518,620
4,300,331
2,788,222
Interest expense
(2,497,176)
(2,929,119)
(3,632,814)
(1,757,700)
(922,797)
4,336,499
4,167,077
2,885,806
2,542,631
1,865,425
644,459
543,925
619,869
478,530
341,858
322,092
314,222
300,170
294,907
168,102
173,880
178,064
149,358
93,705
351,004
5,476,930
5,203,288
3,955,203
3,409,773
2,726,389
NET INTEREST INCOME
Other income
OPERATING INCOME
(178,954)
(191,327)
(136,518)
(94,771)
(126,303)
(2,609,391)
(2,518,207)
(1,906,237)
(1,683,311)
(1,367,668)
2,688,585
2,493,754
1,912,448
1,631,691
1,232,418
(624,094)
2,064,491
(639,760)
1,853,994
(509,146)
1,403,302
(434,308)
1,197,383
(347,172)
885,246
1,654
1,485
1,124
959
786
9
9
200,000
-
400,000
300,000
250,000
200,000
225,000
200,000
200,000
150,000
200,000
700,000
450,000
425,000
350,000
PROFIT BEFORE TAX

Tax charge
PROFIT FOR THE YEAR
EARNINGS PER SHARE
DIVIDEND
Interim dividend for the year (Shs.'000)
Proposed final dividend for the year (Shs.'000)
Total dividend for the year
DIVIDEND PER SHARE
Interim dividend paid (Shs. Per share)
160.21
320.41
200.25
180.23
184.33
Proposed final dividend (Shs. Per share)
240.31
160.20
160.20
120.15
160.21
560.72
360.45
340.43
304.48
Total dividend per share (Shs. Per share)

76
BANK STATEMENT OF OTHER COMPREHENSIVE INCOME
2014
Shs'000
2013
Shs'000
2012
Shs'000
2011
Shs'000
2010
Shs'000
2,064.491
1,853,994
1,403,302
1,197,383
885,246
Recycling of prior year gain/(loss) in fair value of

government securities
34,781
(121,124)
(63,599)
Fair value gain/(loss) on government securities

classified as 'available-for-sale'
186,180
(89,691)
119,044
(34,781)
121,214
2,250,671
1,764,303
1,319,039
1,041,478
942,771
Profit for the year

Other comprehensive income:
Items that may be reclassified subsequently
to profit or loss:

77 Imperial
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
ASSETS
Cash in hand
Balances with Central Banks
Government securities
Placements with and loans and
advances to other banking institutions
Other assets
Loans and advances to customers
Property and equipment
Capital work in progress
Intangible assets
Deferred tax
Tax recoverable
2014
Shs'000
2013
Shs'000
2012
Shs'000
2011
Shs'000
2010
Shs'000
24
10
11
537,462
6,743,386
16,277,859
570,369
1,907,121
11,306,654
606,489
2,166,922
8,576,465
302,343
1,641,770
6,438,084
581,573
1,075,769
5,491,498
12
13
14
16
17
18
19
2,803,805
755,856
36,071,211
656,934
10,841
283,708
335,377
100,225
3,956,718
567,043
29,855,224
680,689
5,675
184,270
273,262
-
3,900,728
366,148
21,292,362
482,557
268,551
180,514
207,874
-
2,052,164
347,353
15,659,319
409,931
116,121
126,977
184,123
-
657,911
249,852
11,152,828
246,790
87,456
98,522
-
64,576,664
49,307,025
38,048,610
27,278,183
19,642,199
54,234,728
1,902,468
632,492
-
39,644,528
2,619,051
923,750
103,141
30,703,750
2,049,083
528,957
1,760
20,598,239
2,365,165
416,466
61,816
13,678,340
2,161,024
423,830
91,123
56,769,688
43,290,470
33,283,550
23,441,685
16,354,317
1,248,400
5,910,244
187,166
25,000
(26,039)
(22,555)
1,248,400
4,057,024
192,555
300,000
277
(208,735)
1,248,400
3,031,457
103,671
200,000
(39,619)
(119,044)
1,248,400
2,148,888
71,993
200,000
(15,697)
(34,781)
1,248,400
1,465,054
37,127
150,000
5,463
121,124
7,322,216
5,589,521
4,424,865
3,618,803
3,027,168
484,760
427,034
340,195
217,694
260,714
7,806,976
6,016,555
4,765,060
3,836,497
3,287,882
64,576,664
49,307,025
38,048,610
27,278,183
19,642,199
Notes
TOTAL ASSETS
LIABILITIES
Customer deposits
Deposits from other banking institutions
Other liabilities
Current tax
20
21
22
TOTAL LIABILITIES
SHAREHOLDERS' EQUITY
Share capital
Retained earnings
Statutory loan loss reserve
Proposed dividend
Translation reserve
Fair value reserve
TOTAL SHAREHOLDERS' EQUITY
ATTRIBUTABLE TO OWNERS
TOTAL LIABILITIES AND
As at 31 December
23

78
BANK STATEMENT OF FINANCIAL POSITION
ASSETS
Cash in hand
Balances with Central Bank of Kenya
Placements with and loans and
advances to other banking institutions
Other assets
Investment in subsidiary
Intangible assets
Deferred tax
Tax recoverable
2014
Shs'000
2013
Shs'000
2012
Shs'000
2011
Shs'000
2010
Shs'000
24
10
11
455,056
6,017,704
15,216,083
497,261
1,420,337
10,949,688
545,639
1,829,284
8,333,705
257,140
1,640,266
5,951,589
581,573
833,805
4,979,855
12
13
14
15
16
17
18
19
1,438,017
555,490
30,997,839
858,174
512,577
10,841
245,254
192,104
100,225
1,774,565
447,319
26,171,720
871,972
548,290
5,675
143,393
176,008
-
2,859,867
345,108
19,038,319
721,250
363,092
268,551
142,132
142,662
-
1,479,887
325,154
14,903,789
448,109
277,923
116,121
83,979
133,659
-
643,625
249,852
11,152,828
448,109
246,790
87,456
98,522
-
56,599,364
43,006,228
34,589,609
25,617,616
19,322,415
47,147,812
1,525,379
431,932
34,064,967
2,568,824
550,726
103,141
27,581,361
2,013,986
438,235
1,760
19,244,702
2,216,197
409,673
61,816
13,678,340
2,161,024
373,178
91,123
49,105,123
37,287,658
30,035,342
21,932,388
16,303,665
1,248,400
6,173,530
69,866
25,000
(22,555)
1,248,400
4,286,894
92,011
300,000
(208,735)
11,248,400
3,121,240
103,671
200,000
(119,044)
1,248,400
2,199,616
71,993
200,000
(34,781)
1,248,400
1,462,099
37,127
150,000
121,124
7,494,241
5,718,570
4,554,267
3,685,228
3,018,750
56,599,364
43,006,228
34,589,609
25,617,616
19,322,415
Notes
TOTAL ASSETS
LIABILITIES
Customer deposits
Other liabilities
Current tax
20
21
22
TOTAL LIABILITIES
Share capital
Retained earnings
Proposed dividend
Fair value reserve
TOTAL LIABILITIES AND

79 Imperial
As at 31 December
23
At end of year
Increase due to change in shareholding of non

controlling interest
Increase in share capital
Dividends:
- 2013 dividend paid during the year
- 2014 interim dividend declared during the year
- 2014 interim dividend paid during the year
Transactions with owners:

- Profit for the year
- Fair value on government securities
classified as available for sale
- Currency translation
Decrease in statutory loan loss reserve - Kenya
Decrease in statutory loan loss reserve - Uganda
Transfer of non controlling interest portion of
loan loss reserve
Adjustment arising from change in

non controlling interests
At start of year
Year ended 31 December 2014
9
9
9
Note
1,248,400
(22,145)
41,836
922
22,145
(24,516)
187,166
(200,000)
5,910,244
(17,320)
(7,760)
192,555
Statutory
loan loss
reserves
Shs'000
2,036,931
17,738
4,057,024
Retained
earnings
Shs'000
1,248,400
Share
capital
Shs'000
25,000
(300,000)
200,000
(175,000)
300,000
Dividends
Shs'000
(22,555)
186,180
-
(208,735)
Fair value
reserves
Shs'000
(26,039)
(24,848)
-
(1,468)
277
Translation
reserves
Shs'000
484,760
65,840
36,262
(17,320)
(16,396)
(17,320)
(19,470)
(8,510)
427,034
Noncontrolling
interests
Shs'000
7,806,976
(300,000)
(175,000)
65,840
36,262
186,80
(140,322)
-
2,017,461
6,016,555
Total
Shs'000
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

80

81 Imperial
At end of year

Dividends:
- 2013 final dividend proposed

Decrease in statutory loan loss reserve - Kenya
Decrease in statutory loan loss reserve - Uganda
Transfer of non controlling interest portion of
loan loss reserve
At start of year
9
9
9
9
Note
57,793
-
(57,793)
87,587
(200,000)
(400,000)
6,016,555
87,587
427,034
277
(208,735)
(200,000)
400,000
(400,000)
300,000
300,000
192,555
(400,000)
(300,000)
4,057,024
1,248,400
(89,691)
63,141
22,442
(57,793)
39,896
(89,691)
-
803
11,660
(100,544)
(11,660)
158,337
4,765,060
1,790,458
340,195
(23,190)
(36,619)
Total
Shs'000
(119,044)
Noncontrolling
interests
Shs'000
200,000
Fair value Translation

reserves
reserves
Shs'000
Shs'000
103,671
Statutory
loan loss
reserves Dividends
Shs'000
Shs'000
1,813,648
3,031,457
Retained
earnings
Shs'000
1,248,400
Share
capital
Shs'000
At end of year

Increase in statutory loan loss reserve
Dividends:
At start of year
At end of year

Dividends:
At start of year
9
9
9
9
Note
9
9
9
9
Note
(36,457)
(150,000)
(225,000)
.
3,836,497
(13,307)
.
217,694
(23,150)
.
.(15,697)
(34,781)
(150,000)
225,000
(225,000)
200,000
200,000
34,866
.
71,993
(34,866)
(225,000)
(200,000)
.
2,148,888
.
.1,248,400
1,112,882
(152,769)
3,287,882
(30,858)
1,145
260,714
1,991
5,463
(155,905)
121,124
-
150,000
37,127
1,143,700
-
1,465,054
Total
Shs'000
1,248,400
Dividends
Shs'000
Statutory
loan loss
reserves
Shs'000
Retained
earnings
Shs'000
Share
capital
Shs'000
Noncontrolling
interests
Shs'000
200,000
103,671
1,248,400
Fair value Translation

reserves
reserves
Shs'000
Shs'000
(200,000)
.
(250,000)
.
.
340,195 47,765,060
.
(39,619)
.
(119,044)
(200,000)
250,000
(250,000)
200,000
(250,000)
(200,000)
.
3,031,457
(122,046)
158,255
-
(13,861)
158,255)
-
(23,922)
-
(84,263)
-
31,678
(31,678)
1,342,354
3,836,497
(21,893)
217,694
Total
Shs'000
(15,697)
Noncontrolling
interests
Shs'000
(34,781)
Translation
reserves
Shs'000
200,000
Dividends
Shs'000
Fair value
reserves
Shs'000
71,993
Statutory
loan loss
reserves
Shs'000
1,364,247
2,148,888
Retained
earnings
Shs'000
1,248,400
Share
capital
Shs'000

82

83 Imperial
At end of year
At start of year
Issue of of ordinary shares:
-Cash
-Bonus issue
Minority interest investment in subsidiary
Dividends:
(14,585)
(43,400)
(200,000)
(150,000)
120,000
43,400
-
24
24
9
9
9
9
1,465,054
885,246
1,248,400
987,793
Retained
earnings
Shs'000
1,085,000
Note
Share
capital
Shs'000
2,183,934
885,246
57,525
120,000
266,177
(25,000)
(200,000)
3,287,882
260,714
260,714
5,463
5,463
57,525
121,124
(25,000)
200,000
(200,000)
150,000
150,000
14,585
37,127
Total
Shs'000
63,599
NonTranslation controlling
interests
reserves
Shs'000
Shs'000
25,000
Dividends
Shs'000
Fair value
reserves
Shs'000
22,542
Statutory
loan loss
reserves
Shs'000
At end of year
Dividends:

Decrease in statutory loan loss reserve
At start of year
At end of year
Dividends:

Decrease in statutory loan loss reserve
At start of year
9
9
9
9
Note
9
9
9
Note
.
1,248,400
4,286,894
(400,000)
(300,000)
11,660
1,853,994
3,121,240
92,011
(11,660)
103,671
Statutory
loan loss
reserves
Shs'000
Retained
earnings
Shs'000
Share
capital
Shs'000
1,248,400
69,866
6,173,530
(22,145)
92,011
Statutory
loan loss
reserves
Shs'000
1,248,400
(200,000)
-
22,145
2,064,491
4,286,894
Retained
earnings
Shs'000
1,248,400
Share
capital
Shs'000
Dividends
Shs'000
300,000
(300,000)
400,000
(400,000)
300,000
200,000
(300,000)
200,000
(175,000)
.
25,000
300,000
Dividends
Shs'000
(208,735)
(89,691)
-
(119,044)
Fair value
reserves
Shs'000
.
(22,555)
186,180
-
208,735
Fair value
reserves
Shs'000
5,718,570
(300,000)
(400,000)
-
1,853,994
.
(89,691)
-
4,554,267
Total
Shs'000
7494,241
.
(300,000)
(175,000)
186,180
-
2,064,491
5,718,570
Total
Shs'000
BANK STATEMENT OF CHANGES IN EQUITY

84

85 Imperial
At end of year

Dividends:
At start of year
At end of year

Dividends:
At start of year
9
9
9
9
Note
9
9
9
9
Note
(150,000)
225,000
(225,000)
200,000
.
71,993
(225,000)
(200,000)
.
1,248,400
200,000
34,866
(34,866)
-
2,199,616
1,197,383
150,000
1,462,099
37,127
Dividends
Shs'000
Statutory
loan loss
reserves
Shs'000
Retained
earnings
Shs'000
Share
capital
Shs'000
1,248,400
4,544,267
(119,044)
200,000
103,671
3,121,240
1,248,400
(200,000)
(250,000)
-
(200,000)
250,000
(250,000)
200,000
(250,000)
250,000
.
(34,781)
(155,905)
-
121,124
3,685,228
(150,000)
(225,000)
-
(155,905)
-
1,197,383
3,018.750
Total
Equity
Shs'000
(84,263)
-
(84,263)
-
31,678
(31,678)
Fair value
reserves
Shs'000
1,403,302
3,685,228
(34,781)
Total
equity
Shs'000
200,000
Fair value
reserves
Shs'000
71,993
Statutory
loan loss
reserves Dividends
Shs'000
Shs'000
1,403,302
2,199,616
Retained
earnings
Shs'000
1,248,400
Share
capital
Shs'000
At end of year
At start of year
Issues of ordinary shares:
-Cash
-Bonus issue
Dividends:
1,248,400
9
9
9
9
(14,585)
1,462,099
(200,000)
(150,000)
(43,400)
885,246
120,000
43,400
984,838
Retained
earnings
Shs'000
1,085,000
24
24
Note
Share
capital
Shs'000
37,127
14,585
22,542
Statutory
loan loss
reserves
Shs'000
150,000
(25,000)
200,000
(200,000)
150,000
121,124
57,525
-
63,599
Fair value
reserves
Shs'000
25,000
Dividends
Shs'000
3,018,750
(25,000)
(200,000)
-
57,525
120,000
-
885,246
2,180,979
Total
Shs'000

86
CONSOLIDATED STATEMENT OF CASH FLOWS
2014
Shs'000
2013
Shs'000
2012
Shs'000
2011
Shs'000
2010
Shs'000
7,482,280
(2,720,919)
1,360,057
(2,901,688)
(843,556)
7,465,467
(3,080,971)
1,165,745
(2,616,516)
(571,724)
6,797,377
(4,005,098)
1,140,717
(2,054,463)
(578,205)
4,773,285
(1,715,995)
891,947
(1,700,094)
(498,752)
3,149,618
(998,111)
591,970
(1,209,138)
(297,246)
2,376,174
2,362,001
1,300,328
1,750,391
1,237,093
(6,588,310)
(4,178,546)
14,661,763
(345,981)
(8,468,945)
(102,948)
8,598,994
241,239
(5,680,366)
(485,623)
10,268,722
131,915
(4,567,785)
(377,099)
6,850,955
(46,505)
(1,791,346)
(245,042)
1,483,747
140,652
5,925,100
2,630,341
5,534,986
3,609,957
825,104
(197,252)
16
(141,221)
18
(5,029,017)
11
(5,166)
17
825
.
(5,371,831)
(103,165)
(32,132)
(2,148,543)
(41,974)
7,507
(232,592)
(81,054)
(2,426,955)
(152,430)
7,550
(310,110)
(58,724)
(2,646,518)
(116,121)
383
(108,947)
(48,583)
(1,792,127)
9,547
(2,318,307)
(2,885,481)
(3,131,090)
(1,940,110)
Cash flows (used in) financing activities

Minority interest
Issue of shares to minority interest
Dividend paid
36,267
(475,000)
87,587
(600,000)
158,255
(450,000)
(375,000)
260,714
120,000
(225,000)
NET CASH (USED IN) FINANCING ACTIVITIES
(438,733)
(512,413)
(291,745)
(375,000)
(155,714)
24
3,254,121
114,536
(64,557)
3,349,513
(200,379)
104,987
1,0269,708
2,357,760
(34,956)
955,586
103,867
(32,745)
1,909,415
(959,292)
5,463
24
3,304,100
3,254,121
3,349,513
1,026,708
955,586
Notes
CASH FLOWS FROM OPERATING ACTIVITIES
Interest receipts
Interest payments
Fees and commission receipts
Payments to employees and suppliers
Tax paid
Cash flows from operating activities before changes
in operating assets and liabilities
Changes in operating assets and liabilities:
- loans and advances
- other assets
- customer deposits
- other liabilities
Net cash from operating activities
Cash flows (used in) investing activities
Purchase of property and equipment
Purchase of intangible assets
Purchase of government securities
Investment in capital work in progress
Proceeds from disposal of property and equipment
NET CASH (USED IN) INVESTING ACTIVITIES
Movement in cash and cash equivalents

At start of year
Increase/(decrease)
Translation reserve
At end of year

87 Imperial
BANK STATEMENT OF CASH FLOWS
Notes
2014
Shs'000
2013
Shs'000
2012
Shs'000
2011
Shs'000
2010
Shs'000
6,714,106
(2,337,782)
1,139,859
(2,400,795)
(843,556)
6,924,457
(2,853,026)
1,035,161
(2,237,544)
(571,724)
6,444,334
(3,537,943)
1,064,664
(1,784,335)
(578,205)
4,666,807
(1,688,755)
865,864
(1,505,485)
(498,752)
3,149,6118
(998,111)
591,970
(1,209,138)
(297,246)
2,271,832
2,297,324
1,608,515
1,839,679
1,237,093
(5,005,073)
(4,090,713)
12,923,449
(52,658)
(7,157,114)
(38,493)
6,407,513
26,460
(4,199,292)
(486,782)
8,241,788
49,828
(3,804,013)
(345,232)
5,497,417
(12,315)
(1,791,346)
(245,042)
1,483,747
(87,045)
6,046,837
1,535,690
5,214,057
3,175,536
771,497
(136,854)
(137,890)
(4,484,172)
(5,166)
(52,338)
572
(56,308)
(26,390)
(2,101,548)
(41,974)
(150,722)
7,507
(102,838)
(80,643)
(2,373,753)
(256,329)
(273,141)
5,624
(145,725)
(10,948)
(2,645,932)
(116,121)
1,278
(108,947)
(48,583)
(1,613,895)
(448,109)
9,547
(4,815,848)
(2,369,435)
(3,081,081)
(2,917,448)
(2,209,987)
Cash flows (used in) financing activities

Dividend paid
Proceeds from issue of ordinary shares
(475,000)
-
(600,000)
-
(450,000)
-
(375,000)
-
(225,000)
120,000
(475,000)
(600.000)
(450,000)
(375,000)
(105,000)
Interest receipts
Interest payments
Tax paid
Cash flows from operating activities before changes
in operating assets and liabilities
- other assets
- customer deposits
- other liabilities
Cash flows (used in) investing activities
16
18
11
17

At start of year
Increase/(decrease)
24
498,244
755,989
1,931,989
(1,433,745)
249,013
1,682,976
365,925
(116,912)
1,909,415
(1,543,490)
At end of year
24
1,254,233
498,244
1,931,989
249,013
365,925

88
NOTES
SIGNIFICANT ACCOUNTING POLICIES
Imperial Bank Limited and its subsidiary (together, the 'Group')
provide banking, financial, and related services in Kenya and
Uganda.
Imperial Bank Limited is incorporated in Kenya under the Companies Act as a private limited company and is domiciled in Kenya.
The bank offers banking, financial and related services and is
licensed under the Banking Act. The Bank has a 58.6% (2013:
63.5%) investment in Imperial Bank (Uganda) Limited, a bank
incorporated as a private limited liability company, domiciled in
Uganda and licensed under the Financial Institutions Act, 2004 of
Uganda.
The bank operated twenty five branches within Kenya including a
credit card division and five branches in Uganda as at 31 December 2014.
SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES
The principal accounting policies adopted in the preparation of
these financial statements are set out below. These policies have
been consistently applied to all the years presented, unless otherwise stated.
(a) Basis of preparation

The financial statements have been prepared under the historical
cost convention, except as indicated otherwise below and are in
accordance with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board
(IASB). The historical cost convention is generally based on the
fair value of the consideration given in exchange of assets. Fair
value is the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market
participants at the measurement date, regardless of whether that
price is directly observable or estimated using another valuation
technique. In estimating the fair value of an asset or liability, the
Bank takes into account the characteristics of the asset or liability
if market participants would take those characteristics into when
pricing the asset or liability at the measurement date. Fair value
for measurement and/or disclosure purposes in these financial
statements is determined on such a basis.
In addition, for financial reporting purposes, fair value measurements are categorised into level 1, 2 or 3 based on the degree to
which the inputs to the fair value measurements are observable
and the significance of the inputs to the fair value measurement in
its entirety, which are described as follows:

89 Imperial
LEVEL1 inputs are quoted prices (unadjusted) in active markets

for identical assets or liabilities that the entity can access
at the measurement date;
LEVEL 2 inputs are inputs, other than quoted prices included
within Level 1, that are observable for the asset or liability,
either directly or indirectly; and
LEVEL 3 inputs are unobservable inputs for the asset or liability.
Going concern
The financial performance of the Group and Bank is set out in the
statements of profit or loss and the statements of other comprehensive income. The financial position of the Group and Bank is set
out in the statements of financial position. Disclosures in respect of
risk and capital management are set out in notes 25 to 31.
Based on the financial performance and position of the Group and
the Bank and its risk management policies, the Directors are of the
opinion that the Group and Bank is well placed to continue in
business for the foreseeable future and as a result the financial
statements are prepared on a going concern basis.
New and amended standards adopted
The following new and revised Standards and Interpretations have
been adopted in the year ended 31 December 2014. Unless otherwise disclosed, their adoption has had no material impact on the
amounts reported in these financial statements:
Amendments to IFRS 2 in respect to Share-based Payment - The
standard amends the definitions of vesting condition and market
condition an adds definitions for performance condition and
service condition.
Amendments to IFRS 3 in respect to Business Combinations The standard requires that contingent consideration that is classi
fied as an asset or a liability to be measured at fair value at each
reporting date with gains and losses recognised in profit or loss.
Further amendments also clarify that IFRS 3 excludes from its
scope the accounting for the formation of a joint arrangement in
the financial statements of the joint arrangement itself.
Amendments to IFRS 8 on Operating Segments clarify the
disclosure requirements of judgements applied by management in
aggregating segments within the segmental reporting. They also
clarify that reconciliations of reportable segments assets to the
whole entity assets as reported on the statement of financial
position are only required if segmental assets are reported to the
chief operating decision maker (CODM).
NOTES
Amendments to IFRS 10,12 and IAS 27 in respect of definition
of Investment Entity and the requirements for an entity that
meets this definition not to consolidate it's subsidiaries but
instead measure them at fair value through profit or loss.
IFRS 13 on Fair Value Measurement - including amendments to
IFRS 9 and IAS 39 did not remove the ability to measure certain
short-term receivables and payables on an undiscounted basis
(amends basis for conclusions only). Further Amendments to
IFRS 13 clarify that the portfolio exception applies to
non-financial contracts as well as financial contracts within the
scope of IAS 39/IFRS 9.
IAS 24 on Related Party Disclosures - clarify how payments to
entities providing management services are to be disclosed.
Amendments to IAS 32 - Offsetting Financial Assets and
Financial Liabilities clarifying the meaning of current legal
enforceable right of set off and simultaneous realisation and
settlement.
Amendments to IAS 36 in respect of recoverable amount
disclosures for non financial assets.
Amendments to IAS 39 in respect of Novation of Derivatives
and Continuation of Hedge Accounting.
Amendments to IAS 40 in respect of Investment Property
classifying property vs. determining whether investment
property acquired represents a business to which IFRS 3 is
applicable.
IFRIC Interpretation 21 - Levies which deals with recognition of
liability to pay imposed by a Government.
New standards, amendments and interpretations issued but
not effective
At the date of authorisation of these financial statements the
following Standards and Interpretations which have not been
applied in these financial statements were in issue but not yet
effective for the year presented:
IFRS 5 in respect of guidance on reclassifications that take place
between sale and held for sale and held for distribution and vice
versa which will be effective for the accounting periods
beginning on or after 1 July 2016.
IFRS 9 in respect of Financial Instruments which will be effective
for the accounting periods beginning on or after 1 January 2018.
IFRS 15 in respect of Revenue from Contracts with Customers

which will be effective for accounting periods beginning on or
after 1 January 2017.
Amendments to IAS 16 and IAS 38 in respect of Clarification of
Acceptable Methods of Depreciation and Amortisation which
will be effective for accounting periods beginning on or after 1
January 2016.
Amendments to IAS 19 in respect of Defined Benefit Plans:
Employee Contributions which will be effective for accounting
periods beginning on or after 1 July 2014.
Annual improvements to IFRS's which will be effective for
accounting periods beginning on or after 1 July 2014 as follows:
IFRS 2 - Definition of vesting conditions
IFRS 3 - accounting for contingent consideration in a business
combination
IFRS 8 - Aggregation of operating segments and reconciliation
of total reportable segment assets to entity's assets
IFRS 13 - Carrying of short term receivables and payables at
invoiced amounts
IAS 16 and IAS 38 - Proportionate restatement of
depreciation/amortisation accumulated on revaluation
IAS 24 - Management fee paid to a management entity
IFRS 3 - Scope exclusions for joint ventures
IAS 40 - Application of IAS 40 vs. IFRS 3 on acquisition of
investment property
The directors expect that the future adoption of IFRS 9, IFRS 15
may have a material impact on the amounts reported. However,
it is not practicable to provide a reliable estimate of the effects of
the above until a detailed review has been completed. The directors do not expect that adoption of the other Standards and
Interpretations will have a material impact on the financial
statements in future periods. The company plans to apply the
changes above from their effective dates noted above.
(b) Critical accounting estimates and judgements

The Groups consolidated financial statements and its financial
results are influenced by its accounting policies and the assumptions, estimates and judgements made by management.
These assumptions, estimates and judgements are continually
evaluated and are based on historical experience and other
factors, including expectations of future events that are believed
to be reasonable under the prevailing circumstances.

90
NOTES
Key sources of estimation uncertainty
Management has made the following estimates that have a
significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial
year:
Impairment of loans and advances:
Critical estimates have been made by the management in
arriving at the discounted values of securities in order to arrive
at the impairment charges for non-performing loans and
advances. The values of securities are discounted using both the
International Financial Reporting Standards and the Prudential
Guidelines issued by the Central Bank of Kenya and Bank of
Uganda. The Prudential Guidelines provide a specific basis of
discounting securities whilst discounting according to International Accounting Standard 39 (IAS 39) on Financial Instruments: Recognition and Measurement' is based on historical
experience and other relevant factors, discounted to net
present values.
Useful lives of property, plant and equipment and intangible
assets:
Management reviews the useful lives and residual values of the
items of property and equipment and intangible assets on a
regular basis. During the financial years presented, the directors
determined no significant changes in the useful lives and
residual values.
Significant judgements made by management

in applying the Group's accounting policies
Management has made the following judgements that are
considered to have the most significant effect on the amounts
recognised in the financial statements:
Impairment losses on loans and advances:
The Group reviews its loan portfolio to assess the likelihood of
impairment on a quarterly basis. In determining whether a loan
or advance is impaired, the management makes judgement as
to whether there is any evidence indicating that there is a
measurable decrease in the estimated future cash flows
expected from that loan or advance.
Management use judgement based on historical experience for
such assets with credit risk characteristics and as to whether
there are any conditions that would indicate potential impairment. The methodology and assumptions used for estimating
both the amount and timing of future cash flows are reviewed
regularly to reduce any differences between loss estimates and
actual loss experience.

91 Imperial
Held to maturity financial assets:

The directors have reviewed the group's held to maturity financial
assets in the light of its capital maintenance and liquidity requirements and have confirmed the group's positive intention and
ability to hold those assets to maturity.
Non-financial assets:
The Group reviews its non financial assets to assess the likelihood
of impairment on an annual basis. In determining whether such
assets are impaired, management make judgements as to
whether there are any conditions that indicate potential impairment of such assets.
Impairment of financial assets classified as available for sale:
The Group determines that available-for-sale financial assets are
impaired when there has been a significant or prolonged decline
in their fair values below its original cost. This determination
of what is significant or prolonged requires significant judgement.
In making this judgement, the Group evaluates among other
factors, the volatility in share price and market prices for government securities. In addition, objective evidence of impairment
may be deterioration in the financial health of the investee, industry and sector performance, changes in technology, and operational and financing cash flows.
Control of subsidiary
The directors assess whether or not the group has control over
any entity based on whether or not the group has the practical
ability to direct the relevant activities of the entity unilaterally. In
making their judgement, the directors considered the groups
absolute size of holding in the entity and the relative size of
dispersion of the shareholdings owned by the other shareholders.
(c) Revenue recognition

Revenue is recognised only when it is probable that the economic
benefits associated with the transaction will flow to the Group.
The Group recognises revenue when the amount of revenue can
be reliably measured, it is probable that future economic benefits
will flow to the entity and when the specific criteria have been
met for each of the Group's activities as described below. The
amount of revenue is not considered to be reliably measured
until all contingencies relating to the sale have been resolved. The
Group bases its estimates on historical results, taking into consideration the type of customer, type of transaction and specifics of
each arrangement.
Interest income is recognised on an accruals basis in the profit and
loss for the year using the effective yield on the asset. Interest
income includes income from loans and advances, income from
placements with and loans and advances to other banking institutions and income from government securities.
NOTES
When financial assets become impaired, interest income is thereafter recognised at rates used to discount future cash flows for
the purposes of measuring the recoverable amount. Finance lease
income is recognised to reflect a constant rate of return on the
investment and is accrued over the agreement period using the
reducing balance method.Fees and commissions income and hire
purchase option fees are recognised at the time of effecting the
transaction.
Foreign exchange trading income is recognised at the time of
effecting the transaction. It includes income from spot and
forward deals and translated foreign currency assets and liabilities.
Dividend income is recognised when declared.
(d) Interest expense

Interest expense for all interest-bearing financial liabilities is recognised within interest expense in the statement of profit or loss
using the effective interest method.Interest expense includes
expense incurred on customer deposits and placements and
overnight borrowings with other banking institutions.
(e) Investment in subsidiary

Subsidiaries are all entities over which the bank has the power to
govern the financial and operating policies. Control is achieved
when the company; has power over the trustee; is exposed or
has right to variable returns from its involvement with the
investee and has the ability to use its power to affect its returns.
The group also assesses the existence of control where it does
not have a majority of the voting rights power but is able to
govern the financial and operating policies of a subsidiary. Control
may arise in certain circumstances where including the size of the
groups voting rights relative to the size and dispersion of holdings
of other shareholders give the group the power to govern the
financial and operating policies, where potential voting rights are
held by the company and rights from other contractual arrangements etc.
When the company has assessed and has less than a majority of
the voting rights of an investee, it has power over the investee
when the voting rights are sufficient to give it the practical ability
to direct the relevant activities of the investee unilaterally
When the company has assessed and has less than a majority of
the voting rights of an investee, it has power over the investee
when the voting rights are sufficient to give it the practical ability
to direct the relevant activities of the investee unilaterally. The
company reassesses whether or not it controls an investee if facts
and circumstances indicate that there are changes to one or more
of the three elements of controls listed above.
Consolidation of a subsidiary begins when the company obtains

control over the subsidiary and ceases when the company loses
control of the subsidiary . Specifically, income and expenses of a
subsidiary acquired or disposed of during the year are included in
the consolidated statement of profit and loss and other comprehensive income from the date the company gains control until the
date the company ceases to control the subsidiary.
The purchase method of accounting is used to account for the
acquisition of a subsidiary by the bank. The cost of an acquisition
is measured at the fair value of consideration given (i.e. the fair
values of assets given, equity instruments issued and liabilities
incurred or assumed, plus costs that can be directly attributed to
the acquisition) at the date of exchange. Identifiable assets
acquired, liabilities
and contingent liabilities assumed are
measured initially at the fair values at the acquisition date,
irrespective of the extent of any minority interest. The excess of
the cost of acquisition over the fair value of the Bank's share of
the identifiable net assets acquired is recorded as goodwill. Goodwill generated on the acquisition of a subsidiary is subject to
annual impairment review. If the cost of acquisition is less than the
fair value of the nets assets of the subsidiary acquired, the difference (negative goodwill) is recognised directly in profit or loss.
Income and expenses of subsidiaries acquired or disposed of
during the year are included in the consolidated statement of
profit or loss from the effective date of acquisition and up to the
effective date of disposal as appropriate. Total comprehensive
income of subsidiaries is attributed to the owners of
the
company and to the non-controlling interests even if this results
in the non-controlling interests having a deficit balance.
Intra-group balances, income and expenses on transactions
between group companies are eliminated. Profits and losses
resulting from inter-company transactions that are recognised in
assets are also eliminated. Accounting policies of subsidiaries have
been changed where necessary adjustments are made to financial
statements of subsidiary to bring their accounting policies into line
with the groups accounting policy.
(f) Translation of foreign currencies

The financial statements are presented in Kenya Shillings which is
the Bank's functional currency. The Group entities have their own
functional currency and their financial statements are measured
using that functional currency. Transactions in foreign currencies
during the year are converted at rates ruling at the transaction
dates. Assets and liabilities at the date of this report which are
expressed in foreign currencies are translated at mean rates ruling
at that date. The resulting differences from conversion and translation are dealt with in profit or loss in the year in which they arise

92
NOTES
The results and financial position of the subsidiary companies that
have a functional currency different from the presentation
currency are translated into the presentation currency as follows:
a. assets and liabilities for each statement of financial position
presented are translated using the closing rate at the date of
the report.
b. income and expenses for each statement of profit or loss are
translated using average exchange rates.
c. all resulting exchange differences are recognised as a
separate component of equity.
Upon consolidation, exchange differences arising from the translation of the net investment in foreign entities are taken to shareholders equity under the translation reserve. As at the reporting
date, assets and liabilities of foreign subsidiaries are translated into
Kenya Shillings at rates ruling at the reporting and their statement
of profit or losss are translated at weighted average exchange
rates. Exchange differences arising on translation are taken
directly to a separate component of equity.
(g) Property and equipment

All property and equipment is initially recorded at cost and thereafter stated at historical cost less depreciation. Historical cost
comprises expenditure initially incurred to bring the asset to its
location and condition ready for its intended use.Subsequent
costs are included in the assets carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that
future economic benefits associated with the item will flow to the
bank and the cost can be reliably measured. The carrying amount
of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial year in
which they are incurred.
Depreciation is calculated on a straight line basis to write down
the cost of each asset to its residual value over its estimated
useful life using the following annual rates:
Depreciation begins when an asset is available for use and ceases
at the earlier of the date that the asset is derecognised or classified as held for sale in accordance with IFRS 5 (Non-Current
Assets Held-For-Sale And Discontinued Operations) .
A non-current asset or disposal group is not depreciated while it
is classified as held for sale. A non-current asset or disposal group
is not depreciated while it is classified as held for sale.
Rate - %
Office renovations
Computers, copiers and faxes
Motor vehicles
Furniture and fittings
Office equipment
Office equipment-under lease

93 Imperial
Over the lease period of the building

30
25
12.5
20
Shorter of 20% p.a and lease period
The assets residual values and useful lives are reviewed, and
adjusted if appropriate, at the end of each reporting period.
An assets carrying amount is written down immediately to its
recoverable amount if the assets carrying amount is greater than
its estimated recoverable amount.
Gains or losses on disposal of property and equipment are determined by comparing the proceeds with the carrying amount and
are taken into account in determining operating profit.
Capital work-in-Progress
Assets in the course of construction (Capital work-in-progress)
are not depreciated.
Upon completion of the project the accumulated cost is transferred to an approriate asset category where it is depreciated
according to policy.
(h) Impairment of non-financial assets

At the end of each reporting period, the Group reviews the
carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent
of the impairment loss (if any).
Assets that have an indefinite useful life are not subject to amortisation and are tested for impairment annually. An impairment loss
is recognised for the amount by which the assets carrying
amount exceeds its recoverable amount. The recoverable
amount is the higher of an assets fair value less costs to sell and
value in use. For the purposes of assessing impairment, assets are
grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).
Non-financial assets that suffered an impairment are reviewed for
possible reversal of the impairment as at the date of the
statement of financial position.
(i) Intangible assets

Computer software
Computer software programmes are capitalised on the basis of
the costs incurred to acquire and bring to use the specific
software. These costs are amortised on a straight line basis over
their useful lives which are estimated to be 10 years.
Costs associated with developing or maintaining computer
software programmes are recognised as an expense as incurred.
Costs that are directly associated with the acquisition of identifiable and unique software products controlled by the Group, and
that will probably generate economic benefits exceeding costs
beyond one year, are recognised as intangible assets.
NOTES
(j) Retirement benefit obligations
The Bank operates a defined contribution pension scheme for its
employees, the assets of which are held in a separate trustee
administered guaranteed scheme managed by an insurance
company. The pension plan is funded by contributions from the
employees and the Bank. The Bank's contributions are charged to
profit or loss of the year to which they relate.
Management uses the Prudential Guidelines issued by the Central

Bank of Kenya when arriving at impairment provisions (whether
specific or provisions on the reamining portfolio of loans and
advances). Management classifies the performance of each loan
account in line with the requirements of these guidelines as
follows:
Category
The bank and its employees contribute to the National Social

Security Fund (NSSF), a statutory defined contribution scheme
registered under the NSSF Act. The Bank's contribution to the
defined contribution scheme are charged to profit or loss in the
year to which they relate. The bank has no further payment
obligations once the contributions have been paid.
(k) Employee entitlements

The estimated monetary liability for employees' accrued annual
leave entitlement as at the date of this report is recognised as an
expense accrual.
(l) Impairment of financial assets

Assets carried at amortised cost
The Group assesses at the date of the report whether there is
objective evidence that a financial asset is impaired. A financial
asset is impaired and impairment losses are incurred only if there
is evidence of impairment as a result of one or more events that
occurred after the initial recognition of the asset and that a certain
event has an impact on the estimated future cash flows of the
financial asset.
The criteria that the Group uses to determine that there is
objective evidence of an impairment loss include:
Default in contractual payments of principal or interest;
Cash flow difficulties experienced by the borrower or issuer
(for example, declining financial ratios)
Breach of loan covenants or conditions;
Initiation of bankruptcy proceedings;
Deterioration of the borrowers or issuer's competitive
position;
Deterioration in the value of collateral; and
The disappearance of an active market for that financial asset
because of financial difficulties
Impairment of loans and advances
Loans and advances are recognised when cash is advanced to
borrowers. Loans and advances are initially recognised at fair
value and are subsequently carried at amortised cost less provision for impairment losses.
Performance guideline for classification of account
Normal- Accounts are performing as per the contractual

terms, are not in arrears and are operating within
the sanctioned credit limits
Watch- Accounts that are in arrears and/or exceed the
sanctioned limit for periods between 30 to 90
days
Sub-standard- Accounts that are in arrears and/or exceed the
days
Doubtful- Accounts that are in arrears and/or exceed the
days
Loss- Accounts that are in arrears and/or exceed the
sanctioned limit for periods over 365 days
As per the Prudential Guidelines issued by the Central Bank of
Kenya, the bank is required to maintain a minimum general credit
risk provision for loan impairment. This ranges from between 1%
to 3% of the gross advances classified as Normal and Watch (per
the categorisation required by the Central Bank of Kenya), and
20% on the gross advances classified as Substandard, net
of discounted security and interest held in suspense .
For other non performing advances (doubtful and loss) a specific
credit risk provision for loan impairment is established to provide
for management's estimate of credit losses as soon as the recovery of an exposure is identified as doubtful. In arriving at such
provisions, present value of future expected cash flows, including
amounts recoverable from securities, discounted at effective
interest rates of loans are taken into account.
Where provisions computed in accordance with the Prudential
Guidelines exceed those under International Accounting
Standard 39 (IAS 39) on Financial Instruments: Recognition and
Measurement, the excess is credited to reserves under the
statutory loan loss reserve. The statutory loan loss reserve is not
distributable.

94
NOTES
The Prudential Guidelines and IAS 39 are used by the Group to
determine when a loan becomes impaired. The Group first
assesses whether objective evidence of impairment exists
individually for financial assets that are individually significant, and
individually or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence
of impairment exists for an individually assessed financial asset,
whether significant or not, it includes the asset in a group of
financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually
assessed for impairment and for which an impairment loss is/or
continues to be recognised are not included in a collective assessment of impairment.
If, in a subsequent period, the amount of the impairment loss

decreases and the decrease can be related objectively to an event
occurring after the impairment was recognised (such as an
improvement in the debtors credit rating), the previously recognised impairment loss is reversed in profit or loss.
The amount of the loss is measured as the difference between

the assets carrying amount and the present value of estimated
future cash flows (excluding future credit losses that have not
been incurred) discounted at the effective interest rate and the
discounted value of the collateral. The carrying amount of the
asset is reduced and the amount of the loss is recognised in profit
or loss. The calculation of the present value of the estimated
future cash flows of a collateralised financial asset reflects the cash
flows that may result from foreclosure less costs for obtaining and
selling the collateral, whether or not foreclosure is probable.
For the purposes of a collective evaluation of impairment,
financial assets are grouped on the basis of similar credit risk
characteristics (i.e. on the basis of the Groups grading process
that considers asset type, industry, geographical location, collateral type, past-due status and other relevant factors). Those
characteristics are relevant to the estimation of future cash flows
of such assets by being indicative of the debtors ability to pay all
amounts due according to the contractual terms of the assets
being evaluated.
Assets classified as 'available for sale'

The Group assesses at the date of the report whether there is
objective evidence that a financial asset or a group of financial
assets is impaired. In the case of equity investments classified as
available for sale', a significant or prolonged decline in the fair
value of the security below its cost is objective evidence of
impairment resulting in the recognition of an impairment loss. If
any such evidence exists, the cumulative loss (the difference
between the acquisition cost and the current fair value, less any
impairment losses previously recognised in profit or loss) is
eliminated from equity and recognised in the profit and loss.
Impairment losses recognised in profit or loss on equity instruments are not reversed through the consolidated profit or loss.
Historical loss experience is adjusted on the basis of current

observable data to reflect the effects of current conditions that
did not affect the period on which the historical loss experience
is based and to remove the effects of conditions in the historical
period that do not currently exist. Estimates of changes in future
cash flows for groups of assets should reflect and be directionally
consistent with changes in related observable data from period to
period (for example, changes in unemployment rates, property
prices, payment status, or other factors indicative of changes
in the probability of losses in the bank and their magnitude). The
methodology and assumptions used for estimating future cash
flows are reviewed regularly by the Group to reduce any differences between loss estimates and actual loss experience.
When a loan is uncollectible, it is written off against the related
provision for loan impairment. Such loans are written off after all
the necessary procedures have been completed and the amount
of the loss has been determined.
95 Imperial
Renegotiated loans
Loans that are either subject to collective impairment assessment
or individually significant and whose terms have been renegotiated are considered to be past due. They will continue to be
treated as past due unless all past due interest is paid in cash at
the time of renegotiation and a sustained record of performance
has been maintained.
(m) Leases
Finance leases as a lessor
Leases of property and equipment including hire purchase agreements where the Group transfers substantially all the risks and
rewards of ownership are classified as finance leases. Assets held
under finance leases are recognised as receivables at the amount
equal to the net investment in the lease. Subsequently, the net
investment in leases is carried at amortised cost, less provision for
impairment losses. Each lease repayment is treated as repayment
of principal and finance income so as to reflect a constant rate of
return on the investment. At the end of the lease term the lessee
has an option to purchase the asset.
Finance leases as a lessee
Leases of assets where the Bank has substantially all the risks and
rewards of ownership are classified as finance leases. Assets held
under finance leases are capitalized in the statement of financial
position at the lease's commencement, at the lower of the fair
value of the leased asset and the present value of the minimum
lease payments. Each lease payment is allocated between the
liability and finance charges so as to achieve a constant rate on the
finance balance outstanding. The corresponding rental obligations
net of finance charges are included in other liabilities.
NOTES
The interest element of the finance cost is charged to profit or
loss over the lease period so as to produce a constant periodic
rate of interest on the remaining balance of the liability for each
period.
Operating leases as a lessee
Leases of assets where a significant proportion of the risks and
rewards of ownership are retained by the lessor are classified as
operating leases. Payments made under operating leases are
charged to profit or loss on a straight line basis over the lease
period. Prepaid operating lease rentals are recognised as an asset
and are subsequently amortised over the lease period.
(n) Taxation
The tax expense for the period comprises current and deferred
tax. Tax is recognised in the profit or loss, except to the extent
that it relates to items recognised in equity. In which case, the tax
is also recognised in equity.
Current tax
Current tax is provided on the basis of the results for the
year.Taxable profits differs as reported in profit or loss statement
because of items of income or expense that are taxable or
deductible in other years or items are never taxable or deductible
in accordance with the tax legislation.
Deferred tax
Deferred tax is provided using the balance sheet liability method
for all temporary differences arising between the tax bases of
assets and liabilities and their carrying values for financial reporting
purposes. Currently enacted tax rates are used to determine
deferred tax. Deferred tax assets are recognised only to the
extent that it is probable that future taxable profits will be
available against which temporary differences can be utilised.
(o) Financial instruments

Financial assets and financial liabilities are recognised when the
group becomes a party to the contractual provisions of the
instrument. Management determines all classification of financial
assets at initial recognition.
(i) Financial assets Financial assets are initially recognised at fair
values plus transaction costs for all Group's financial assets.
The Group's financial assets fall into the following categories:
Held-to-maturity: financial assets with fixed or determinable
payments and fixed maturity where the management have the
positive intent and ability to hold to maturity. Subsequent to initial
recognition, such assets are carried at amortised cost using the
effective interest rate method. Changes in the carrying amount are
recognised in profit or loss
Available-for-sale: financial assets that are held for an indefinite

period of time, which may be sold in response to needs for liquidity or
changes in interest rate. Subsequent to initial recognition, they are
carried at fair value with gains and losses recognised in other comprehensive income, until the financial asset is derecognised or impaired.
At this time, the cumulative gain or loss previously recognised in
equity is derecognised and transferred to retained earnings. However,
interest calculated using the effective interest method and gains and
losses on disposal of assets classified as available-for-sale' are recognised in profit or loss. Dividends on 'available-for-sale' equity instruments are recognised in profit or loss when the entitys right to receive
payment is established.
Loans and receivables: financial assets with fixed or determinable
payments that are not quoted in an active market other than:
a) those that the entity intends to sell immediately or in the
short term, which are classified as 'held for trading', and
those that the entity upon initial recognition designated it as
'fair value through profit or loss';
b) those that the entity upon initial recognition designates as
'available-for-sale'; or
c) those for which the holder may not recover substantially all
of its initial investment, other than because of credit deterio
ration.
Subsequent to initial recognition, they are carried at amortised cost
using the effective interest method. Changes in the carrying amount
are recognised in profit or loss.
Financial assets at fair value through profit and loss: financial
assets that are acquired or incurred principally for the purpose of
generating a profit from short term fluctuation in price or dealer's
margin. Such assets are carried at fair value where fair value gains or
losses are included in the statement of profit or loss. This category has
two sub-categories:
a) financial assets held-for-trading and;
b) those designated at fair value through profit or loss at
inception.
A financial asset is classified as held-for-trading if it is acquired or
incurred principally for the purpose of selling or repurchasing in the
near term or if it is part of a portfolio of identified financial
instruments that are managed together and for which there is
evidence of a recent actual pattern of short-term profit-taking.

96
NOTES
The management classify the fair values of financial assets carried
at fair value on the statement of financial position based on the
qualitative characteristics of the fair valuation as at the financial
year end. The three hierarchy levels used by management are:
a) Level 1: where fair values are based on non-adjusted quoted
prices in active markets for identical financial assets.
b) Level 2: where fair values are based on adjusted quoted prices
and observable prices of similar financial assets.
c) Level 3: where fair values are not based on observable market
data.
Purchases and sales of financial assets are recognised on the trade
date i.e. the date on which the Group commits to purchase or sell
the asset. Financial assets are derecognised when the rights to
receive cash flows from the investments have expired or have been
transferred and the Group has transferred substantially all risks and
rewards of ownership.
Gains and losses on disposal of financial assets whose changes in
fair value were initially recognised in profit and loss are determined
by reference to their carrying amount and are taken into account in
determining profit before tax. On disposal of assets whose changes
in fair value were initially recognised in equity, the gains/losses are
recognised in the reserve, where the fair values were initially recog
nised. Any resultant surplus/deficit after the transfer of the
gains/losses are transferred to retained earnings.
Management classifies financial assets as follows:
Cash in hand, balances with Central Bank of Kenya, placements
with other banking institutions, other assets and loans and
advances to customers are classified as "Loans and receivables".
The portfolio of government securities has been split by bond into
the 'held-to-maturity' and available-for-sale' classes of financial
assets. The fair values of government securities classified as
available for sale are based on the market prices as at the date of
the reporting date.
(ii) Financial liabilities
The Group's financial liabilities which include customer depos
its, deposits from other banking institutions, other liabilities and
current tax fall into the following categories:
Financial liabilities measured at amortised cost:
These are initially measured at fair value and subsequently
measured at amortised cost, using the effective interest rate
method.
Financial liabilities are derecognised when, and only when, the
Group's obligations are discharged, cancelled or expired.

97 Imperial
(iii) Offsetting financial instruments

Financial assets and liabilities are offset and the net amount
reported in the statement of financial position when there is a
legally enforceable right to offset the recognised amounts and
there is an intention to settle on a net basis, or realise the asset
and settle the liability simultaneously.
(p) Dividends
Dividends are recognized as liabilities in the period in which they
are approved by the Group's shareholders. Proposed dividends
are shown as a separate component of equity until declared.
(q) Cash and cash equivalents

For the purposes of the cash flow statement, cash and cash
equivalents comprise cash, balances due to and from other
banking institutions, balances with Central Bank of Kenya and
Bank of Uganda (excluding cash reserve ratio) and government
securities maturing within 91 days from the reporting date.
(r) Contingent liabilities

Letters of credit, acceptances, guarantees and performance
bonds are accounted for as off balance sheet transactions and
disclosed as contingent liabilities. Estimates of the outcome and of
the financial effect of contingent liabilities is made by the management based on the information available up to the date the
financial statements are approved for issue by the directors. Any
expected loss is charged to profit or loss.
(s) Financial guarantee contracts

Financial guarantee contracts are contracts that require the issuer
to make specified payments to reimburse the holder for a loss it
incurs because a specified debtor fails to make payments when
due, in accordance with the terms of a debt instrument. Such
financial guarantees are given to banks, financial institutions and
other bodies on behalf of customers to secure loans, overdrafts
and other banking facilities.
(t) Foreign exchange forward contracts

Foreign exchange forward contracts are marked to market and
are carried at their fair value. Gains and losses on foreign
exchange forward contracts are dealt with on a net basis in profit
or loss in the year in which they arise.
NOTES
(u) Provisions under other liabilities
Provisions under other liabilities are recognised when the Group
has a present legal or constructive obligation, as a result of past
events and it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation and a
reliable estimate of the amount of the obligation can be made.
Provisions are not recognised for future operating losses. Provisions are measured at the present value of the expenditures
expected to be required to settle the obligation using a pre-tax
rate that reflects current market assessments of the time value of
money and the risks specific to the obligation. Present obligations
arising under onerous contracts are recognized and measured as
provisions . An onerous contract is considered to exist where the
bank has a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic
benefits expected to be received from the contract.
Segement results include revenue and expenses directly attributed to a segement. Segement assets and liabilities comprise
those operrating assets and liabilities that are directly attributed to
the segment or can be allocated to the segment on a reasonable
basis.
(x) Comparatives
Where necessary comparative figures have been adjusted to
conform with changes in presentation in the current year.
(v) Share capital and Reserves

Ordinary shares are classified as equity.
Reserves
Retained Earnings/Revenue Reserves: This is represents the
carried forward profits plus current period profit attributable to
shareholders.
Translation reserve: This represent exchange differences arising
from translation of the net investment in the subsidiary. This
reserve is not available for distribution to shareholders.
Statutory Loan loss reserve: This comprises the excess of provi
sions as computed in accordance with the Prudential Guidelines
over International Accounting Standard (IAS 39) on Financial
Instruments: Recognition and Measurement The reserve is not
distributable.
Fair Value Reserves: The reserve comprises the net cumulative
change in the fair value of available-for-sale investments until the
investment is derecognised or impaired. The reserve is not
distributable.
(w) Operating segments

The group's internal reporting of segemental information is as
shared with the group's chief operating decision maker. A
buisness segment is a group of assets and operations engaged in
providing products or services that are subject to risks and
returns that are different from those of other buisness segments.
A geographical segment is engaged in providing products or
services within a particular ecenomic environment that are
subject to risks and returns that are different from those of
segments operating in other economic environments.

98
NOTES TO THE FINANCIAL STATEMENTS
1. INTEREST INCOME
Loans and advances including finance lease income
Placements with and loans and advances to other
banking institutions
Other interest income
Loans and advances including finance lease income

Other interest income
2. INTEREST EXPENSE
Customer deposits
Customer deposits
3. OTHER INCOME /(LOSS)

Appraisals charges/option fees and other income
Gain/(loss) on disposal of government securities
Gain on disposal of property and equipment
Appraisals charges/option fees and other income

Gain/(loss) on disposal of government securities
Gain on disposal of property and equipment

99 Imperial
2014
Shs'000
2013
Shs'000
GROUP
2012
Shs'000
2011
Shs'000
2010
Shs'000
6,012,426
1,366,639
6,615,903
885,212
6,210,766
564,741
3,750,098
643,186
66,873
148,151
72,290
93,932
131,019
173
13,368
156
2474,966
279,430
4,506
29,320
7,594,089
7,667,337
6,906,700
4,406,808
2,788,222
5,443,737
1,273,307
6,168,488
859,760
BANK
5,977,771
537,949
3,705,267
592,740
2,474,966
279,430
1,777
114,856
3,767
64,181
2,808
92
2,168
156
4,506
29,320
6,833,677
7,096,196
6,518,620
4,300,331
2,788,222
2014
Shs'000
2013
Shs'000
GROUP
2012
Shs'000
2011
Shs'000
2010
Shs'000
2,620,294
285,436
2,916,005
282,123
3,831,580
460,306
1,397,013
387,927
818,654
104,143
2,905,730
3,198,128
3,841,887
1,784,940
922,797
2,232,895
264,283
2,650,136
278,983
BANK
3,188,255
444,559
1,369,989
387,711
818,654
104,143
2,497,178
2,929,119
3,632,814
1,757,700
922,797
2014
Shs'000
2013
Shs'000
GROUP
2012
Shs'000
2011
Shs'000
2010
Shs'000
177,720
7,615
572
163,890
39,371
1,050
127,767
35,975
4,852
113,129
(10,951)
1,278
82,010
267,162
1,832
185,907
204,311
168,593
103,456
351,004
165,693
7,615
572
137,643
39,371
1,050
BANK
108,650
35,975
4,733
103,378
(10,951)
1,278
82,010
267,162
1,832
173,880
178,064
149,358
93,705
351,004
GROUP
2012
Shs'000
4. IMPAIRMENT LOSSES ON
LOANS AND ADVANCES
2014
Shs'000
2013
Shs'000

Increase in specific provisions
Reversals of provisions
Increase in provisions on remaining portfolio
Write off of loans and advances
Currency translation difference
215,929
(83,230)
64,023
45,469
-
237,102
(49,651)
76,412
-
144,091
(45,312)
56,809
1,047
81,588
(24,762)
45,560
321
306
139,122
(28,262)
15,443
-
Net impairment losses on loans and advances
242,191
263,863
156,636
103,013
126,303
2011
Shs'000
2010
Shs'000
BANK

Increase in specific provisions
Reversals of provisions
Increase in provisions on remaining portfolio
Write off of loans and advances
216,945
(83,230)
45,239
-
174,059
(49,651)
66,919
-
140,376
(45,312)
41,454
-
81,283
(24,762)
37,929
321
139,122
(28,262)
15,443
-
Net impairment losses on loans and advances
178,954
191,327
136,518
94,771
126,303
5a. OTHER OPERATING

EXPENSES
2014
Shs'000
2013
Shs'000
1,306,145
1,206,697
25,295
111,202
216,778
41,981
Staff costs (Note 5 (b))

Directors' emoluments:
- fees
- other
Depreciation on property and equipment (Note 16)
Amortisation of intangible assets (Note 18)
Auditors' remuneration:
- current year
- (over)/under provision in prior year
Contribution to Deposit Protection Fund
Operating lease rentals
Other administrative expenses
Staff costs (Note 5 (b))

Directors' emoluments:
- fees
- other
Depreciation on property and equipment (Note 16)
Amortisation of intangible assets (Note 18)
Auditors' remuneration:
- current year
- (over)/under provision in prior year
Contribution to Deposit Protection Fund
Operating lease rentals
Other administrative expenses
GROUP
2012
Shs'000
2011
Shs'000
2010
Shs'000
952,088
820,722
592,967
96,555
110,346
209,637
30,621
39,606
83,421
157,266
27,517
49,041
66,386
146,491
19,387
42,000
46,039
90,436
13,329
10,558
1,941
66,046
354,584
640,818
384,544
8,995
(1,637)
51,945
325,564
619,334
312,244
12,295
652
30,810
192,100
470,156
253,911
8,321
1,136
22,967
160,940
434,422
184,968
3,160
419
17,740
96,054
347,655
117,869
3,159,892
2,970,301
2,219,822
1,914,781
1,367,668
1,098,157
1,038,335
BANK
861,321
764,989
592,967
22,650
55,809
172,567
36,029
94,000
68,561
169,503
25,129
37,000
58,436
120,678
22,490
47,000
50,332
114,592
14,425
42,000
46,039
90,436
13,329
6,740
1,941
48,479
296,505
543,494
327,020
5,740
(1,637)
36,989
279,825
529,973
271,789
7,740
652
29,516
153,768
403,001
211,635
4,745
1,136
22,967
120,471
380,938
161,716
3,160
419
17,740
96,054
347,655
117,869
2,609,391
2,518,207
1,906,237
1,683,311
1,367,668

100
5b. STAFF COSTS
The following items are included in staff costs:

Staff leave accrual
Pension costs:
- Defined contribution scheme
- National Social Security Fund (NSSF)
Number of employees
The following items are included in staff costs:
Staff leave accrual
Pension costs:
- Defined contribution scheme
- National Social Security Fund (NSSF)
Number of employees

101Imperial
2014
Shs'000
2013
Shs'000
(4,694)
7,276
41,899
22,541
GROUP
2012
Shs'000
2011
Shs'000
2010
Shs'000
8,456
3,657
983
60,213
26,309
57,833
9,750
45,382
5,922
38,994
746
590
596
457
344
(4,694)
7,276
527
BANK
8,456
3,657
983
37,554
1,147
34,060
1,144
56,459
1,048
44,810
920
38,994
746
489
495
456
419
344
6. OPERATING SEGMENTS
Information reported to the Group's Chief Executive for the purpose of resource allocation and assessment of segement performance is based on the geographical location of the group. The Group's reportable segements under IFRS 8 are therefore Kenya
and Uganda. The segment result comprises of profit for the year. Segement revenues and results: The following is an analysis of
the Group's revenue and results by reportable segement:
KENYA
Shs'000
ELIMINATION
Shs'000
UGANDA
Shs'000
Revenue
TOTAL
Shs'000
2014
Total revenue
Segment results:
6,833,677
760,412
7,594,089
PROFIT FOR THE YEAR
2,688,585
(671,122)
2,017,463
Revenue:
2013
Revenue
Inter-segement income
7,101,786
(5,590)
571,141
-
(5,590)
5,590
7,667,337
-
Total revenue
7,096,196
571,141
7,667,337
1,853,994
(63,536)
1,790,458
Segment results:
PROFIT FOR THE YEAR
Revenue:
2012
Revenue
6,522,725
(4,105)
388,080
-
(4,105)
4,105
6,906,700
-
Total revenue
6,518,620
388,080
6,906,700
1,403,302
(60,948)
1,342,354
Segment results:
PROFIT FOR THE YEAR
2011
Revenue:
Revenue
4,302,861
(2,530)
106,477
-
(2,530)
2,530
4,406,808
-
Total revenue
4,300,331
106,477
4,406,808
1,197,383
(84,541)
1,112,842
3,055,384
3,055,384
896,057
896,057
Segment results:
PROFIT FOR THE YEAR
Revenue:
Total revenue
Segment results:
PROFIT FOR THE YEAR

102
Inter-segement revenue is charged at prevailing market rates.
The accounting policies of the reportable segements are the same as the Group's accounting policies. Segement profit represents the profit after tax earned by each segment. This is the measure reported to the Group's Chief Executive for the purpose
of resource allocation and assessment of segement performance.
Segment assets:
2014
Shs'000
2013
Shs'000
2012
Shs'000
2011
Shs'000
2010
Shs'000
Kenya
Uganda
56,599,364
7,977,300
43,006,228
6,300,797
34,589,609
3,459,001
25,617,616
1,660,567
19,322,415
319,784
Consolidated total assets
64,576,664
49,307,025
38,048,610
27,278,183
19,642,199
2013
Shs'000
2012
Shs'000
2011
Shs'000
2010
Shs'000
Revenues from major products and services:

2014
Shs'000
Interest income
Other income
7,594,089
756,937
380,713
185,907
7,667,337
600,173
362,311
204,311
6,906,700
649,433
327,543
168,593
4,406,808
486,337
300,876
103,456
2,788,222
341,858
168,102
351,004
Consolidated income
8,917,646
8,834,132
8,052,269
5,297,477
3,649,186
No single customer contributed 10% or more to the group revenue in any of the years presented.

103 Imperial
2014
Shs'000
2013
Shs'000
GROUP
2012
Shs'000
2011
Shs'000
2010
Shs'000
656,073
(63,703)
592,370
673,105
(61,723)
611,382
518,149
(23,752)
(2,827)
491,570
469,445
(85,600)
(1,944)
381,901
370,573
(23,401)
347,172
Profit before tax
2,609,833
2,401,840
1,833,924
1,494,743
1,232,418
Tax calculated at a rate of 30% (2013: 30%)

- expenses not deductible for tax purposes
- income not subject to tax
Tax charge
782,950
22,328
(212,907)
592,370
720,552
22,196
(131,366)
611,382
550,177
25,523
(84,128)
491,570
448,423
14,271
(80,793)
381,901
369,726
9,097
(31,651)
347,172
2014
Shs'000
640,190
(16,096)
2013
Shs'000
673,105
(33,345)
BANK
2012
Shs'000
518,149
(9,003)
2011
Shs'000
469,445
(35,137)
2010
Shs'000
370,573
(23,401)
624,094
639,760
509,146
434,308
347,172
Profit before tax
2,688,585
2,493,754
1,912,448
1,631,691
1,232,418
Tax calculated at a rate of 30% (2013: 30%)

- expenses not deductible for tax purposes
- income not subject to tax
806,576
11,053
(193,534)
748,126
13,475
(121,841)
573,734
11,503
(76,090)
489,507
11,022
369,726
9,097
(66,221)
434,309
(31,651)
347,172
7. TAX
Current tax
Deferred tax credit (Note 19)
The tax on the Group's profit before tax differs

from the theoretical amount that would arise
using the basic tax rate as follows:
Current tax
Deferred tax credit (Note 19)
The tax on the Group's profit before tax differs

from the theoretical amount that would arise
using the basic tax rate as follows:
Tax charge
624,094
639,760
509,146

104
8. EARNINGS PER SHARE

Basic earnings per share is calculated on the profit attributable to the shareholders and on the weighted average number of shares
outstanding during the year
EARNINGS PER SHARE
2014
Shs'000
2013
Shs'000
GROUP
2012
Shs'000
2011
Shs'000
2010
Shs'000
Net profit for the year attributable to shareholders
2,017,463
1,790,458
1,342,354
1,112,842
885,246
Adjusted weighted average number of ordinary shares in issue
1,248,400
1,248,400
1,248,400
1,248,400
1,125,850
1,616
1,434
1,075
891
786
BANK
2012
Shs'000
2011
Shs'000
2010
Shs'000
Earnings per share - basic and diluted (Shs.)
2014
Shs'000
2013
Shs'000
Net profit for the year attributable to shareholders
2,064,491
1,853,994
1,403,302
1,197,383
885,246
Adjusted weighted average number of ordinary shares in issue
1,248,400
1,248,400
1,248,400
1,248,400
1,125,850
1,654
1,485
1,124
959
786
Earnings per share - basic and diluted (Shs.)
There were no potentially dilutive shares outstanding at 31 December 2014.
9. DIVIDEND
The directors do not propose a final dividend for the year (2013: Shs. 240.31 per share) amounting to Shs. Nil (2013: Shs. 300 million).
During the year an interim dividend of Shs. 160.21 per share (2013: Shs. 320.41) was declared amounting to a total of Shs. 200 million
(2013: Shs. 400 million). At the date that the dividend had been declared there were 1,248,400 ordinary shares issued that were fully paid
up. The total dividend for the year is therefore Shs. 160.21 per share (2013: Shs.560.72) amounting to a total of Shs. 200 Million (2013:
Shs. 700 Million).
In accordance with the Kenyan Companies Act, these financial statements reflect this dividend which is accounted for in the shareholders'
funds as an appropriation of retained profits in the year ended 31 December 2014. Where applicable, payment of dividends is subject to
deduction of withholding tax at a tax rate of 5% for residents. There are also qualifying dividends for residents whose shareholding is above
12.5% hence are exempt from withholding tax.

105 Imperial
10. BALANCES WITH CENTRAL BANKS

- cash reserve ratio
- other balances (Note 24)

- cash reserve ratio
- other balances (Note 24)
2014
Shs'000
2013
Shs'000
GROUP
2012
Shs'000
5,307,637
1,435,749
1,325,095
582,026
1,388,813
778,109
921,985
719,785
652,055
423,714
6,743,386
1,907,121
2,166,922
1,641,770
1,075,769
2011
Shs'000
2010
Shs'000
BANK
5,307,637
710,067
1,325,095
95,242
1,388,813
440,471
921,985
718,281
652,055
181,750
6,017,704
1,420,337
1,829,284
1,640,266
833,805
The cash reserve ratio balance is non interest bearing and is based on the value of customer deposits as adjusted in accordance with
Central Bank requirements. These funds are not available to finance the bank's day to day operations.
2013
Shs'000
GROUP
2012
Shs'000
2011
Shs'000
2010
Shs'000
9,518,650
6,531,251
227,958
5,104,944
6,018,962
182,748
2,593,314
5,933,240
49,911
571,911
5,687,357
178,817
5,491,498
-
Comprising
16,277,859
11,306,654
8,576,465
6,438,085
5,491,498
Maturing on or before 91 days from the

reporting date (Note 24)
Maturing after 91 days from the reporting date
413,911
15,863,948
764,059
10,542,595
113,270
8,463,195
317,581
6,120,504
1,453,412
4,038,086
16,277,859
11,306,654
8,576,465
6,438,085
5,491,498
11. GOVERNMENT SECURITIES

Treasury bonds - available-for-sale
Treasury bonds - held-to-maturity
Treasury bills - held-to-maturity
2014
Shs'000
The fair values of government securities disclosed above are categorised under Level 1 based on the information set out on the accounting
policy (o).
BANK
9,405,439
5,810,644
5,104,944
5,844,744
2,593,314
5,740,391
571,911
5,379,678
4,979,855
-
Comprising
15,216,083
10,949,688
8,333,705
5,951,589
4,979,855
Maturing on or before 91 days from the

Maturing after 91 days from the reporting date
176,472
15,039,611
700,000
10,249,688
100,000
8,233,705
9,902
5,941,687
1,120,000
3,859,855
15,216,083
10,949,688
8,333,705
5,951,589
4,979,855
Treasury bonds - available-for-sale

Treasury bonds - held-to-maturity

106
12. PLACEMENT WITH & LOANS &

ADVANCES TO OTHER BANKING
INSTITUTIONS
Balances with local banking institutions
Balances with banking institutions abroad
Term deposits with banking institutions abroad
Items in course of collection from banking institutions
Balances with local banking institutions

Balances with banking institutions abroad
Term deposits with banking institutions abroad
Items in course of collection from banking institutions
2013
Shs'000
GROUP
2012
Shs'000
1,196,371
1,029,276
348,802
229,356
1,939,443
1,281,875
539,436
195,964
1,030,302
1,496,257
1,040,946
333,222
605,835
885,069
331,766
229,494
25,190
67,363
379,534
185,824
2,803,805
3,956,718
3,900,727
2,052,164
657,911
59,229
800,630
348,802
229,356
56,314
982,851
539,436
195,964
BANK
234,741
1,250,958
1,040,946
333,222
134,966
784,851
331,766
228,304
10,904
67,363
379,534
185,824
1,438,017
1,774,565
2,859,867
1,479,887
643,625
2013
Shs'000
GROUP
2012
Shs'000
2011
Shs'000
2010
Shs'000
2014
Shs'000
13. OTHER ASSETS
2014
Shs'000
Receivables and prepayments
755,856
567,043
366,148
2011
Shs'000
2010
Shs'000
347,353
249,852
325,154
249,852
BANK
Receivables and prepayments

107Imperial
555,490
447,319
345,108
14. LOANS AND ADVANCES

TO CUSTOMERS
GROUP
2012
Shs'000
2013
Shs'000
2014
Shs'000
2011
Shs'000
2010
Shs'000
Overdrafts
Commercial loans
Bills discounted
Gross investment in finance leases (Note 14 (d))
18,871,404
13,502,841
1,003,813
4,514,030
14,926,800
11,813,415
414,893
4,273,171
10,761,439
7,933,283
173,530
3,777,946
7,772,312
5,517,041
95,051
3,465,085
5,884,823
3,113,709
178,508
2,996,048
Gross loans and advances to customers
37,892,088
31,428,279
22,646,198
16,849,490
12,173,088
Unearned interest on finance leases (Note 14 (d))

Provision for impaired loans and advances (Note 14 (b))
Loans and advances to customers net of provision
for impairment
(580,800)
(1,240,077)
(505,873)
(1,067,182)
(529,142)
(824,695)
(511,919)
(678,252)
(443,083)
(577,177)
36,071,211
29,855,224
21,292,361
15,659,319
11,152,828
BANK
Overdrafts
Commercial loans
Bills discounted
Gross investment in finance leases (Note 14 (d))
16,557,868
10,632,809
1,003,813
4,514,030
13,282,666
9,681,314
414,893
4,273,171
9,858,523
6,555,594
173,530
3,777,946
7,580,894
4,944,994
95,051
3,465,085
5,884,823
3,113,709
178,508
2,996,048
Gross loans and advances to customers
32,708,520
27,652,044
20,365,593
16,086,024
12,173,088
Unearned interest on finance leases (Note 14 (d))

Provision for impaired loans and advances (Note 14 (b))
Loans and advances to customers net of provision
for impairment
(580,800)
(1,129,881)
(505,873)
(974,451)
(529,142)
(798,132)
(511,919)
(670,316)
(443,083)
(577,177)
30,997,839
26,171,720
19,038,319
14,903,789
11,152,828
14b.Provision for impaired

loans and advances
Specific provisions on
individual non
performing loans &
advances Shs'000
Provisions on the
remaining portfolio
of loans and advances
Shs'000
Total
Provisions
Shs'000
GROUP
At start of year
New provisions
Increased provisions
Provisions no longer required
777,401
138,933
76,996
(83,230)
289,781
Net increase in provision for impairment

charged to profit or loss (Note 4)
Effect of currency translation differences
Provisions utilised during the year for write off
132,699
1,878
(23,524)
64,023
(2,181)
-
196,722
(303)
(23,524)
At end of year
888,454
351,623
1,240,077
45,239
18,784
-
1,067,182
184,172
95,780
(83,230)

108
individual non
performing loans &
advances
Shs'000
Provisions on the
remaining portfolio
Shs'000
At start of year
New provisions
718,616
138,933
78,012
(83,230)
255,835
45,239
-
974,451
184,172
78,012
(83,230)

133,715
(23,524)
45,239
-
178,954
(23,524)
At end of year
828,807
301,074
1,129,881

loans and advances
BANK
Total
Provisions
Shs'000
Loans and advances have been written down to their recoverable amount. Non performing loans and advances on which provisions for
impairment have been recognised amount to Shs. 2.196 billion as at 31 December 2014. These are included in the statement of financial
position net of provisions at Shs. 1.308 billion. In the opinion of the directors sufficient securities are held to cover the exposure on such
loans and advances. Interest income during the year ended 31 December 2014 amounting to Shs. 188.469 million on impaired loans and
advances has not been recognised as the management feels no economic benefit of such interest will flow to the bank. From past experience, the management is of the opinion that 1% provision for normal and watch accounts is adequate to cover any accounts which may
benon-performing based on historical loss experience.
individual non
performing loans &
advances
Shs'000
Provisions on the
remaining portfolio
Shs'000
At start of year
New provisions
613,236
136,768
100,334
(49,651)
211,459
66,919
9,493
-
824,695
203,687
109,827
(49,651)

Effect of currency translation differences
187,451
2,131
(25,417)
76,412
1,910
-
263,863
4,041
(25,417)
At end of year
777,401
289,781
1,067,182

loans and advances
GROUP
Total
Provisions
Shs'000

109Imperial

loans and advances
BANK
individual non
performing loans &
advances
Shs'000
Provisions on the
remaining portfolio
Shs'000
Total
Provisions
Shs'000

At start of year
New provisions
609,216
136,768
37,291
(49,651)
188,916
66,919
-
798,132
203,687
37,291
(49,651)

124,408
(15,008)
66,919
-
191,327
(15,008)
At end of year
718,616
255,835
974,451

loans and advances
GROUP
individual non
performing loans &
advances
Shs'000
Provisions on the
remaining portfolio
Shs'000
Total
Provisions
Shs'000

At start of year
New provisions
At end of year
523,159
95,718
48,373
(45,312)
155,093
56,366
-
678,252
152,084
48,373
(45,312)
98,779
(8,702)
56,366
-
155,145
(8,702)
613,236
211,459
824,695

110

loans and advances
BANK
individual non
performing loans &
advances
Shs'000
Provisions on the
remaining portfolio
Shs'000
Total
Provisions
Shs'000

At start of year
New provisions
At end of year

loans and advances
GROUP
522,854
92,003
48,373
(45,312)
147,462
41,454
-
670,316
133,457
48,373
(45,312)
95,064
(8,702)
41,454
-
136,518
(8,702)
609,216
188,916
798,132
individual non
performing loans &
advances
Shs'000
Provisions on the
remaining portfolio
Shs'000
Total
Provisions
Shs'000

At start of year
New provisions
At end of year

111Imperial
467,643
40,928
40,659
(24,762)
109,533
45,560
-
577,176
86,488
40,659
(24,762)
56,826
(1,310)
45,560
-
102,386
(1,310)
523,159
155,093
678,252

loans and advances
individual non
performing loans &
advances Shs'000
Provisions on the
remaining portfolio
Shs'000
Total
Provisions
Shs'000
BANK
At start of year
New provisions
At end of year

loans and advances
467,643
40,623
40,659
(24,762)
109,533
37,929
-
577,176
78,552
40,659
(24,762)
56,521
(1,310)
37,929
-
94,450
(1,310)
522,854
147,462
670,316
individual non
performing loans &
advances Shs'000
Provisions on the
remaining portfolio
Shs'000
Total
Provisions
Shs'000
GROUP & BANK

At start of year
New provisions
396,489
68,575
70,547
(28,262)
94,091
15,443
-
490,580
68,575
85,990
(28,262)

charged to profit or loss
110,860
(39,706)
15,443
-
126,303
(39,706)
At end of year
467,643
109,534
577,177

112

113Imperial
Agriculture
Building and construction
Energy and water
Financial Services
Manufacturing
Mining and Quarrying
Personal/Household/Social
Real Estate
Hire purchase and insurance
Tourism,restaurant and Hotels
Trade & Business services
Transport and Communication
Others
14c. Concentration
Agriculture
Building and construction
Energy and water
Financial Services
Manufacturing
Mining and Quarrying
Personal/Household/Social
Real Estate
Hire purchase and insurance
Tourism,restaurant and Hotels
Trade & Business services
Transport and Communication
Others
14c. Concentration
100%
2013
%
31,428,279
BANK
2013
Shs'000
100%
2014
%
5%
8%
3%
2%
17%
3%
19%
17%
0%
6%
45%
18%
0%
144%
2014
Shs'000
1,233,675
1,900,912
792,397
495,823
3,935,616
601,736
4,385,509
3,788,552
1,254,374
10,284,844
4,035,083
-
32,708,520
27,652,044
677,865
1,725,128
662,335
593,974
3,603,516
552,622
3,699,333
3,575,694
1,303,214
7,751,225
3,507,138
100%
2%
6%
2%
2%
13%
2%
13%
13%
0%
5%
28%
13%
0%
3%
9%
2%
2%
13%
2%
13%
11%
0%
4%
28%
12%
0%
37,892,089
868,625
2,816,754
662,335
637,267
4,164,506
575,170
4,093,480
3,575,694
1,328,154
8,927,975
3,778,319
-
4%
8%
2%
3%
13%
2%
13%
10%
0%
3%
30%
11%
0%
2013
%
1,600,822
3,044,307
792,397
1,011,989
5,088,643
637,319
4,910,285
3,788,552
1,254,374
11,435,977
4,327,424
-
GROUP
2013
Shs'000
2014
%
2014
Shs'000
20,365,593
359,488
1,381,253
1,949,892
1,003,989
572,670
1,547,321
2,752,273
2,512,473
8,286,234
2012
Shs'000
22,646,198
465,601
1,986,174
2,406,703
1,153,488
572,670
1,547,321
2,950,238
2,675,820
8,888,183
2012
Shs'000
100%
2%
7%
0%
0%
10%
0%
5%
0%
3%
8%
14%
12%
41%
2012
%
100%
2%
9%
0%
0%
11%
0%
5%
0%
3%
7%
13%
12%
39%
2012
%
3%
13%
0%
0%
9%
0%
4%
0%
3%
9%
10%
13%
35%
2011
%
3%
13%
0%
0%
9%
0%
4%
0%
3%
9%
10%
13%
35%
2011
%
16,086,024 100%
557,837
2,156,170
1,485,276
679,705
489,504
1,478,772
1,566,563
2,028,311
5,643,886
2011
Shs'000
16,849,490 100%
557,837
2,269,846
1,517,431
754,940
489,504
1,576,679
1,724,806
2,111,064
5,847,383
2011
Shs'000
12,173,088
365,305
1,405,964
1,373,554
447,426
538,424
2,154,930
1,166,327
1,743,865
2,977,293
GROUP
2010
Shs'000
12,173,088
365,305
1,405,964
1,373,554
447,426
538,424
2,154,930
1,166,327
1,743,865
2,977,293
GROUP
2010
Shs'000
100%
3%
12%
0%
0%
11%
0%
4%
0%
4%
18%
10%
14%
24%
2010
%
100%
3%
12%
0%
0%
11%
0%
4%
0%
4%
18%
10%
14%
24%
2010
%
14c. Concentration
Economic sector risk concentrations within the loans and advances portfolio are as follows:
14d. Finance leases

The loans and advances to customers include the following finance lease receivables for leases where the group is the lessor.They may be
analysed as follows:
2014
Shs'000
2013
Shs'000
GROUP
2012
Shs'000
2011
Shs'000
2010
Shs'000
Unearned future finance income
851,444
3,662,586
4,514,030
(580,800)
908,984
3,364,187
4,273,171
(505,873)
725,342
3,052,604
3,777,946
(529,142)
653,605
2,811,480
3,465,085
(511,919)
668,050
2,327,998
2,996,048
(443,083)
Net investment in finance leases
3,933,230
3,767,298
3,248,804
2,953,166
2,552,965
509,821
3,423,409
3,933,230
585,258
3,182,040
3,767,298
392,581
2,856,223
3,248,804
333,301
2,619,865
2,953,166
395,461
2,157,504
2,552,965
2014
Shs'000
2013
Shs'000
BANK
2012
Shs'000
2011
Shs'000
2010
Shs'000
Unearned future finance income
851,444
3,662,586
4,514,030
(580,800)
908,984
3,364,187
4,273,171
505,873)
725,342
3,052,604
3,777,946
(529,142)
653,605
2,811,480
3,465,085
(511,919)
668,050
2,327,998
2,996,048
(443,083)
Net investment in finance leases
3,933,230
3,767,298
3,248,804
2,953,166
2,552,965
509,821
3,423,409
3,933,230
585,258
3,182,040
3,767,298
392,581
2,856,223
3,248,804
333,301
2,619,865
2,953,166
395,461
2,157,504
2,552,965
Gross investment in finance leases:

- maturing not later than 1 year
- maturing later than 1 year and not later than 5 years
The net investment in finance leases may be analysed as

follows: - not later than 1 year
- later than 1 year and not later than 5 years
Gross investment in finance leases:

- maturing not later than 1 year
- maturing later than 1 year and not later than 5 years
The net investment in finance leases may be analysed as

follows: - not later than 1 year
- later than 1 year and not later than 5 years

114
14e. Loans and advances neither past

due nor impaired, past due but not
impaired and individually impaired
2014
Shs'000
2013
Shs'000
GROUP
2012
Shs'000
2011
Shs'000
2010
Shs'000
Neither past due nor impaired

Past due but not impaired
Individually and portfolio impaired
28,476,869
6,637,885
2,196,534
23,979,054
4,996,267
1,948,981
15,954,245
5,209,232
953,579
11,890,177
3,618,189
829,205
9,096,957
1,856,382
776,666
Gross Loans and Advances
37,311,288
30,924,302
22,117,056
16,337,571
11,730,005
(888,454)
(777,401)
(613,236)
(523,159)
(467,643)
(351,623)
(289,781)
(211,459)
(155,093)
(109,534)
36,071,211
29,857,120
21,292,361
15,659,319
11,152,828
Less: Specific provision on individual non performing

loans and advances
Provision on the remaining portfolio of loans
and advances
Net Loans and Advances
14e. Loans and advances neither past

due nor impaired, past due but not
impaired and individually impaired
2014
Shs'000
2013
Shs'000
BANK
2012
Shs'000
2011
Shs'000
2010
Shs'000
Neither past due nor impaired

Past due but not impaired
Individually and portfolio impaired
23,960,014
6,147,420
2,020,286
20,982,970
4,600,570
1,562,631
13,708,142
5,183,538
944,770
11,146,744
3,599,625
827,736
9,096,957
1,856,382
776,666
Gross Loans and Advances
32,127,720
27,146,171
19,836,450
15,574,105
11,730,005
(828,807)
(718,616)
(609,216)
(522,854)
(467,643)
(301,074)
(255,835)
(188,916)
(147,462)
(109,534)
30,997,839
26,171,720
19,038,318
14,903,789
11,152,828
Less: Specific provision on individual non performing

loans and advances
Provision on the remaining portfolio of loans
and advances
Net Loans and Advances

115 Imperial
Loans and advances that are aged 90 days are considered past due. Loans and advances that are aged past 90 days are considered
impaired.The credit quality of the portfolio of loans and advances that were past due but not impaired can be assessed by reference to
the internal rating system adopted by the bank. The loans and advances past due but not impaired can be analysed as follows:
Watch accounts
2014
Shs'000
2013
Shs'000
GROUP
2012
Shs'000
2011
Shs'000
2010
Shs'000
6,637,885
4,996,267
5,209,232
3,618,189
1,856,383
2014
Shs'000
2013
Shs'000
GROUP
2012
Shs'000
2011
Shs'000
2010
Shs'000
1,955,152
4,682,733
1,671,114
3,325,153
1,703,697
3,505,534
964,344
2,653,845
534,258
1,322,125
6,637,885
4,996,267
5,209,231
3,618,189
1,856,383
2014
Shs'000
2013
Shs'000
BANK
2012
Shs'000
2011
Shs'000
2010
Shs'000
6,147,420
4,600,570
5,183,538
3,599,625
1,856,383
2014
Shs'000
2013
Shs'000
BANK
2012
Shs'000
2011
Shs'000
2010
Shs'000
1,805,606
4,341,814
1,399,392
3,201,178
1,685,719
3,497,819
945,780
2,653,845
534,258
1,322,125
6,147,420
4,600,570
5,183,538
3,599,625
1,856,383
The loans and advances past due but not impaired can be analysed as follows:
Commercial loans and gross investment

in finance leases
Overdrafts
Watch accounts
The loans and advances past due but not impaired can be analysed as follows:
Commercial loans and gross investment

in finance leases
Overdrafts
The fair value of the collateral for loans and advances past due but not impaired is considered adequate.
Loans and advances individually impaired

The fair value of the collateral for loans and advances individually impaired is Shs. 1.034 Billion (2013: Shs. 742.407 million, 2012: Shs.
273.596 million, 2011: Shs. 248.73 million, 2010 Shs. 256.231 million).
Loans and advances renegotiated

Restructuring activities include extended payment arrangements, approved external management plans, modification and deferral of
payments. Following restructuring, a previously overdue customer account is reset to a substandard status and managed together with
other similar accounts. Restructuring policies and practices are based on indicators or criteria which, in the judgment of the credit committee indicate that payment will most likely continue. These policies are kept under continuous review.

116
15. INVESTMENT
IN SUBSIDIARY
Country of
incorporation
Shares at cost
Uganda
Holding
58.6%
2014
Shs'000
858,174
2013
Shs'000
871,972
BANK
2012
Shs'000
721,250
2011
Shs'000
448,109
2010
Shs'000
448,109
During the year ended 31 December 2014, Imperial Bank (Kenya) Limited sold 36,262 shares in its subsidiary Imperial Bank Uganda
Limited to the non-controlling interest, decreasing its shareholding from 63.8% to 58.6%.
16. PROPERTY AND

EQUIPMENT - GROUP
Cost
At start of year
Additions
Disposals
At end of year
Computers,
copiers
and faxes
Shs'000
Office
renovations
Shs'000
Motor
vehicles
Shs'000
Furniture &
fittings
Shs'000
Office
equipment
Shs'000
Total
Shs'000
7,243
7,243
295,479
31,475
(7,294)
319,660
90,941
36,008
(1,710)
125,239
751,262
53,448
(6,331)
798,379
544,728
76,323
621,051
1,689,652
197,254
(15,335)
1,871,571
At start of year
Charge for the year
On disposal
7,243
-
254,838
30,246
(7,294)
(215)
54,943
21,199
(1,710)
(86)
361,558
81,430
(626)
(527)
330,381
83,903
(646)
1,008,964
216,778
(9,630)
(1,474)
At end of year
7,243
277,575
74,346
441,835
413,638
1,214,637
42,085
50,893
356,545
207,413
656,934
Depreciation
Net book value
In the opinion of directors there is no impairment in the value of property and equipment. Property and equipment with a cost of Shs.
707.137 million was fully depreciated at 31 December 2014. The depreciation charge in respect of these assets for the year ended 31
December 2014 would have been Shs. 144.043 million had they not been fully depreciated.

117Imperial
16. PROPERTY AND

EQUIPMENT - BANK
Cost
At start of year
Additions
Disposals
At end of year
Computers,
copiers
and faxes
Shs'000
Office
renovations
Shs'000
Motor
vehicles
Shs'000
Furniture &
fittings
Shs'000
Office
equipment
Shs'000
Total
Shs'000
7,243
7,243
256,188
26,873
(7,294)
275,767
82,127
34,355
(1,710)
114,772
645,739
12,399
(500)
657,638
459,850
63,227
523,077
1,451,147
136,854
(9,504)
1,578,497
At start of year
Charge for the year
On disposal
7,243
-
222,854
23,796
(7,294)
49,040
18,599
(1,710)
331,718
65,615
(500)
292,002
64,557
-
902,857
172,567
(9,504)
At end of year
7,243
239,356
65,929
396,833
356,559
1,065,920
36,411
48,843
260,805
166,518
512,577
Depreciation
Net book value
In the opinion of directors there is no impairment in the value of property and equipment. Property and equipment with a cost of Shs.
707.137 million was fully depreciated at 31 December 2014. The depreciation charge in respect of these assets for the year ended 31
December 2014 would have been Shs. 144.043 million had they not been fully depreciated.
16. PROPERTY AND

EQUIPMENT - GROUP
Computers,
copiers
and faxes
Shs'000
Office
renovations
Shs'000
Motor
vehicles
Shs'000
Furniture &
fittings
Shs'000
Office
equipment
Shs'000
Total
Shs'000
Cost
At start of year
Additions
Disposals
7,243
-
269,961
23,582
1,936
80,431
24,051
(14,108)
567
510,658
235,661
4,943
418,346
123,377
3,005
1,286,638
406,671
(14,108)
10,451
At end of year
7,243
295,479
90,941
751,262
544,728
1,689,652
Depreciation
At start of year
Charge for the year
On disposal
Currency translation differencet
7,243
-
213,437
40,512
889
42,539
19,855
(7,651)
200
286,800
73,917
841
254,061
75,353
967
804,081
209,637
(7,651)
2,897
At end of year
7,243
254,838
54,943
361,558
330,381
1,008,964
40,641
35,998
389,704
214,347
680,689
Net book value

118
16. PROPERTY AND

EQUIPMENT - BANK
Cost
At start of year
Additions
Disposals
At end of year
Computers,
copiers
and faxes
Shs'000
Office
renovations
Shs'000
Motor
vehicles
Shs'000
Furniture &
fittings
Shs'000
Office
equipment
Shs'000
Total
Shs'000
7,243
7,243
235,603
20,585
256,188
72,937
23,298
(14,108)
82,127
435,534
210,205
645,739
352,781
107,069
459,850
1,104,098
361,157
(14,108)
1,451,147
At start of year
Charge for the year
On disposal
7,243
38,974
17,717
(7,651)
268,574
63,144
-
232,433
59,569
-
741,005
193,781
29,073
-
At end of year
7,243
222,854
49,040
331,718
292,002
902,857
33,334
33,087
314,021
167,848
548,290
Depreciation
Net book value
16. PROPERTY AND

EQUIPMENT - GROUP
Computers,
copiers
and faxes
Shs'000
Office
renovations
Shs'000
Motor
vehicles
Shs'000
Furniture &
fittings
Shs'000
Office
equipment
Shs'000
(7,651)
Total
Shs'000
Cost
At start of year
Additions
Disposals
7,243
-
251,366
29,988
(9,545)
(1,849)
62,085
34,442
(15,684)
(413)
423,634
91,219
(4,195)
338,432
82,441
(2,527)
1,082,760
238,091
(25,229)
(8,984)
At end of year
7,243
269,961
80,431
510,658
418,346
1,286,638
Depreciation
At start of year
Charge for the year
On disposal
Currency translation differencet
7,243
-
186,799
37,304
(9,545)
(1,120)
38,230
17,393
(12,240)
(844)
238,231
49,609
(1,040)
202,327
52,960
(1,225)
672,829
157,266
(21,785)
(4,229)
At end of year
7,243
213,437
42,539
286,800
254,061
804,081
56,523
37,891
223,858
164,285
482,557
Net book value

119Imperial
16. PROPERTY AND

EQUIPMENT - BANK
Cost
At start of year
Additions
Disposals
At end of year
Computers,
copiers
and faxes
Shs'000
Office
renovations
Shs'000
Motor
vehicles
Shs'000
Furniture &
fittings
Shs'000
Office
equipment
Shs'000
Total
Shs'000
7,243
7,243
218,359
26,789
(9,545)
235,603
52,352
33,716
(13,131)
72,937
348,751
86,783
435,534
293,331
59,450
352,781
920,036
206,738
(22,676)
1,104,098
At start of year
Charge for the year
On disposal
7,243
-
176,895
26,431
(9,545)
35,797
15,417
(12,240)
228,871
39,703
-
193,306
39,127
-
642,112
120,678
(21,785)
At end of year
7,243
193,781
38,974
268,574
232,433
741,005
41,822
33,963
166,960
120,348
363,092
Depreciation
Net book value
16. PROPERTY AND

EQUIPMENT - GROUP
Cost
At start of year
Additions
Disposals
At end of year
Computers,
copiers
and faxes
Shs'000
Office
renovations
Shs'000
Motor
vehicles
Shs'000
Furniture &
fittings
Shs'000
Office
equipment
Shs'000
Total
Shs'000
7,243
7,243
179,047
78,138
(5,819)
251,366
48,820
21,022
(7,757)
62,085
330,331
93,303
423,634
220,785
117,647
338,432
786,226
310,110
(13,576)
1,082,760
At start of year
Charge for the year
On disposal
7,243
-
159,252
33,747
(5,819)
(381)
31,665
12,755
(6,096)
(94)
194,724
43,868
(361)
146,552
56,122
(347)
539,436
146,491
(11,915)
(1,183)
At end of year
7,243
186,799
38,230
238,231
202,327
672,829
64,568
23,855
185,403
136,105
409,931
Depreciation
Net book value

120
16.PROPERTY AND
EQUIPMENT - BANK
Cost
At start of year
Additions
Disposals
At end of year
Computers,
copiers
and faxes
Shs'000
Office
renovations
Shs'000
Motor
vehicles
Shs'000
Furniture &
fittings
Shs'000
Office
equipment
Shs'000
Total
Shs'000
7,243
7,243
179,047
45,131
(5,819)
218,359
48,820
9,753
(6,221)
52,352
330,331
18,420
348,751
220,785
72,546
293,331
786,226
145,850
(12,040)
920,036
At start of year
Charge for the year
On disposal
7,243
-
159,252
23,463
(5,819)
31,665
10,228
(6,096)
194,724
34,147
-
146,552
46,754
-
539,436
114,592
(11,915)
At end of year
7,243
176,896
35,797
228,871
193,306
642,113
41,463
16,555
119,880
100,025
277,923
Depreciation
Net book value
16.PROPERTY AND
EQUIPMENT
- GROUP & BANK
Office
renovations
Shs'000

Cost
At start of year
Additions
Disposals
At end of year
Computers,
copiers
and faxes
Shs'000
Motor
vehicles
Shs'000
Furniture &
fittings
Shs'000
Office
equipment
Shs'000
Total
Shs'000
7,243
7,243
162,185
16,862
179,047
66,754
15,889
(33,823)
48,820
294,874
35,457
330,331
169,198
51,587
220,785
700,254
119,795
(33,823)
786,226
At start of year
Charge for the year
On disposal
7,243
-
145,485
13,767
-
48,081
9,693
(26,109)
161,000
33,724
-
113,300
33,252
-
475,109
90,436
(26,109)
At end of year
7,243
159,252
31,665
194,724
146,552
539,436
19,795
17,155
135,607
74,233
246,790
Depreciation
Net book value

121Imperial
17. CAPITAL WORK IN PROGRESS

2014
Shs'000
At start of year
Additions
Amount capitalised
At end of year
2013
Shs'000
GROUP BANK
2011
2012
Shs'000
Shs'000
2010
Shs'000
5,675
5,166
-
268,551
41,974
(304,850)
116,121
256,329
(103,899)
121,236
(5,115)
10,848
36,126
(46,974)
10,841
5,675
268,551
116,121
The ongoing work in progress as at 31 December 2014 relates to Garden City Mall Branch, Lunga Lunga Road Branch, Two Rivers Mall
Branch and the Westgate Branch.
18. INTANGIBLE ASSETS SOFTWARE COSTS
2014
Shs'000
2013
Shs'000
GROUP
2012
Shs'000
Cost
At start of year
Additions
307,364
141,221
-
272,552
31,967
2,845
192,032
83,201
(2,676)
133,309
58,723
-
84,726
48,583
-
At end of year
448,585
307,364
272,557
192,032
133,309
Amortisation
At start of year
Charge for the year
123,094
41,981
(198)
92,043
30,621
430
65,056
27,256
(268)
45,853
19,387
(184)
32,524
13,329
-
At end of year
164,877
123,094
92,044
65,056
45,853
Net book value
283,708
184,270
180,513
126,977
87,456
2011
Shs'000
2010
Shs'000
BANK
Cost
At start of year
Additions
251,290
137,890
224,900
26,390
144,257
80,643
133,309
10,948
84,726
48,583
At end of year
389,180
251,290
224,900
144,257
133,309
Amortisation
At start of year
Charge for the year
107,897
36,029
82,768
25,129
60,278
22,490
45,853
14,425
32,524
13,329
At end of year
143,926
107,897
82,768
60,278
45,853
Net book value
245,254
143,393
142,132
83,979
87,456

122
In the opinion of directors there is no impairment in the value of intangible assets. Amortisation costs on intangible assets are recognised
in other operating expenses under the statement of profit or loss.
19. DEFERRED TAX

Deferred tax is calculated on all temporary differences under the liability method using a principal tax rate of 30% (2013: 30%). The movement on the deferred tax account is as follows:
GROUP
2014
Shs'000
BANK
2014
Shs'000
At start of year
Profit or loss credit (Note 7)
Currency translation
273,262
63,703
(1,588)
176,008
16,096
-
At end of year
335,377
192,104
Deferred tax assets/(liabilities) and deferred tax charge/(credit) in the profit or loss are attributable to the following:
GROUP
Deferred tax assets

Provision for staff leave accrual
Provision on the remaining portfolio
General provision
Tax losses carried forward
Deferred tax liability
Intangible assets
Unrealised exchange gain
Net deferred tax asset
At start
of year
Shs'000
41,758
5,813
87,091
34,533
116,130
Charge/
(credit) to
profit or
loss
Shs'000
13,625
(1,408)
16,013
3,902
41,576
Currency
translation
Shs'000
At end of
year
Shs'000
(110)
-
55,273
4,405
103,104
38,344
156,319
(91)
(1,387)
357,445
285,325
(12,445)
382
273,262
73,708
(10,001)
(4)
63,703
(1,588)
(1,588)
(22,446)
378
335,377
63,666
5,813
10,332
(1,408)
73,998
4,405
87,091
31,883
16,013
1,161
103,104
33,044
188,453
26,098
214,550
(12,445)
(10,001)
(22,446)
176,008
16,097
192,104
BANK
Deferred tax assets
Provision on the remaining portfolio
General provision
Intangible assets

123Imperial
19. DEFERRED TAX
GROUP
2013
Shs'000
BANK
2013
Shs'000
At start of year
207,874
61,723
3,665
142,663
33,344
-
At end of year
273,262
176,007
GROUP
Deferred tax assets

General provision on loans
General provision
At start
of year
Shs'000
Charge/
(credit) to
profit or
loss
Shs'000
Currency
translation
Shs'000
At end of
year
Shs'000
32,472
3,630
61,494
37,493
86,746
10,414
2,183
25,597
(2,997)
24,737
(1,128)
37
4,647
41,758
5,813
87,091
34,533
116,130

Intangible assets
221,835
(7,448)
(6,513)
207,874
59,934
(4,997)
6,786
61,723
3,556
109
3,665
285,325
(12,445)
382
273,262
53,215
3,630
61,494
31,772
150,111
10,451
2,183
25,597
111
38,342
63,666
5,813
87,091
31,883
188,453
(7,448)
(4,997)
(12,445)
142,663
33,345
176,008
BANK
Deferred tax assets
General provision
Intangible assets

124
19. DEFERRED TAX
GROUP
2012
Shs'000
BANK
2012
Shs'000
At start of year
184,123
23,752
133,659
9,003
At end of year
207,874
142,662
GROUP
Deferred tax assets

General provision
Intangible assets
At start
of year
Shs'000
Charge/
(credit) to
profit or
loss
Shs'000
At end of
year
Shs'000
28,480
4,144
46,528
39,900
69,952
189,004
3,992
(515)
17,255
(4,696)
16,795
32,831
32,472
3,629
63,783
35,204
86,747
221,835
(3,243)
(1,639)
(4,205)
(4,874)
(7,448)
(6,513)
184,122
23,752
207,874
48,619
4,144
44,239
39,900
136,902
4,596
(514)
17,255
(8,128)
13,209
53,215
3,630
61,494
31,772
150,111
(3,243)
(4,205)
(7,448)
133,659
9,004
142,664
BANK
Deferred tax assets
General provision
Intangible assets

125 Imperial
19. DEFERRED
At start of year
Profit or loss charge (Note 7)
At end of year
GROUP
Deferred tax assets

General provision
GROUP
2011
Shs'000
BANK
2011
Shs'000
98,522
85,600
98,522
35,137
184,122
133,659
At start
of year
Shs'000
Charge/
(credit) to
profit or
loss
Shs'000
At end of
year
Shs'000
40,050
3,047
32,860
24,022
99,979
(11,571)
1,097
13,668
15,878
69,952
89,025
28,480
4,144
46,528
39,900
69,952
189,005

Intangible assets
(1,458)
-
(1,786)
(1,639)
(3,243)
(1,639)
98,522
85,600
184,122
40,050
3,047
32,860
24,022
99,979
8,568
1,097
11,379
15,878
36,922
48,619
4,144
44,239
39,900
136,902

Intangible assets
(1,458)
(1,785)
(3,243)
98,522
35,137
133,660
BANK
Deferred tax assets
General provision

126
19. DEFERRED TAX
GROUP &
BANK 2010
Shs'000
At start of year
Credit to profit or loss (Note 7)
(Charge) to other comprehensive
income
75,121
23,401
-
At end of year
98,522
19. DEFERRED -GROUP & BANK
Charge/
(credit) to
profit or
loss
Shs'000
At start
of year
Shs'000
At end of
year
Shs'000
Deferred tax assets

General provisions
Intangible assets

127 Imperial
34,541
2,752
37,828
75,121
5,509
295
19,055
20,227
40,050
3,047
56,883
99,980
(1,458)
(1,458)
71,121
23,401
98,552
20. CUSTOMER DEPOSITS
2014
Shs'000
2013
Shs'000
GROUP
2012
Shs'000
1,390,257
11,603,496
1,030,895
25,901,303
14,308,777
54,234,728
578,588
8,887,417
843,289
16,877,911
12,457,323
39,644,528
45,041,478
9,162,126
31,123
54,234,728
32,091,652
7,352,946
199,929
39,644,528
2011
Shs'000
2010
Shs'000
262,553
7,970,793
668,515
12,464,088
9,337,800
30,703,749
209,255
6,167,510
505,027
9,172,046
4,544,400
20,598,239
99,130
4,777,880
354,304
5,482,579
2,964,447
13,678,340
26,725,872
3,788,983
188,894
30,703,750
17,006,769
3,502,770
88,700
20,598,239
11,345,798
2,279,210
53,332
13,678,340
CUSTOMER DEPOSITS
Call deposits
Current and demand accounts
Savings accounts
Term deposits
Foreign currency deposits
Analysis of customer deposits by maturity:
Payable within 90 days
Payable after 90 days and within one year
Payable after one year
CUSTOMER DEPOSITS
Call deposits
Savings accounts
Term deposits
Foreign currency deposits
BANK
1,390,257
10,742,754
975,408
24,822,613
9,216,780
47,147,812
578,588
8,187,582
813,857
15,780,822
8,704,118
34,064,967
262,553
7,509,098
653,187
11,848,158
7,308,365
27,581,361
209,256
5,917,245
502,529
8,876,939
3,738,733
19,244,702
99,130
4,777,880
354,304
5,482,579
2,964,447
13,678,340
41,620,437
5,510,790
16,585
29,169,360
4,891,355
4,252
24,596,478
2,973,465
11,418
15,938,646
3,217,356
88,700
11,345,798
2,279,210
53,332
47,147,812
34,064,967
27,581,361
19,244,702
13,678,340
Analysis of customer deposits by maturity:

Payable within 90 days
Payable after 90 days and within one year
Payable after one year

128

129Imperial
Non private institutions

and individuals
Private companies
Insurance companies
Hire purchase companies
20. Concentration
Non private institutions

and individuals
Private companies
Insurance companies
Hire purchase companies
20. Concentration
2012
Shs'000
21,948,939
5,360,964
267,166
4,292
27,581,361
100%
2013
%
71%
27%
2%
0%
100%
39,644,528
BANK
2013
Shs'000
24,062,184
9,307,471
694,949
363
34,064,967
100%
2014
%
72%
26%
2%
0%
100%
2014
Shs'000
33,875,401
12,491,727
780,296
388
47,147,812
28%
3%
0%
30,703,750
6,685,898
500,475
4,292
23,513,084
54,234,728
11,235,716
1,282,068
363
68%
28%
3%
0%
27,126,381
15,286,367
1,581,430
388
2012
Shs'000
69%
2013
%
37,366,543
GROUP
2013
Shs'000
2014
%
2014
Shs'000
28%
0%
0%
72%
2011
%
13,678,340
28%
0%
0%
5,442,259
14,009
326
19,244,702 100%
11%
1%
0%
58%
3,858,311
32,407
311
72%
13,788,108
47%
9,787,311
2011
%
GROUP
2010
Shs'000
13,678,340
3,858,311
32,407
311
9,787,311
GROUP
2010
Shs'000
2011
Shs'000
20,598,239 100%
5,977,785
23,333
326
14,596,795
2011
Shs'000
2012
%
100%
22%
2%
0%
77%
2012
%
25%
7%
0%
0%
18%
2010
%
25%
18%
7%
0%
0%
2010
%
20. Concentration
Economic sector risk concentrations within the loans and advances portfolio are as follows:
21. DEPOSITS DUE TO OTHER

BANKING INSTITUTIONS
Overnight borrowings
Term deposits

Overnight borrowings
Term deposits
22. OTHER LIABILITIES

Outstanding bankers cheques
Staff leave accrual
Sundry creditors
2013
Shs'000
GROUP
2012
Shs'000
2011
Shs'000
2010
Shs'000
478,948
179,932
1,243,588
182,312
1,503,328
933,411
360,356
987,999
700,728
107,457
769,959
1,487,749
200,007
1,961,017
1,902,468
2,619,051
2,049,083
2,365,165
2,161,024
478,948
1,046,431
191,096
1,400,471
977,257
BANK
360,356
1,060,180
593,450
107,457
721,029
1,387,711
200,007
1,961,017
1,525,379
2,568,824
2,013,986
2,216,197
2,161,024
GROUP
2012
Shs'000
2011
Shs'000
2010
Shs'000
2014
Shs'000
2014
Shs'000
2013
Shs'000
171,841
14,681
445,970
182,926
19,375
721,449
143,480
11,050
374,427
94,185
13,814
308,467
130,935
10,158
282,737
632,492
923,750
528,957
416,466
423,830
Other liabilities are expected to be settled within no more than 12 months after reporting date.
2014
Shs'000
Outstanding bankers cheques
Staff leave accrual
Sundry creditors
23. SHARE CAPITAL

At start and end of year
GROUP
2012
Shs'000
2011
Shs'000
2010
Shs'000
168,126
14,681
249,125
178,851
19,375
352,500
141,072
12,099
285,064
93,901
13,814
301,958
130,935
10,158
232,085
431,932
550,726
438,235
409,673
373,178
2014
Shs'000
1,248
2014
Shs'000
At start and end of year
2013
Shs'000
1,248,400
BANK No. of ordinary shares

2012
2011
2013
Shs'000
Shs'000
Shs'000
1,248
1,248
Issued and paid up capital

2012
2013
Shs'000
Shs'000
1,248,400
1,248,400
1,248
2010
Shs'000
1,248
2011
Shs'000
2010
Shs'000
1,248,400
1,248,400

130
24. CASH AND CASH EQUIVALENTS
2014
Shs'000
2013
Shs'000
GROUP
2012
Shs'000
2011
Shs'000
537,462
710,067
725,682
570,369
95,242
486,784
606,489
440,471
337,638
302,343
718,281
1,504
581,573
423,714
-
413,911
764,059
113,270
317,581
1,453,412
2,819,446
(1,902,468)
3,304,100
3,956,718
(2,619,051)
3,254,121
3,900,728
(2,049,083)
3,349,513
2,052,164
(2,365,165)
1,026,708
657,911
(2,161,024)
955,586
2014
Shs'000
2013
Shs'000
BANK
2012
Shs'000
2011
Shs'000
455,056
710,067
497,261
95,242
545,639
440,471
257,140
718,281
581,573
181,750
176,472
700,000
100,000
9,902
1,120,000
1,438,017
(1,525,379)
1,774,565
(2,568,824)
2,859,867
(2,013,986)
1,479,887
(2,216,197)
643,625
(2,161,024)
1,254,233
498,244
1,931,989
249,013
365,924
2010
Shs'000
For the purposes of the cash flow statement, cash and

cash equivalents comprise the following:
Cash in hand
Balances with Central Bank of Kenya (Note 10)
Balances with Central Bank of Uganda (Note 10)
Government securities maturing within 91 days from
Placements with and loans and advances to
other banking institutions (Note 12)
Deposits due to other banking institutions (Note 21)
24. CASH AND CASH EQUIVALENTS
2010
Shs'000
For the purposes of the cash flow statement, cash and

cash equivalents comprise the following:
Cash in hand
Balances with Central Bank of Kenya (Note 10)
Government securities maturing within 91 days from
other banking institutions (Note 12)
Deposits due to other banking institutions (Note 21)

131Imperial
25. OFF BALANCE SHEET FINANCIAL INSTRUMENTS,

CONTINGENT LIABILITIES AND COMMITMENTS
In common with banking business, the Group conducts business involving acceptances, guarantees, performance bonds and letters of
guarantees. The majority of these facilities are offset by corresponding obligations from third parties.
2014
Shs'000
2013
Shs'000
GROUP
2012
Shs'000
2011
Shs'000
2010
Shs'000
1,175,273
4,342,645
1,705,626
17,773
42,600
2,086,305
3,209,894
1,691,131
36,575
42,600
2,449,479
2,620,393
2,067,046
20,148
48,400
893,194
2,308,994
887,570
49,353
47,100
848,852
1,540,018
454,344
68,876
7,304
7,283,917
7,066,505
7,205,466
4,186,212
2,919,394
2014
Shs'000
2013
Shs'000
BANK
2012
Shs'000
2011
Shs'000
2010
Shs'000
1,175,273
4,035,048
1,705,326
17,773
42,600
2,086,305
2,753,180
1,691,131
36,575
42,600
2,449,479
2,330,263
2,067,046
20,148
48,400
893,194
2,159,958
887,570
49,353
47,100
848,852
1,540,018
454,344
68,876
7,304
6,976,020
6,609,791
6,915,336
4,037,176
2,919,394
Contingent liabilities
Letters of credit
Letters of guarantees
Acceptances
Bills sent for collection
Client treasury bonds
Letters of credit
Letters of guarantees
Acceptances
Bills sent for collection
Client treasury bonds
An acceptance is an undertaking by a bank to pay a bill of exchange on a specified due date. The Group expects most acceptances to be
presented and reimbursement by the customer is normally immediate. Letters of credit commit the Group to make payments to third
parties on production of credit compliant documents which are subsequently reimbursed by customers.
Guarantees are generally written by a bank to support the performance of a customers' to third parties. The Group will only be required
to meet these obligations in the event of the customers default.
Based on the estimate of the financial effect of the contingencies and the corresponding obligations from third parties, no loss is anticipated.
The Group is also party to other ongoing legal disputes, which in the opinion of the directors based on legal advise are not expected to
individually or in aggregate result in material liabilities to the Group.

132
Commitments
Undrawn formal stand-by facilities, credit lines and
other commitments to lend
Commitments
Undrawn formal stand-by facilities, credit lines and
other commitments to lend
2014
Shs'000
4,174,284
2014
Shs'000
3,532,947
2013
Shs'000
4,102,500
2013
Shs'000
3,022,834
GROUP
2012
Shs'000
1,760,276
BANK
2012
Shs'000
1,647,275
2011
Shs'000
2010
Shs'000
1,381,424
2,111,398
2011
Shs'000
2010
Shs'000
1,364,011
2,111,398
Capital Commitments
There were no capital expenditure contracted as at the date of this report.
Operating Lease
Commitment
-GROUP
2011
Shs'000
2010
Shs'000
2013
Shs'000
2012
Shs'000
331,469
913,408
122,734
272,679
894,874
22,083
171,847
397,416
15,897
211,986
602,874
49,998
106,045
324,531
33,415
1,367,611
1,189,636
585,159
864,858
463,991
2013
Shs'000
2012
Shs'000
269,983
729,245
122,734
225,852
754,394
22,083
136,733
292,866
15,897
174,998
454,922
49,998
106,045
324,531
33,415
1,121,962
1,002,329
445,496
679,918
463,991
2014
Shs'000
The future minimum lease payments under

non-cancellable operating leases are as follows:
-not later than 1 year
later than 1 year and not later than 5 years
- later than 5 years
Operating Lease
Commitment
-BANK
2014
Shs'000
2011
Shs'000
2010
Shs'000
The future minimum lease payments under

non-cancellable operating leases are as follows:
-not later than 1 year
later than 1 year and not later than 5 years
- later than 5 years
The directors are of the view that future net revenues and funding will be sufficient to cover these commitments

133 Imperial
26. FINANCIAL RISK MANAGEMENT
The Groups activities expose it to a variety of financial risks and
those activities involve analysis, evaluation, acceptance and
management of some degree of risk or combination of risks.
Taking risk is core to the financial business, and the operational
risks are an inevitable consequence of being in business. The
Groups aim is therefore to achieve an appropriate balance
between risk and return and minimise potential adverse effects
on the groups financial performance.
The groups risk management policies are designed to identify and
analyse these risks, to set appropriate risk limits and controls, and
to monitor the risks and adherence to limits by means of reliable
and up-to-date management information systems. The Group
regularly reviews its risk management policies and systems to
reflect changes in markets, products and emerging best practice.
Risk management is carried out by the Group's treasury and
credit department under policies approved by the Board of
Directors. The Group's treasury and credit departments identify,
evaluate and mitigate financial risks in close co-operation with
various other departmental heads. The Board provides written
principles for overall risk management, as well as written policies
covering specific areas, such as credit risk, market risk, liquidity risk
and operational risk.
In addition, the internal audit department is responsible for the
independent review of risk management and the overall control
environment. The most important types of risk are credit risk,
liquidity risk, market risk and operational risk. Market risk includes
currency risk, interest rate and other price risk.
Credit risk
The Group takes on exposure to credit risk, which is the risk that
a customer will cause a financial loss for the Group by failing to
fulfil a contractual obligation. Credit risk is the most important risk
for the Groups business. Management therefore carefully
manages its exposure to credit risk. Credit risk mainly arises from
customer loans and advances, credit cards, investing activities and
loan commitments (off balance sheet financial instruments).
The credit risk management and control are centralised in credit
and treasury departments of the Group.
-Measurement of credit risk
Loans and advances
In measuring credit risk of loans and advances to customers, the
Group reflects on various components. These include:
- the probability of default by the borrower/client on their
contractual obligations;
- current exposures on the borrower/client and the likely future

development, from which the Group derives the exposure at
default; and
- the likely recovery ratio on the defaulted obligations.
These credit risk measurements, which reflect expected loss, are
embedded in the Groups daily operational management. The
operational measurements can be contrasted with impairment
allowances required under IAS 39 and the Banking Act which are
based on losses that have been incurred at the date of this report
rather than expected losses.
The Group assesses the probability of default of individual
borrower/client using internal rating methods tailored to the
various categories of the borrower/client. These have been
developed and combine statistical analysis with the credit department's judgment and are validated, where appropriate, by
comparison with externally available data.
Management assesses the credit quality of the customer, taking
into account their financial position, past experience and other
factors.
Individual limits are set based on internal or external information
in accordance with limits set by the management. The utilisation
of credit limits is regularly monitored. Corrective action is taken
where necessary.
Investments
For investments, internal ratings taking into account the requirements of the Banking Act are used by the Group for managing the
credit risk exposures. The investments in those securities are
viewed as a way to gain a better credit quality mapping and
maintain a readily available source to meet the funding requirement at the same time.
-Risk limit control and mitigation policies
The Group manages, limits and controls concentrations of credit
risk wherever they are identified. The Group structures the levels
of credit risk it undertakes by placing limits on the amount of risk
accepted in relation to one borrower, or group's of borrowers,
and to industry segments. Such risks are monitored on a revolving
basis and subject to an annual or more frequent review, when
considered necessary. Limits on the level of credit risk by product
and industry sector are approved as and when required by the
credit committee.
Exposure to credit risk is also managed through regular analysis of
the ability of borrowers and potential borrowers to meet interest
and capital repayment obligations and by changing these lending
limits where appropriate. Some other specific control and
mitigation measures are outlined below:
134
Collateral
The Group employs a range of policies and practices to mitigate
credit risk. The most common one is to obtain collateral for loans
and advances to customers. The types of collateral obtained
include:
Mortgages over properties;
Charges over business assets such as land and buildings, inven
tory and receivables;
Charges over financial instruments such as investments:
Deposits placed under lien.
Credit-related commitments
The primary purpose of these instruments is to ensure that funds
are available to a customer as required. Guarantees and Letters
of Credit carry the same credit risk as loans. Letters of credit
(which are written undertakings by the Group on behalf of a
customer authorising a third party to draw drafts on the Group
up to a stipulated amount under specific terms and conditions)
are collateralised by the underlying shipments of goods to which
they relate and therefore carry less risk than a direct advance or
loan.
Commitments to extend credit represent unused portions of
authorisations to extend credit in the form of loans, guarantees or
letters of credit. With respect to credit risk on commitments to
extend credit, the Group is potentially exposed to loss in an
amount equal to the total unused commitments. However, the
likely amount of loss is less than the total unused commitments,
as most commitments to extend credit are contingent upon
customers maintaining specific credit standards. The Group monitors the term to maturity of credit commitments because
longer-term commitments generally have a greater degree of
credit risk than shorter-term commitments.
- Impairment and provisioning policies
The Group's internal and external systems focus more on creditquality mapping from the inception of the lending of the loan or
advance. In contrast, impairment provisions are recognised for
financial reporting purposes only for losses that have been
incurred at the date of this report based on objective evidence of
impairment
The impairment provision shown in the statement of financial
position at the year-end is derived after taking various factors into
consideration as described in accounting policy (l). The Group's
management uses the basis under IAS 39- 'Financial instruments:
Recognition and Measurement' and the Prudential Guidelines to
determine the amount of impairment.

135 Imperial
The management is confident in its ability to continue to control

and sustain minimal exposure of credit risk to the Group resulting
from both its loan and advances portfolio and other financial
assets based on the following:
The maximum exposure to credit risk arises from loans and
advances to customers which form 55.85% (2013: 60.55%, 2012:
58.59%, 2011: 59.22%, 2010: 58%) of total financial assets; 25.20%
(2013: 22.93%, 2012: 25.56%, 2011: 28.59%, 2010: 28%) represents investments in government securities).
94.11% (2013: 93.70%, 2012: 95.24%, 2011: 94.69%, 2010:
93.38%) of the loans and advances portfolio is categorised in the
top two grades of the internal rating system (Normal and Watch).
17.79% (2013: 16.16%, 2012: 26.13%, 2011: 23.11%, 2010: 16%)
of the loans and advances portfolio are considered to be past due
but not impaired (note 13).
Most of its loans and advances to customers are performing as
per the covenants and the non-performing ones have been
provided for. The loans and advances are also secured.
Cash in hand, balances with Central Bank of Kenya and placements with other banking institutions are held with sound financial
institutions.
Government securities are considered stable investments and
the risk is considered negligible.
Management considers the historical information available to
assess the credit risk on investment securities.
Exposure to this risk has been quantified in each financial asset
note in the financial statements along with any concentration of
risk.
Market Risk
Market risk is the risk that changes in the market prices, which
includes currency exchange rate and interest rates, will affect the
fair value or future cash flows of financial instruments. Market risk
arises from open positions in interest rates and foreign currencies,
both of which are exposed to general and specific market
movements and changes in the level of volatility. The objectives of
market risk management are to manage and control market risk
exposures within acceptable limits, while optimising on the return
on risk. Overall management of market risk rests with the Assets
and Liability Committee (ALCO)
The treasury department is responsible for the development of
detailed risk management policies, subject to review and approval
by ALCO, and for the day to day implementation of these
policies. Market risks arise mainly from trading and non-trading
activities.
which includes applying possible stress events to specific positions

or regions - for example the stress outcome to a region following
currency peg break. The results of the stress tests are reviewed by
senior management in each business unit. The stress test is tailored
to the business and typically uses scenario analysis.
Trading portfolios include those positions arising from marketmaking transactions where the Group acts as a principal with
clients or with the market
Operational risk
Operational risk is the risk of direct or indirect loss arising from a
wide variety of causes associated with the Group's processes,
personnel, technology and infrastructure and from external factors
other than credit, market and liquidity risks such as those arising out
of legal and regulatory requirements and generally accepted
standards of corporate behaviour. Operational risk arises from the
Group's operations and is faced by all other business entities.
The Group endeavours to manage the operational risk by creating
a balance between avoidance of cost or financial losses and damage
to the Group's reputation within overall cost effectiveness and to
avoid control procedures that restrict creativity and initiative. The
key responsibility for development policies and programs to implement the Group's operational risk management is with the senior
management of the Group. The above is achieved by development
of overall standards for the Group to manage the risk in the
following areas:
Non-trading portfolios primarily arise from the interest rate

management of the entitys retail and commercial banking assets
and liabilities. Non-trading portfolios also consist of foreign
exchange and equity risks arising from the Group's available-forsale investments.
The major measurement techniques used to measure and
control market risk are outlined below :
- ALCO review
ALCO meets on a adhoc basis to review the following:
A summary of the Group's aggregate exposure on market risk
A summary of the Group's maturity/repricing gaps
A report indicating that the Group is in compliance with the
board's set exposure limits
A comparison of past forecast or risk estimates with actual
results to identify any shortcomings
- Review by the treasury department
The treasury department monitors foreign exchange risk in close
collaboration with the board of directors. Regular reports are
prepared by the treasury department of the bank and discussed
with the board of directors.
Some of these reports include:
Net overnight positions by currency
Maturity distribution by currency of the assets and liabilities for
both on and off balance sheet items
Outstanding contracts (if any) by settlement date and currency
Total values of contracts, spots and futures
Aggregate dealing limits
Exceptional reports for example limits or line excesses
- Stress test
Stress test provides an indication of the potential size of losses
that could arise in extreme conditions. The stress tests carried
out by the treasury department include: risk factor, stress testing
where stress movements are applied to each risk category,
emerging market stress testing, where emerging market portfolios
are subject to stress movements and adhoc stress testing,
business entities,
1) Segregation of duties including independent authorisation of

transactions
2) Monitoring and reconciliation of transactions
3) Compliance to regulatory and legal requirement
4) Documentation of control and procedure
5) Assessment of the operational risk on a periodic basis to address
the deficiencies observed, if any
6) Reporting of operational losses and initiation of remedial action
7) Development of contingency plans
8) Giving training to staff to improve their professional competency
9) Ethical and business standards
10) Obtaining insurance wherever feasible, as a risk mitigation
measure.
Compliance of Group's standards is supported by periodic reviews
undertaken by Internal Audit. The observations of the Internal
Audit is discussed with the management of the Group and the
summaries are submitted to the Audit Committee of the Board.
- Risk measurement and control
Interest rate, currency, credit, liquidity and other risks are actively
managed by management to ensure compliance with the Groups
risk limits. The Groups risk limits are assessed regularly to ensure
their appropriateness given its objectives and strategies and current
market conditions. A variety of techniques are used by the Group
in measuring the risks inherent in its trading and non-trading
positions.
136
27. CURRENCY RISK

The group operates within Kenya and Uganda and its inancial assets and inancial liabilities are reported in the local currency. It conducts trade with correspondent banks and takes deposits and lends in other currencies. The Groups currency position and exposure
are managed within the exposure guideline of 10% of the core capital as stipulated by the Central Bank of Kenya. This position is
reviewed on a daily basis by the management. This represents an exposure to currencies other than Kenya and Uganda Shillings.
AT 31 DECEMBER 2014 - GROUP
US $
Shs 000
GB
Shs 000
Cash and bank balances

Balances with banks abroad
Other assets
458,043
224,938
11,423,433
100,829
44,604
224,386
316,450
457
94,970
641,544
871,192
1,994
Total assets
12,207,243
585,897
Balances due to banks abroad

Customer deposits
Other liabilities
926,889
12,170,946
140,727
Total liabilities
Net balance sheet position
Assets
Euros Indian Rupees

Shs 000
Shs 000
S.A. Rand
Shs 000
Others
Shs 000
Total
Shs 000
12,786
-
5
16,382
-
3,481
65,283
-
601,103
1,185,319
12,611,075
103,280
1,609,700
12,786
16,387
68,764
14,500,777
44
552,897
21,047
2,494
1,510,560
7,225
12,603
-
589
150,455
-
930,016
14,397,461
176,247
13,238,562
573,988
1,520,279
12,603
151,067
15,503,724
(1,031,319)
11,909
89,421
12,786
3,784
(82,303)
(1,002,947)
5,113,811
120,270
606,816
(604)
19,140
5,859,433
Liabilities
Off balance sheet net

notional position
137

US $
Shs 000
GB
Shs 000
Euros
Shs 000
Rupees
Shs 000
S.A. Rand
Shs 000
Others
Shs 000
Total
Shs 000
783,273
1,079,474
9,215,994
34,631
21,025
47,274
551,260
2,256
68,015
686,253
767,259
40,442
5,237
-
269
1,874
-
6,395
183,674
159
48,753
878,977
2,003,786
10,534,672
126,082
11,113,372
621,815
1,561,969
5,237
2,143
238,981
13,543,518

Customer deposits
Other liabilities
665,240
10,172,664
25,484
44
588,759
76,061
889
1,544,073
1,373
1,372
-
352
150,455
-
666,526
12,457,323
102,918
Total liabilities
10,863,388
664,864
1,546,335
1,372
150,807
13,226,767
249,984
(43,049)
15,635
5,237
771
88,174
316,751
5,596,268
231,351
606,822
53
8,037
6,442,531
Assets

Other assets
Total assets
Liabilities

notional position

138
US $
Shs 000
GB
Shs 000
Euros
Shs 000
Indian
Rupees
Shs 000
S.A. Rand
Shs 000
Uganda
Shillings
Shs 000
Others
Shs 000
Total
Shs 000

Other assets
967,479
1,291,717
5,741,920
388,979
23,067
173,729
318,423
3,600
159,599
816,960
657,475
1,882
5,662
-
491
1,334
-
2,564
1,465
-
3,946
30,512
-
1,157,146
2,321,379
6,717,818
394,461
Total assets
8,390,095
518,819
1,635,916
5,662
1,825
4,029
34,458
10,590,804

Customer deposits
Other liabilities
626,856
7,186,693
105,222
504,804
1,319
1,621,291
911
1,076
-
29,488
274
-
583
23,662
-
656,927
9,337,800
107,452
Total liabilities
7,918,771
506,123
1,622,202
1,076
29,762
24,245
10,102,179
471,324
12,696
13,714
5,662
749
(25,733)
10,213
488,625
5,137,111
231,351
606,822
8,037
5,983,321
US $
Shs 000
GB
Shs 000
Euros
Shs 000
Indian
Rupees
Shs 000
S.A. Rand
Shs 000
Uganda
Shillings
Shs 000
Others
Shs 000
Total
Shs 000

Other assets
496,982
416,726
2,654,683
21,045
61,938
124,147
166,969
1,576
126,059
525,594
419,077
1,524
2,632
-
245
2,356
-
115
-
2,979
29,681
84
-
688,318
1,101,135
3,240,813
24,145
Total assets
3,589,435
354,630
1,072,254
2,632
2,601
115
32,744
5,054,411
Liabilities
Customer deposits
Other liabilities
490,744
3,172,941
63,436
357,778
1,307
1,035
1,026,950
-
1,252
-
282
1,117
-
688
16,741
-
492,749
4,576,779
64,743
Total liabilities
3,727,122
359,085
1,027,985
1,252
1,398
17,429
5,134,270
(137,686)
(4,455)
44,269
2,632
1,349
(1,283)
15,315
(79,859)

notional position
2,484,129
135,820
217,440
356
2,019
7,714
2,847,478
Assets
Liabilities

notional position
Assets
139

US $
Shs 000
GB
Shs 000
S.A. Rand
Shs 000
Others
Shs 000

Other assets
94,744
372,843
1,511,402
58,027
11,415
592
50,978
375,151
35,388
25,207
299,171
534,019
5,008
-
214
2,013
-
2,793
19,145
145
-
144,554
424,809
1,861,697
967,197
Total inancial assets
2,037,016
438,137
893,786
5,008
2,227
22,083
3,398,257

Customer deposits
Other liabilities
1,641,226
77,278
1,962
434,355
1,181
879,482
2,174
37
-
9,347
-
1,962
2,964,447
80,634
Total inancial liabilities
1,718,504
437,499
881,656
37
9,347
3,047,043
318,512
638
12,129
5,008
2,190
12,736
351,213
1,944,101
147,886
88,977
400
109
12,530
2,194,003
US $
Shs 000
GB
Shs 000
Euros Indian Rupees

Shs 000
Shs 000
S.A. Rand
Shs 000
Others
Shs 000

Other assets
332,675
8,258
7,605,120
29,271
41,027
193,692
316,450
457
61,630
630,724
871,192
1,994
12,786
-
5
16,382
-
2,182
63,051
-
437,519
924,893
8,792,762
31,722
Total assets
7,975,324
551,626
1,565,540
12,786
16,387
65,233
10,186,896
Balances due to banking institutions

Customer deposits
Other liabilities
797,043
7,160,147
102,069
44
518,920
21,047
2,494
1,466,883
7,225
12,603
-
48,450
23
799,581
9,207,003
130,364
Total liabilities
8,059,259
540,011
1,476,602
12,603
48,473
10,136,948
(83,935)
11,615
88,938
12,786
3,784
16,760
49,948
4,770,111
120,270
606,816
(604)
19,140
5,515,733
Financial assets
Euros Indian Rupees

Shs 000
Shs 000
Total
Shs 000
Financial liabilities

notional position
AT 31 DECEMBER 2014 - BANK
Total
Shs 000
Assets
Liabilities

notional position

140
US $
Shs 000
GB EurosRupees
Shs 000
Shs 000
S.A. Rand
Shs 000
Others
Shs 000
Shs 000
Total
Shs 000
Assets
Other assets
62,384
603,542
6,534,350
27,429
19,324
45,260
551,260
2,256
65,535
684,932
767,259
40,442
5,237
-
269
1,874
-
5,096
181,442
159
48,753
152,608
1,522,287
7,853,028
118,880
Total assets
7,227,705
618,100
1,558,168
5,237
2,143
235,450
9,646,804

Customer deposits
Other liabilities
535,394
6,427,181
76,061
44
587,600
1,373
889
1,540,654
-
1,372
-
352
147,310
-
536,680
8,704,117
77,434
Total liabilities
7,038,636
589,017
1,541,543
1,372
147,663
9,318,231
189,069
29,083
16,626
5,237
771
87,787
328,573
5,056,769
231,351
606,822
53
8,037
5,903,032
US $
Shs 000
GB
Shs 000
Euros Indian Rupees

Shs 000
Shs 000
S.A. Rand
Shs 000
Others
Shs 000

Other assets
501,323
935,993
4,094,402
382,582
22,256
171,526
318,423
3,600
158,207
816,654
657,475
1,882
5,662
-
491
1,334
-
3,946
29,995
-
686,224
1,961,164
5,070,300
388,064
Total assets
5,914,300
515,805
1,634,218
5,662
1,825
33,941
8,105,752

Customer deposits
Other liabilities
558,042
5,159,061
97,541
504,301
1,319
1,620,265
911
1,076
-
583
23,662
-
558,625
7,308,365
99,771
Total liabilities
5,814,644
505,620
1,621,176
1,076
24,245
7,966,761
99,656
10,185
13,042
5,662
749
9,696
138,991
5,056,769
231,351
606,822
53
8,037
5,903,032
Liabilities

notional position
Total
Shs 000
Assets
Liabilities

notional position
141

AT 31 DECEMBER 2011- BANK
US $
Shs 000
GB
Shs 000
S.A. Rand
Shs 000
Others
Shs 000

Other assets
266,263
327,912
2,156,172
20,705
61,209
122,030
166,969
1,576
125,243
524,304
419,077
1,524
2,632
-
245
2,356
-
2,979
29,681
84
-
455,939
1,008,915
2,742,302
23,805
Total assets
2,771,052
351,784
1,070,148
2,632
2,601
32,744
4,230,961

Customer deposits
Other liabilities
483,723
2,339,916
63,291
357,419
1,307
1,026,042
-
1,252
-
16,741
-
483,723
3,741,370
64,598
Total liabilities
2,886,930
358,726
1,026,042
1,252
16,741
4,289,691
(115,878)
(6,942)
44,106
2,632
1,349
16,003
(58,730)

notional position
2,453,967
135,820
217,440
356
2,019
7,714
2,817,316
US $
Shs 000
GB
Shs 000
Euros Indian Rupees

Shs 000
Shs 000
S.A. Rand
Shs 000
Others
Shs 000

Other assets
94,744
372,843
1,511,402
58,027
11,415
592
50,978
375,151
35,388
25,207
299,171
534,019
5,008
-
214
2,013
-
2,793
19,145
145
-
144,554
424,809
1,861,697
967,197
Total inancial assets
2,037,016
438,137
893,786
5,008
2,227
22,083
3,398,257
Financial liabilities
Customer deposits
Other liabilities
1,641,226
77,278
1,962
434,355
1,181
879,482
2,174
37
-
9,347
-
1,962
2,964,447
80,634
Total inancial liabilities
1,718,504
437,499
881,656
37
9,347
3,047,043
318,512
638
12,129
5,008
2,190
12,736
351,213
1,944,101
147,886
88,977
400
109
12,530
2,194,003
Assets
Euros Indian Rupees

Shs 000
Shs 000
Total
Shs 000
Liabilities

Total
Shs 000
Financial assets

notional position

142
Foreign exchange risk sensitivity
The table below summarises the effect on post-tax proit had the Kenya Shilling weakened by 10% against each currency, with all
other variables held constant. If the Kenya shilling strengthened against each currency, the effect would have been the opposite.
GROUP Year 2014
Effect on proit increase
US $
Shs 000
GB
Shs 000
Euros
Shs 000
Other
Currencies
Shs 000
Total
Shs 000
(72,192)
834
6,259
(4,601)
(69,700)
US $
Shs 000
GB
Shs 000
Euros
Shs 000
Other
Currencies
Shs 000
Total
Shs 000
17,499
(3,013)
1,094
6,593
22,173
US $
Shs 000
GB
Shs 000
Euros
Shs 000
Other
Currencies
Shs 000
Total
Shs 000
32,993
889
960
(638)
34,204
Total
Shs 000
Year 2013

Year 2012
Year 2011
US $
Shs 000
GB
Shs 000
Euros
Shs 000
Other
Currencies
Shs 000
(9,638)
(312)
3,099
1,261
(5,590)
US $
Shs 000
GB
Shs 000
Euros
Shs 000
Other
Currencies
Shs 000
Total
Shs 000
22,296
45
849
1,395
24,585
US $
Shs 000
GB
Shs 000
Euros
Shs 000
Other
Currencies
Shs 000
Total
Shs 000
(5,875)
813
6,226
2,333
3,496
US $
Shs 000
GB
Shs 000
Euros
Shs 000
Other
Currencies
Shs 000
Total
Shs 000
13,235
2,036
1,164
6,566
23,000

Year 2010

BANK Year 2014

Year 2013
143

BANK Year 2012
US $
Shs 000
GB
Shs 000
Euros
Shs 000
Other
Currencies
Shs 000
Total
Shs 000
6,976
713
913
1,128
9,729
US $
Shs 000
GB
Shs 000
Euros
Shs 000
Other
Currencies
Shs 000
Total
Shs 000
(8,111)
(486)
3,087
1,399
(4,111)
US $
Shs 000
GB
Shs 000
Euros
Shs 000
Other
Currencies
Shs 000
Total
Shs 000
22,296
45
849
1,395
24,585
Year 2011

Year 2010

144
28. INTEREST RATE RISK

The Group is exposed to various risks associated with the effects of luctuation in the prevailing levels of market interest rates on its
inancial position and cash lows. The management closely monitors the interest rate trends to minimise the potential adverse impact
of interest rate changes. The table below summarises the exposure to interest rate risk at the date of this report. Included in the table are the assets and liabilities at carrying amounts, categorised by the earlier of contractual repricing or maturity dates. The Group
does not have any derivative inancial instruments. The Group does not bear an interest rate risk on off balance sheet items.
AT 31 DECEMBER 2014- GROUP
Upto
1 month
Shs000
1-3
months
Shs000
3 - 12
months
Shs000
1-5
years
Shs000
Over Non interest

5 years
bearing
Shs000
Shs000
Total
Shs000
ASSETS
Cash in hand
Balances with Central Bank of Uganda
Government securities - Available-for-sale
Government securities - Held-to-maturity 172,016
241,896
3,000,000
2,106,515
6,138,800
4,106,749
537,462
6,017,704
725,682
266,639
245,244
537,462
6,017,704
725,682
9,405,439
6,872,420
other banking institutions

Other assets
Intangible assets
Deferred tax
Tax recoverable
1,707,640
31,509,829
-
35,983
236,155
-
388,076
-
1,458,946
-
572,327
-
1,060,182
755,856
1,905,878
656,934
10,841
283,708
335,377
100,225
2,803,805
755,856
36,071,211
656,934
10,841
283,708
335,377
100,225
Total assets
33,389,485
514,034
388,076
6,565,461
10,817,876
12,901,732
64,576,664
Customer deposits
21,311,326
Deposits from other banking institutions 1,420,660
Other liabilities
Shareholders equity
-
15,973,236
-
9,074,652
-
30,218
-
7,845,297
481,807
632,492
7,322,216
484,760
54,234,729
1,902,467
632,492
7,322,216
484,760
Total liabilities and shareholders equity
22,731,986
15,973,236
9,074,652
30,218
16,766,572
64,576,664
On balance sheet interest sensitivity gap 10,657,499
(15,459,202)
(8,686,576)
6,535,243
10,817,876
(3,864,840)
LIABILITIES AND SHAREHOLDERS EQUITY
145

Upto
1 month
Shs000
1-3
months
Shs000
3 - 12
months
Shs000
1-5
years
Shs000
Over Non interest

5 years
bearing
Shs000
Shs000
Total
Shs000
ASSETS
Cash in hand
Government securities - Available-for-sale 700,000
Government securities - Held-to-maturity
3,328,800
2,990,400
570,369
1,420,337
486,784
31,144
286,403
570,369
1,420,337
486,784
5,104,944
6,201,710
64,059
20,000
200,000
1,025,000
2,660,848

Other assets
Intangible assets
Deferred tax
2,645,882
25,939,825
-
41,481
493,708
-
34,282
95,087
-
1,251,284
-
109,329
-
1,235,073
567,043
1,965,991
680,689
5,675
184,270
273,262
3,956,718
567,043
29,855,224
680,689
5,675
184,270
273,262
Total assets
29,285,707
599,248
349,369
4,937,132
6,428,529
7,707,040
49,307,025
Customer deposits
12,289,422
Deposits from other banking institutions 2,125,152
Current tax
Other liabilities
Shareholders equity
-
12,042,091
300,000
-
7,308,703
173,919
103,141
-
181,046
-
7,823,266
19,980
923,750
5,589,521
427,034
39,644,528
2,619,051
103,141
923,750
5,589,521
427,034
14,414,574
12,342,091
7,585,763
181,046
14,783,551
49,307,025
(11,742,843)
(7,236,394)
4,756,086
6,428,529
(7,076,511)

146
Upto
1 month
Shs000
1-3
months
Shs000
3 - 12
months
Shs000
1-5
years
Shs000
Cash in hand
337,638
2,091,895
Other assets
20,497,430
Intangible assets
Deferred tax
-
606,489
1,829,284
606,489
1,829,284
13,270
100,000
-
566,000
1,929,490
1,915,000
3,715,400
12,314
324,991
337,638
2,593,314
5,983,151
1,808,830
366,148
794,932
482,558
268,551
180,513
207,878
3,900,725
366,148
21,292,362
482,558
268,551
180,513
207,878
13,270
100,000
2,495,490
5,630,400
7,220,126
38,048,610
ASSETS
Total assets
22,589,325
Over Non interest

5 years
bearing
Shs000
Shs000
Total
Shs000

Customer deposits
Current tax
Other liabilities
Shareholders equity
8,360,799
1,479,340
-
8,629,336
539,552
-
3,770,016
-
619,135
-
9,324,464
30,191
1,760
528,957
4,424,865
340,195
30,703,750
2,049,083
1,760
528,957
4,424,865
340,195
9,840,139
9,168,888
3,770,016
619,135
14,650,432
38,048,610
(9,155,618)
(3,670,016)
1,876,355
5,630,400
(7,430,306)
147

Upto
1 month
Shs000
1-3
months
Shs000
3 - 12
months
Shs000
1-5
years
Shs000
Over
5 years
Shs000
Non interest
bearing
Shs000
302,343
1,640,266

331,766
Other assets
14,911,615
Intangible assets
Deferred tax
-
10,000
178,817
10,000
-
86,000
2,007,679
415,000
3,465,000
50,911
214,678
302,343
1,640,266
1,504
1,504
571,911
5,866,174
1,720,399
347,353
747,704
409,931
116,121
126,977
184,123
2,052,164
347,353
15,659,319
409,931
116,121
126,977
184,123
Total assets
188,817
10,000
2,093,679
3,880,000
5,862,308
27,278,183
2,219,067
1,427,762
-
4,788,155
275,789
-
4,713,684
453,692
-
692,375
-
8,184,958
207,921
419,421
61,816
3,615,848
217,694
20,598,240
2,365,164
419,421
61,816
3,615,848
217,694
Total liabilities and shareholders equity 3,646,829
5,063,944
5,167,377
692,375
12,707,658
27,278,183
(4,875,128)
(5,157,377)
1,401,304
3,880,000
(6,845,350)
Total
Shs000
ASSETS
Cash in hand
15,243,380

Customer deposits
Other liabilities
Current tax
Shareholders equity
On balance sheet interest sensitivity gap11,596,552

148
Upto
1 month
Shs000
1-3
months
Shs000
3 - 12
months
Shs000
1-5
years
Shs000
Over
5 years
Shs000
Non interest
bearing
Shs000
Total
Shs000
Cash in hand
395,000
379,534
Other assets
5,984,050
Intangible assets
Deferred tax
-
958,412
24,700
306,000
3,283,549
581,573
1,075,769
523,837
581,573
1,075,769
5,491,498
582,798
-
1,479,202
-
2,374,699
-
308,714
-
278,377
249,852
423,365
246,790
87,456
98,522
657,911
249,852
11,152,828
246,790
87,456
98,522
1,541,210
1,503,902
2,680,699
3,592,263
3,565,541
19,642,199
ASSETS
Total assets
6,758,584
149
Customer deposits
Other liabilities
Current tax
Shareholders equity
5,003,745
2,135,000
-
2,673,361
-
1,987,430
-
53,332
-
3,960,472
26,024
423,830
91,123
3,287,882
13,678,340
2,161,024
423,830
91,123
3,287,882
7,138,745
2,673,361
1,987,430
53,332
7,789,331
19,642,199
On balance sheet interest sensitivity gap
(380,161)
(1,132,151)
(483,528)
2,627,367
3,592,263
(4,223,790)

AT 31 DECEMBER 2014- BANK
Upto
1 month
Shs000
1-3
months
Shs000
3 - 12
months
Shs000
1-5
years
Shs000
Over Non interest

5 years
bearing
Shs000
Shs000
Total
Shs000
ASSETS
Cash in hand
Other assets
Intangible assets
Deferred tax
Current tax
176,472
3,000,000
1,300,000
6,138,800
4,088,928
455,056
6,017,704
266,639
245,244
455,056
6,017,704
9,405,439
5,810,644
356,602
29,137,492
-
1,081,415
555,490
858,174
1,860,347
512,577
10,841
245,254
192,104
100,225
1,438,017
555,490
858,174
30,997,839
512,577
10,841
245,254
192,104
100,225
Total assets
29,494,094
4,300,000
10,227,728
12,300,845
56,599,365
Customer deposits
Other liabilities
Shareholders equity
18,969,200
1,043,587
-
15,260,856
-
5,510,790
-
16,585
-
7,390,381
481,792
431,932
7,494,241
47,147,812
1,525,379
431,932
7,494,241
20,012,787
15,260,856
5,510,790
16,585
15,798,346
56,599,364
9,481,307 (15,084,384) (5,510,790)
4,283,415
10,227,728
(3,497,501)

150
Upto
1 month
Shs000
1-3
months
Shs000
3 - 12
months
Shs000
1-5
years
Shs000
Over Non interest

5 years
bearing
Shs000
Shs000
Total
Shs000
ASSETS
Cash in hand
Other assets
Intangible assets
Deferred tax
700,000
-
20,000
200,000
1,025,000
2,375,000
3,328,800
2,990,400
497,261
1,420,337
31,144
279,344
497,261
1,420,337
5,104,944
5,844,744
539,436
24,402,243
-
1,235,129
447,319
871,972
1,769,477
548,290
5,675
143,393
176,008
1,774,565
447,319
871,972
26,171,720
548,290
5,675
143,393
176,008
Total assets
25,641,679
220,000
3,400,000
6,319,200
7,425,348
43,006,228
Customer deposits
Current tax
Other liabilities
Shareholders equity
11,815,796
2,074,940
-
11,007,160
300,000
-
4,891,355
173,919
-
4,252
-
6,346,404
19,965
103,141
550,726
5,718,570
34,064,967
2,568,824
103,141
550,726
5,718,570
13,890,736
11,307,160
5,065,274
4,252
12,738,806
43,006,228
11,750,943 (11,307,160) (4,845,274)
3,395,748
6,319,200
(5,313,458)
151

Upto
1 month
Shs000
1-3
months
Shs000
3 - 12
months
Shs000
1-5
years
Shs000
Over
5 years
Shs000
Non interest
bearing
Shs000
ASSETS
Total
Shs000
in hand
1,040,946
Other assets
18,258,362
Intangible assets
Deferred tax
-
100,000
-
566,000
1,700,000
1,915,000
3,715,400
545,639
1,829,284
12,314
324,991
1,818,921
345,108
721,250
779,957
363,092
268,551
142,132
142,662
Cash
545,639
1,829,284
2,593,314
5,740,391
other
2,859,867
345,108
721,250
19,038,319
363,092
268,551
142,132
142,662
Total assets
100,000
2,266,000
5,630,400
7,292,141
34,589,609
19,299,308

Customer deposits
Current tax
Other liabilities
Shareholders equity
7,015,728
1,445,740
-
7,878,425
539,552
-
2,973,465
-
459,172
-
9,254,571
28,694
1,760
438,235
4,554,267
27,581,361
2,013,986
1,760
438,235
4,554,267
8,461,468
8,417,977
2,973,465
459,172
14,277,527
34,589,609
(8,417,977)
(2,873,465)
1,806,828
5,630,400
(6,983,626)

152
Upto
1 month
Shs000
1-3
months
Shs000
3 - 12
months
Shs000
1-5
years
Shs000
Over
5 years
Shs000
Non interest
bearing
Shs000
Total
Shs000
ASSETS
Cash in hand
331,766
Other assets
14,156,085
Intangible assets
Deferred tax
-
10,000
-
10,000
-
86,000
1,700,000
415,000
3,465,000
257,140
1,640,266
50,911
214,678
1,148,121
325,154
448,109
747,704
277,923
116,121
83,979
133,659
257,140
1,640,266
571,911
5,379,678
other
1,479,887
325,154
448,109
14,903,789
277,923
116,121
83,979
133,659
Total assets
10,000
10,000
1,786,000
3,880,000
5,443,765
25,617,616
14,487,851

Customer deposits
Other liabilities
Current tax
Shareholders equity
2,011,268
1,370,000
-
4,555,972
275,789
-
4,428,270
453,692
-
692,375
-
7,556,817
116,715
409,672
61,816
3,685,228
19,244,702
2,216,197
409,672
61,816
3,685,228
3,381,268
4,831,762
4,881,962
692,375
11,830,248
25,617,616
(4,821,762)
(4,871,962)
1,093,625
3,880,000
(6,386,484)
153

The table below summarises the effective interest rates calculated on a weighted average basis, by major currencies for monetary
inancial assets and liabilities
Deposits and balances due from
Customer deposits
Deposits and balances due to
Deposits and balances due from
Customer deposits
Deposits and balances due to
2014
US $ GB
%
%
Shs.
%
10
2013
US $ GB
%
%
-
Euro
%
Euro
%
-
19
6
9
3
9
3
7
2
19
6
8
3
10
Shs.
%
10
2011
US $ GB
%
%
-
Euro
%
-
Shs.
%
10
2010
US $ GB
%
%
-
Euro
%
-
16
5
8
2
8
2
7
1
14
5
8
2
8
3
7
1
10
Shs.
%
10
Shs.
%
10
2012
US $ GB
%
%
-
Euro
%
-
12
8
3
7
2
16
6
8
3
8
2
7
2
16
Interest rate risk sensitivity

At 31 December 2014, if the weighted average interest rate
for loans and advances at that date had been 10 percent higher
with all other variables held constant, post-tax proit for the
year would have been higher as shown below, arising mainly as
a result of higher interest income.
Year
2014
2013
2012
2011
2010
Amount (Shs.
Million)
431.24
467.606
175.64
142.898
180.74
At 31 December 2014, if the weighted average interest rate

for customer deposits and deposits from other banking institutions, at that date had been 10 percent higher with all other
variables held constant, post-tax proit for the year would have
been lower as shown below, arising mainly as a result of higher
interest expense
Year
2014
2013
2012
2011
2010
Amount (Shs.
Million)
203.401
223.869
74.357
60.098
130.842

154
29. PRICE RISK SENSITIVITY

The bank is exposed to price risk on government securities
because of investments that are classiied on the statement of
inancial position as Available-for-sale.
The table below summarises the impact on increase in the market price on the Groups equity net of tax. The analysis is based
on the assumption that the market prices had increased by 5%
with all other variables held constant and the entire Groups
equity instruments moved according to the historical correlation
with the price:
Impact on equity
Effect of increase
Shs. 000
2014 ...............................................................329,190
2013 ...............................................................178,673
2012 ................................................................. 90,766
2011 ................................................................ 20,017
2010 ...............................................................274,575
155

30. LIQUIDITY RISK

Liquidity risk is the risk that the Group is unable to meet its
payment obligations associated with its inancial liabilities as
they fall due and to replace funds when they are withdrawn.
The matching and controlled mismatching of the maturities
and interest rates of assets and liabilities is fundamental to the
management of the Group. It is unusual for Groups ever to
be completely matched since business transacted is often of
uncertain terms and of different types. An unmatched position
potentially enhances proitability, but can also increase the risk
of losses. The maturity of assets and liabilities and the ability to
replace, at an acceptable cost, interest bearing liabilities as they
mature are important factors in assessing the liquidity of the
Group and its exposure to changes in interest and exchange
rates.
The Group does not maintain cash resources to meet all
liabilities as they fall due as experience shows that a minimum
level of reinvestment of maturing funds can be predicted with
high level of certainty. The management has set limits on the
minimum portion of maturing funds available to meet such
withdrawals and on the level of interbank and other borrowing facilities that should be in place to cover withdrawals at
unexpected levels of demand. The management reviews the
maturity proile on a weekly basis and ensures that suficient
liquidity is maintained to meet maturing deposits which substantially are generally rolled over into new deposits. The Bank
fully complies with the Central Bank of Kenyas minimum cash
reserve ratio (5.25 %) and liquidity ratio (20 %) requirements,
with the average liquidity maintained at 32.0% (2013: 29.70%)
during the year.
The table overleaf analyses assets and liabilities into the relevant maturity groupings based on the remaining period at the
balance sheet date to the contractual maturity date.

156
Upto
1 month
Shs000
1-3
months
Shs000
3 - 12
months
Shs000
1-5
years
Shs000
Over
5 years
Shs000
Total
Shs000
ASSETS
Cash in hand
Balances with Bank of Uganda
Other assets
Intangible assets
Deferred tax
Tax recoverable
537,462
2,212,915
725,682
26,267
216,721
3,098,906
225,079
277,229
703,765
345,558
471,968
2,118
3,196,536
3,898,120
5,611,999
2,008,382
537,462
6,017,704
725,682
9,405,439
6,872,420
2,803,805
357,576
11,002,965
-
49,822
7,198,140
-
240,970
6,880,759
100,225
61,870
8,748,047
-
45,618
2,241,300
656,934
283,708
335,377
-
2,803,805
755,856
36,071,211
656,934
10,841
283,708
335,377
100,225
Total assets
17,883,393
10,849,176
8,754,086
15,906,691
11,183,318
64,576,664
Customer deposits
Other liabilities
Shareholders equity
29,044,967
1,902,468
449,143
-
15,996,512
31,187
-
9,162,126
126,584
-
31,123
25,578
-
7,322,216
484,760
54,234,728
1,902,468
632,492
7,322,216
484,760
31,396,578
16,027,699
9,288,710
56,701
7,806,976
64,576,664
(13,513,185)
(5,178,523)
(534,624)
15,849,990
3,376,342
Net liquidity gap
157

Upto
1 month
Shs000
1-3
months
Shs000
3 - 12
months
Shs000
1-5
years
Shs000
Over
5 years
Shs000
Total
Shs000
177
1,025,000
2,539,350
3,328,800
2,990,400
570,369
1,420,337
486,784
5,104,944
6,201,710
ASSETS
Cash in hand
Other assets
Intangible assets
Deferred tax
570,369
537,919
486,784
626,096
230,837
678,203
86,563
103,250
204,038
38,485
337,873
3,956,718
326,757
11,916,530
-
20,561
3,923,064
-
121,158
6,041,577
-
2,540
6,146,482
-
96,027
1,827,571
680,689
5,675
184,270
273,262
3,956,718
567,043
29,855,224
680,689
5,675
184,270
273,262
Total assets
18,652,010
4,811,641
6,743,131
9,713,549
9,386,694
49,307,025
19,997,394
2,136,761
702,314
-
12,094,258
308,371
-
7,352,947
173,919103,141
145,530
-
199,929
75,906
5,589,521
427,034
39,644,528
2,619,051
103,141
923,750
5,589,521
427,034
22,836,469
12,402,629
7,775,537
6,092,461
49,307,025
(7,590,988)
(1,032,406)

Customer deposits
Current tax
Other liabilities
Shareholders equity

Net liquidity gap
(4,184,459)
199,929
9,513,620
3,294,233

158
Upto
1 month
Shs000
1-3
months
Shs000
3 - 12
months
Shs000
1-5
years
Shs000
Over
5 years
Shs000
Total
Shs000
758
4,352,775
1,340,736
606,489
1,829,284
337,637
8,576,464
ASSETS
Cash in hand
Other assets
Intangible assets
Deferred tax
606,489
1,108,345
337,637
2,593,314
522,848
12,797
197,333
276,842
3,900,725
42,941
12,359,568
-
5,554
1,489,041
-
9,021
1,933,595
-
3,021
4,363,291
-
305,611
1,146,866
482,558
268,551
180,513
207,879
3,900,725
366,148
21,292,361
482,558
268,551
180,513
207,879
Total assets
20,949,019
2,030,240
2,416,791
8,719,845
3,932,714
38,048,610
18,070,499
1,509,531
108,520
-
8,655,372
539,552
-
3,788,983
24,636
-
188,894
-
1,760
395,802
4,424,865
340,195
30,703,748
2,049,083
1,760
528,958
4,424,865
340,195
19,688,550
9,194,924
3,813,619
5,162,622
38,048,610
Net liquidity gap
1,260,469
(1,229,908)

Customer deposits
Current tax
Other liabilities
Shareholders equity
159

(7,164,684)
(1,396,828)
188,894
8,530,951
Upto
1 month
Shs000
1-3
months
Shs000
3 - 12
months
Shs000
1-5
years
Shs000
Over
5 years
Shs000
302,343
914,339
1,504
-
443,952
9,902
178,817
274,410
9,689
-
7,565
78,419
2,007,679
473,900
3,679,678
302,343
1,640,266
1,504
571,911
5,866,174
2,052,164
17,727
7,924,795
-
467
873,563
-
95
2,238,457
-
3,636,669
-
329,064
985,834
409,931
116,121
126,977
184,123
2,052,164
347,353
15,659,318
409,931
116,121
126,977
184,123
11,212,871
1,506,701
2,522,651
5,730,332
6,305,627
27,278,183
Customer deposits
Other liabilities
Current tax
Shareholders equity
11,569,425
2,365,165
(1,395)
-
5,437,345
-
3,502,770
61,816
-
88,700
-
420,816
3,615,848
217,694
20,598,240
2,365,165
419,421
61,816
3,615,848
217,694
13,933,194
5,437,345
3,564,586
88,700
4,254,358
27,278,183
Net liquidity gap
(2,720,323)
(3,930,644)
(1,041,935)
5,641,632
2,051,269
Total
Shs000
ASSETS
Cash in hand
Other assets
Intangible assets
Deferred tax
Total assets

160
Upto
1 month
Shs000
1-3
months
Shs000
3 - 12
months
Shs000
1-5
years
Shs000
Over
5 years
Shs000
Total
Shs000
ASSETS
Cash in hand
Other assets
Intangible assets
Deferred tax
581,573
805,868
395,000
158,508
958,412
108,846
24,700
2,547
541,756
3,571,630
581,573
1,075,769
5,491,498
657,911
224,016
5,984,050
-
582,798
-
4,916
1,479,202
-
2,374,699
-
20,920
732,079
246,790
87,456
98,522
657,911
249,852
11,152,828
246,790
87,456
98,522
Total assets
8,648,418
1,699,718
1,617,664
2,919,002
4,757,397
19,647,199
8,026,671
2,161,024
351,801
-
3,319,127
72,029
-
2,279,210
91,123
-
53,332
-
3,287,882
13,678,340
2,161,024
4423,830
91,123
3,287,882
10,539,496
3,391,156
2,370,333
53,332
3,287,882
19,647,199
Net liquidity gap
(1,891,078)
(1,691,438)
(752,669)
2,865,670 1,287,515

Customer deposits
Other liabilities
Current tax
Shareholders equity
161

Upto
1 month
Shs000
1-3
months
Shs000
3 - 12
months
Shs000
1-5
years
Shs000
Over
5 years
Shs000
455,056
2,212,915
26,267
44,705
3,098,906
225,079
211,805
703,765
345,558
210,274
2,118
3,196,536
3,335,477
5,611,999
2,008,382
455,056
6,017,704
9,405,440
5,810,643
1,438,017
173,725
8,705,717
-
46,206
6,961,985
-
59,421
7,289,101
-
235,676
6,492,682
10,841
100,225
40,462
858,174
1,548,354
512,577
245,254
192,104
-
1,438,017
555,490
858,174
30,997,839
512,577
10,841
245,254
192,104
100,225
13,056,402
10,543,981
8,099,021
13,882,653
11,017,306
56,599,364
Customer deposits
Other liabilities
Shareholders equity
26,359,581
1,525,379
295,808
-
15,260,856
214
-
5,510,790
119,988
-
16,585
15,922
-
7,494,241
47,147,812
1,525,379
431,932
7,494,241
28,180,768
15,261,070
5,630,778
32,507
7,494,241
56,599,364
(15,124,366)
(4,717,089)
2,468,243
13,850,146
3,523,065
Total
Shs000
ASSETS
Cash in hand
Other assets
Intangible assets
Deferred tax
Tax recoverable
Total assets
Net liquidity gap

162
Upto
1 month
Shs000
1-3
months
Shs000
3 - 12
months
Shs000
1-5
years
Shs000
497,261
537,919
626,096
166,778
678,203
86,563
103,250
204,038
38,485
209,316
177
1,025,000
2,375,000
1,774,565
236,147
9,073,658
-
3,685,806
-
115,145
6,022,845
-
5,784,462
-
12,912,424
4,553,822
18,162,200
2,086,534
329,420
-
Over
5 years
Shs000
Total
Shs000
ASSETS
Cash in hand
Other assets
Intangible assets
Deferred tax
Total assets
3,328,800
2,990,400
497,261
1,420,337
5,104,944
5,844,744
96,027
871,972
1,604,949
548,290
5,675
143,393
176,008
1,774,565
447,319
871,972
26,171,720
548,290
5,675
143,393
176,008
6,589,829
9,184,639
9,765,514
43,006,228
11,007,160
308,371
-
4,891,355
173,919
103,141
145,400
-
4,252
-
75,906
5,718,570
34,064,967
2,568,824
103,141
550,726
5,718,570

Customer deposits
Current tax
Other liabilities
Shareholders equity
163
20,578,154
11,315,531
5,313,815
4,252
5,794,476
43,006,228
Net liquidity gap
(7,665,730)
(6,761,709)
1,276,014
9,180,387
3,971,038

ASSETS
Cash in hand
Other assets
Intangible assets
Deferred tax
Total assets
Upto
1 month
Shs000
1-3
months
Shs000
3 - 12
months
Shs000
1-5
years
Shs000
Over
5 years
Shs000
Total
Shs000
545,639
1,108,345
2,593,314
522,848
-
197,333
206,459
758
4,193,196
1,340,736
545,639
1,829,284
8,333,705
2,859,867
58,661
11,426,969
-
1,362,690
-
1,797,702
-
3,304,092
-
286,447
721,250
1,146,866
363,092
268,551
142,132
142,662
2,859,867
345,108
721,250
19,038,319
363,092
268,551
142,132
142,662
18,592,795
1,885,538
2,201,494
7,498,046
4,411,736
34,589,609
16,718,053
1,474,434
114,922
-
7,878,425
539,552
-
2,973,465
1,760
323,313
4,554,267
27,581,361
2,013,986
1,760
438,235
4,554,267
18,307,409
8,417,977
2,973,465
11,418
(6,532,439)
(771,971)
7,486,628

Customer deposits
Current tax
Other liabilities
Shareholders equity
Net liquidity gap
285,386
11,418
-
4,879,340
(467,604)
34,589,609
-

164
Upto
1 month
Shs000
1-3
months
Shs000
3 - 12
months
Shs000
1-5
years
Shs000
Over
5 years
Shs000
Total
Shs000
257,140
914,339
-
443,952
9,902
-
274,410
9,689
-
7,565
78,419
1,700,000
473,900
3,679,678
257,140
1,640,266
571,911
5,379,678
1,479,887
24,036
7,736,465
-
816,729
-
2,151,620
-
3,213,141
-
301,118
448,109
985,834
277,923
116,121
83,979
133,659
1,479,887
325,154
448,109
14,903,789
277,923
116,121
83,979
133,659
10,411,867
1,270,583
2,435,719
4,999,125
6,500,321
25,617,616
Customer deposits
Other liabilities
Current tax
Shareholders equity
10,733,484
2,216,197
-
5,205,162
-
3,217,356
61,816
-
88,700
409,672
3,685,228
19,244,702
2,216,197
409,672
61,816
3,685,228
12,949,681
5,205,162
3,279,172
88,700
Net liquidity gap
(2,537,814)
(3,934,579)
(843,453)
4,910,425
ASSETS
Cash in hand
Other assets
Intangible assets
Deferred tax
Total assets
165

4,094,900
2,405,421
25,617,616
-
AT 31 DECEMBER 2010 BANK
Upto
1 month
Shs000
1-3
months
Shs000
3 - 12
months
Shs000
1-5
years
Shs000
Over
5 years
Shs000
Total
Shs000
581,573
563,904
395,000
158,508
625,000
108,846
24,700
2,547
306,000
3,629,155
581,573
833,805
4,979,855
643,625
249,852
448,109
11,152,828
246,790
87,456
98,522
ASSETS
Cash in hand
Other assets
Intangible assets
Deferred tax
643,625
224,016
4,916
5,984,050
-
582,798
-
1,479,202
-
2,374,699
-
20,920
448,109
732,079
246,790
87,456
98,522
Total assets
8,392,168
1,366,306
1,617,664
2,683,246
5,263,031
19,322,415
Customer deposits
Other liabilities
Current tax
Shareholders equity
8,026,671
2,161,024
301,149
-
3,319,127
72,029
-
2,279,210
91,123
-
53,332
-
3,018,750
13,678,340
2,161,024
373,178
91,123
3,018,750
10,488,844
3,391,156
2,370,333
53,332
3,018,750
19,322,415
Net liquidity gap
(2,096,676)
(2,024,850)
(752,669)
2,629,914
2,244,281

-

166
31.
FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES
The fair values of government securities have been disclosed

under note 11.
In the opinion of the directors, the fair values of inancial assets
and inancial liabilities are not materially different from their
carrying values.
32.
CAPITAL MANAGEMENT
The Groups objectives when managing capital, which is a

broader concept than the equity on the face of the statement
of inancial position are:
To comply with the capital requirements set by the Central

Bank of Kenya;
To safeguard the Groups ability to continue as a going

concern so that it can continue to provide returns for shareholders and beneits for other stakeholders; and
To maintain a strong capital base to support the development of its business.
The Group monitors the adequacy of its capital using ratios

established by Central Bank of Kenya. These ratios measure
capital adequacy by comparing the Groups core capital with
total risk-weighted assets plus risk weighed off-balance sheet
items, total deposit liabilities and total risk-weighted off balance
sheet items.
Credit Risk Weighted Assets

Assets are weighted according to broad categories of notional credit risk, being assigned a risk weighting according to the
amount of capital deemed to be necessary to support them.
Four categories of risk weights (0%, 20%, 50% and 100%) are
applied. e.g. cash in hand (domestic and foreign), balances held
with Central bank of Kenya including securities issued by the
Government of Kenya have a zero risk weighting, which means
that no capital is required to support the holding of these assets.
Property, plant and equipment carries a 100% risk weighting.
Based on these guidelines it means that they must be supported
by capital equal to 100% of the carrying amount. Other asset
categories have intermediate weightings.
167

Off-balance sheet credit related commitments such as

guarantees and acceptances, performance bonds, documentary credit etc., are taken into account by applying different
categories of credit risk conversion factors, designed to convert these items into balance sheet equivalents. The resulting
credit equivalent amounts are then weighted for credit risk
using the same percentages as for balance sheet assets. Core
capital (Tier 1) consists of paid-up share capital, retained
proits less non-dealing investments. Supplementary capital
(Tier 2) includes general provisions.
Market Risk Weighted Assets

This is the risk of loss in on and off balance sheet position
arising from movement in market prices. These risks pertain
to inherent risk related instruments in the trading book,
commodities risk throughout the bank, equities risk and
foreign exchange risk in the trading and banking books of the
bank. Different risk weights are applied as per the Prudential
Regulation.
Operational Risk Weighted Assets

This is the risk of loss resulting from inadequate or failed
internal process, people or from external events. The operational risk is calculated using the Basic Indicator Approach.
Under this approach the capital charge for operational risk is
a ixed percentage of average positive annual gross income
of the institution over the past three years. Annual gross income is the sum of net interest income and net non interest
income.

168
5,104,944
252,382
5,357,326
9,405,439
133,864
9,539,303
9,539,303
12,496,508
4,165,503
4,165,503
72,854,218
Total market risk weighted assets
Operational risk
Gross income for prior 3 years
Average gross income
Total operational risk weighted assets
Total risk weighted assets
53,771,778
9,453,575
3,151,192
3,151,192
5,357,326
2,257,032
45,263,260
43,006,228
56,599,364
2,550,048
59,149,412
1,774,565
447,319
26,171,720
871,972
548,290
5,675
143,393
176,008
-
1,438,017
555,490
30,997,839
858,174
512,577
10,841
245,254
192,104
100,225
Total assets
Off balance sheet positions
Credit related commitments
Adjusted risk weighed assets
Market Risk
Interest rate risk capital charge
Foreign exchange risk capital charge
Total market risk capital charge
497,261
1,420,337
10,949,688
2013
Shs000
455,056
6,017,704
15,216,083
2014
Shs000
36,372,407
1,782,798
36,372,407
34,589,609
2,859,867
345,108
19,038,319
721,250
363,092
268,551
142,132
142,662
-
545,639
1,829,284
8,333,705
2012
Shs000
27,400,414
1,782,798
27,400,414
25,617,616
1,479,887
325,154
14,903,789
448,109
277,923
116,121
83,979
133,659
-
257,140
1,640,266
5,951,589
2011
Shs000
Balance sheet nominal amount
CAPITAL MANAGEMENT (CONTINUED)
Cash in hand
Placements with and loans and advances
to other banking institutions
Other assets
Intangible assets
Deferred tax
Tax recoverable
32.
20,599,946
1,277,531
20,599,946
19,322,415
643,625
249,852
11,152,828
448,109
246,790
87,456
98,522
-
581,573
833,805
4,979,855
2010
Shs000
43,035,804
624,825
7,810,318
4,201,980
322,772
13,386
336,158
2,297,822
31,023,506
28,725,684
287,603
555,490
26,821,590
512,577
10,841
245,254
192,104
100,225
2014
Shs000
BANK
34,408,638
472,679
5,908,485
2,614,053
183,886
25,238
209,124
1,928,453
25,886,100
23,957,647
511,684
447,319
22,125,278
548,290
5,675
143,393
176,008
-
2013
Shs000
20,065,687
2,200,041
20,065,687
17,865,646
838,550
345,108
15,765,551
363,092
268,551
142,132
142,662
-
2012
Shs000
14,894,438
1,596,737
14,894,438
13,297,701
295,977
325,154
12,064,888
277,923
116,121
83,979
133,659
-
2011
Shs000
87,456
98,522
246,790
277,384
249,852
8,994,735
2010
Shs000
11,224,759
1,160,486
11,224,759
9,954,739
Risk weighted amount

169 Imperial
14.71%
12.73%
15.00%
15.20%
13.09%
15.50%
Core capital to risk assets ratio
Core capital to deposits ratio
Total capital to risk assets ratio

19%
13%
17%
21%
14%
20%
2011
%
2013
%
2014
%
Actual ratios
2012
%
36,633,791
48,673,191
Total deposit liabilities
3,071,900
3,752,061
2012
Shs000
4,755,333
6,441,517
Total capital
2012
Shs000
2,999,907
71,993
4,663,322
92,011
2013
Shs000
3,648,390
103,671
6,371,651
69,866
Tier 1
Tier 2 capital
2014
Shs000
Capital adequacy requirements calculation
21%
14%
20%
2010
%
2,299,517
2,262,390
37,127
2010
Shs000
12%
8%
8%
2014
%
capital.
12%
8%
8%
2013
%
12%
8%
8%
2012
%
12%
8%
8%
2011
%
12%
8%
8%
2010
%
Minimum requirement
customers as securities. There is no borrower with either funded
Risk weighted amounts for loans and advances to customers are

stated net of impairment losses. These balances have also been
33. RELATED PARTY TRANSACTIONS

The Group is controlled by Imperial Securities Limited incorporated in Kenya, which owns 100% of the Banks shares.
Included in loans and advances and customer deposits are amounts advanced to/received from certain directors and companies
in which directors are involved either as shareholders or directors (related companies). In addition, contingent liabilities (Note 25)
include guarantees and letters of credit which have been issued to related companies.
The following transactions were carried out with related parties:

170
GROUP
2014
Shs000
2013
Shs000
2012
Shs000
2011
Shs000
2010
Shs000
152,463
5,703
35,400
162,779
4,616
24,856
153,677
5,882
23,498
98,327
2,542
9,298
84,449
2,086
7,852
193,566
192,251
183,057
110,167
94,387
2014
Shs000
2013
Shs000
2012
Shs000
2011
Shs000
2010
Shs000
152,463
5,501
33,856
162,779
4,414
23,312
153,677
5,840
23,186
98,327
2,490
9,269
84,449
2,086
7,852
191,820
190,505
182,703
110,086
94,387
9,128
575
4,670
6,605
17,824
126,319
11,440
16,429
4,880
126,215
4,042
15,394
4,751
84,942
3,886
15,840
4,228
18,639
2,274
9,330
20,978
172,012
150,531
109,419
34,471
8,587
575
4,180
6,407
17,347
126,319
11,440
16,429
4,620
126,215
4,042
15,394
4,316
84,942
3,886
15,840
4,228
18,639
2,274
9,330
19,749
171,535
150,271
108,984
34,471
85,907
39,820
73,439
39,820
a) Interest received from loans and

advances to:
Related companies
Senior management employees
Other employees
BANK
a) Interest received from loans and

advances to:
Related companies
Other employees
GROUP
b) Interest paid on deposits from:

Directors
Related companies
Other employees
BANK
b) Interest paid on deposits from:

Directors
Related companies
Other employees
GROUP
c) Purchase of services
Shareholders
BANK
Shareholders
171

GROUP
Directors
2014
Shs000
2013
Shs000
2012
Shs000
2011
Shs000
2010
Shs000
84,990
2,097
14,802
(10,607)
86,553
2,083
(3,646)
91,282
84,990
2014
Shs000
2013
Shs000
2012
Shs000
2011
Shs000
2010
Shs000
1,269,775
1,258,058
152,463
(1,464,259)
1,233,663
524,632
162,779
(651,299)
888,174
510,066
153,677
(318,254)
782,213
345,347
98,327
(337,713)
At end of year
1,216,037
1,269,775
1,233,663
888,174
782,213
175,414
90,539
106,816
71,725
92,586
2014
Shs000
2013
Shs000
2012
Shs000
2011
Shs000
2010
Shs000
51,778
57,565
6,157
(17,385)
59,194
32,108
4,599
(44,123)
59,194
9,364
5,882
(19,069)
98,115
51,778
55,371
59,240
46,582
c) Outstanding loans and advances

At start of year
Advances during the year
Interest charged
Repayments during the year
At end of year
Related companies
c)Outstanding loans and advances

At start of year
Interest charged
523,594
522,764
84,449
(348,594)

At start of year
Interest charged
At end of year
46,582
30,880
2,542
(20,764)
41,673
23,067
2,086
(20,244)

172
Other employees
2014
Shs000
2013
Shs000
2012
Shs000
2011
Shs000
2010
Shs000
302,369
212,327
34,885
(171,328)
217,211
201,752
24,856
(141,450)
200,415
97,821
23,498
(104,523)
164,577
127,402
9,298
(100,845)
116,103
108,627
7,852
(68,005)
378,253
302,369
217,211
200,432
164,577
--
c) Outstanding loans and advances

At start of year
Interest charged
At end of year
The loans and advances to related parties are performing .

No provisions have been recognised in respect of the loans and advances to directors, related parties or
staff as they are performing well.
Directors
d) Deposits
2014
Shs000
2013
Shs000
2012
Shs000
2011
Shs000
2010
Shs000
At start of year
Deposits received during the year
Interest paid during the year
117,155
996,158
9,131
77,279
491,363
17,824
78,284
350,851
4,880
74,800
877,481
4,751
159,417
292,271
4,228
(993,200)
(469,311)
(356,735)
(878,630)
(381,116)
129,244
117,155
77,279
78,402
74,800
2014
Shs000
2013
Shs000
2012
Shs000
2011
Shs000
2010
Shs000
925,775
12,952,867
575
(13,532,552)
1,363,812
4,051,011
126,319
(4,615,367)
163,764
3,853,622
126,215
(2,779,789)
294,769
16,833,322
84,942
(17,048,604)
1,370,656
4,161,378
18,639
(4,150,585)
346,666
925,775
1,363,812
164,429
1,400,088
2014
Shs000
2013
Shs000
2012
Shs000
2011
Shs000
2010
Shs000
158,361
268,001
4,673
(316,445)
55,337
217,238
11,455
(125,669)
54,797
118,587
4,042
(122,089)
37,220
108,061
3,886
(94,361)
51,253
99,200
2,274
(115,507)
114,590
158,361
55,337
54,806
37,220
Withdrawals during the year

At end of year
Related companies
Deposits
At start of year
At end of year
Deposits
At start of year
At end of year
173

Other employees
Deposits
At start of year
At end of year
2014
Shs000
2013
Shs000
2012
Shs000
2011
Shs000
2010
Shs000
394,949
2,020,246
6,606
(2,049,389)
311,800
1,902,847
16,686
(1,836,384)
214,530
1,340,967
15,394
(1,259,091)
164,519
1,316,238
15,840
(1,282,044)
38,632
1,244,503
9,330
(1,127,946)
372,411
394,949
311,800
214,553
164,519

174
BANK
Directors
2014
Shs000
2013
Shs000
2012
Shs000
2011
Shs000
2010
Shs000
At start of year
Interest charged
67,446
14,063
-
66,250
1,196
-
At end of year
81,509
67,446
2014
Shs000
2013
Shs000
2012
Shs000
2011
Shs000
2010
Shs000
1,269,775
1,252,860
152,463
(1,463,941)
1,233,663
524,632
162,779
(651,299)
888,174
510,066
153,677
(318,254)
782,213
345,347
98,327
(337,713)
523,594
522,764
84,449
(348,594)
1,211,157
1,269,775
1,233,663
888,174
782,213
175,414
90,539
106,816
71,725
92,586
2014
Shs000
2013
Shs000
2012
Shs000
2011
Shs000
2010
Shs000
46,851
53,625
5,501
(12,981)
54,907
31,340
4,414
(43,810)
58,421
8,564
5,840
(17,918)
46,582
30,033
2,490
(20,684)
41,673
23,067
2,086
(20,244)
92,996
46,851
54,907
58,421
46,582
2014
Shs000
2013
Shs000
2012
Shs000
2011
Shs000
2010
Shs000
296,618
203,889
33,856
(159,371)
214,997
191,678
23,312
(133,369)
200,135
92,646
23,186
(100,970)
164,577
126,936
9,269
(100,647
116,103
108,627
7,852
(68,005)
374,992
296,618
214,997
200,135
164,577
Related companies
At start of year
Interest charged
At end of year
At start of year
Interest charged
At end of year
Other employees
At start of year
Interest charged
At end of year
The loans and advances to related parties are performing .

No provisions have been recognised in respect of the loans and advances to directors, related parties or staff as
they are performing well.
175

Directors
2014
Shs000
2013
Shs000
2012
Shs000
2011
Shs000
2010
Shs000
111,841
995,751
8,587
(992,797)
73,496
457,707
17,347
(436,709)
76,296
336,128
4,620
(343,548)
74,800
259,777
4,316
(262,597)
159,417
292,271
4,228
(381,116)
At end of year
123,382
111,841
73,496
76,296
74,800
Related companies
Deposits
2014
Shs000
2013
Shs000
2012
Shs000
2011
Shs000
919,032
12,950,196
575
(13,529,886)
1,351,000
3,956,672
126,319
(4,514,959)
152,550
3,851,942
126,215
(2,779,707)
294,769
16,363,997
84,942
(16,591,158)
2010
Shs000
At
1,370,656
4,161,378
18,639
(4,150,585)
339,917
919,032
1,351,000
152,550
1,400,088
2014
Shs000
2013
Shs000
2012
Shs000
2011
Shs000
155,978
267,946
4,180
(316,392)
55,011
174,763
11,440
(85,236)
54,653
110,088
4,042
(113,772)
37,220
103,440
3,886
(89,893)
2010
Shs000
At
51,253
99,200
2,274
(115,507)
111,712
155,978
55,011
54,653
37,220
2014
Shs000
2013
Shs000
2012
Shs000
2011
Shs000
393,154
1,900,288
6,407
(1,939,449)
311,021
1,791,142
16,429
(1,725,438)
214,143
1,281,710
15,394
(1,200,226)
164,519
1,316,238
15,840
(1,282,044)
2010
Shs000
At
38,632
1,244,503
9,330
(1,127,946)
360,400
393,154
311,021
214,553
164,519
d) Deposits
At start of year
start of year
At end of year
Deposits
start of year
At end of year
Other employees
Deposits
start of year
At end of year

176
GROUP
e)Directors emoluments
- fees
- others
2014
Shs 000
2013
Shs 000
2012
Shs 000
2011
Shs 000
2010
Shs 000
25,295
111,202
96,555
110,346
39,606
83,421
49,041
66,386
42,000
46,039
136,497
206,902
123,027
115,427
88,039
22,650
55,809
94,000
68,561
37,000
58,436
47,000
50,332
42,000
46,039
78,459
162,561
95,436
97,332
88,039
BANK
- fees
- others
f)Key management personnel compensation

GROUP
Short-term employee beneits
Post-employment beneits
329,434
15,124
260,642
13,107
223,945
9,888
194,426
14,440
114,600
11,066
344,558
273,749
233,832
208,865
125,666
BANK
Short-term employee beneits

Post-employment beneits
34.
242,231
6,010
214,694
8,347
209,882
8,172
188,053
13,744
114,600
11,066
248,241
223,041
218,054
201,797
125,666
PRESENTATION CURRENCY
The inancial statements are presented in to the nearest thousand Kenya Shillings (Shs000).
177

PROSPECTIVE FINANCIAL INFORMATION
SIGNIFICANT ASSUMPTIONS
1. The proposed bond issue will be fully subscribed and Shs. 2 billion proceeds therefrom will be received in July 2015.
2. Interest on the bond will accrue at 15 % payable every six months commencing September 2015.
3. The other borrowings will be used to increase the supplementary capital in line with the new CBK guidelines and will be at an
interest rate of 19%.
4. The proceeds of the bond will be utilised to increase the loans and advances and government securities portfolio of the Group which
will increase gradually over the period to December 2015 following the bond issue.
5. There will be an increase in share capital by Shs 500 million.
6. There will be no material changes in the weighted average interest rates on loans and advances and other financial assets and
liabilities compared to 2014.
7. The proportion of non-performing loans and advances to total loans and advances and therefore the provisions for impairment will
track 2014.
8. Overall operating expenditure is expected to increase in line with inflation at 14% other than employment costs which are expected
to increase at a higher rate based on projected recruitment of additional employees to service the increased loans and advances
portfolio.
9. Capital expenditure will include completion of the work in progress and new branches.
10. Exchange rates will remain unchanged between March 2015 and December 2015.
11. Tax has been calculated using an effective rate of 30% which tracks the Kenyan income tax rate for companies.

178
FORECAST STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Forecast
January to December
2015
Shs000
Interest income
Actual January to
December
2014
Shs000
8,691,727
7,594,089
(3,214,424)
(2,905,730)
NET INTEREST INCOME
5,477,303
4,688,359
1,020,788
756,937
Interest expense
489,303
380,713
Other income
220,000
185,907
OPERATING INCOME
7,207,394
6,011,916

(360,364)
(242,191)
(3,584,091)
(3,159,892)
PROFIT BEFORE TAX
3,262,939
2,609,833
Tax charge
(963,727)
(592,370)
PROFIT FOR THE YEAR
2,299,212
2,017,463
2,247,788
2,036,933
51,424
(19,470)
2,299,212
2,017,463
1,315
1,616
PROFIT FOR THE YEAR
EARNINGS PER SHARE
179

FORECAST STATEMENT OF FINANCIAL POSITION
Forecast
December
2015
Shs000
Actual
December
2014
Shs000
ASSETS
Cash in hand
Other assets
Intangible assets
Deferred tax
Tax recoverable
1,150,303
5,110,545
19,283,758
537,462
6,743,386
16,277,859
7,597,909
1,192,664
44,709,182
741,132
364,444
362,000
187,820
2,803,805
755,856
36,071,211
656,934
10,841
283,708
335,377
100,225
TOTAL ASSETS
80,699,757
64,576,664
LIABILITIES
Customer deposits
Other liabilities
Other borrowings
Corporate Bond
65,478,939
821,394
1,418,788
500,000
2,000,000
54,234,728
1,902,468
632,492
-
TOTAL LIABILITIES
70,219,121
56,769,688
SHAREHOLDERS EQUITY
Share capital
Retained earnings
Proposed dividend
Translation reserve
Fair value reserve
1,748,400
7,488,724
233,970
600,000
(118,985)
-
1,248,400
5,910,244
187,166
25,000
(26,039)
(22,555)
TOTAL SHAREHOLDERS EQUITY ATTRIBUTABLE TO OWNERS
9,952,109
7,322,216
528,527
484,760
TOTAL SHAREHOLDERS EQUITY
10,480,637
7,806,976
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY
80,699,757
64,576,664

180
FORECAST STATEMENT OF CASH FLOWS

Forecast
January to December
2015
Shs000
Actual
January to
December
2014
Shs000
8,691,727
(3,088,424)
1,730,091
(2,944,816)
(1,020,000)
7,482,280
(2,720,919)
1,360,057
(2,901,688)
(843,556)

Interest receipts
Interest payments
Tax paid
181
changes in operating assets and liabilities
3,368,578

- other assets
- customer deposits
- other liabilities
(8,067,810)
(639,995)
11,246,023
860,228
6,767,025

(575,982)
(163,000)
(3,005,982)
-
(197,252)
(141,221)
(5,029,017)
(5,166)
825
(3,744,963)
(5,371,831)
Proceeds from issue of ordinary shares

Issue of corporate bond
Proceeds from other borrowings
Interest paid on the coporate bond and other borrowings (83,000)
Dividend paid
720,903
2,000,000
500,000
(25,000)
(475,000)
3,112,903
(438,733)

At start of year
Increase/(decrease)
Translation reserve
3,304,100
6,134,964
-
3,254,121
114,536
(64,557)
At end of year
9,439,064
3,304,100

2,376,174
(6,588,310)
(4,178,546)
14,661,763
(345,981)
5,925,100
36,267
-
FINANCIAL RATIOS
12 months to 31 December
2014
Shs
2013
Shs
2012
Shs
2011
Shs
2010
Shs
Earnings before interest and taxes interest cover (times)
N/a
N/a
N/a
N/a
N/a
Funds from operations to total debt (%)
N/a
N/a
N/a
N/a
N/a
Free cash flow to total debt (%)
N/a
N/a
N/a
N/a
N/a
Total free cash flow to short term debt obligation (%)
N/a
N/a
N/a
N/a
N/a
Net profit margin (%)
38%
34%
28%
35%
41%
Post tax return (before financing) on capital employed (%)
28%
33%
32%
33%
29%
Long term debt to capital employed (%)
N/a
N/a
N/a
N/a
N/a
Total debt to equity (%)
N/a
N/a
N/a
N/a
N/a
Note to the above for those N/A:

Earnings before interest and taxes interest cover (times)Funds from operations to total debt (%)Free cash flow to total debt (%)Total free cash flow to short term debt obligation (%)Long term debt to capital employed (%)Total debt to equity (%)-

182 Imperial
The main source of income is interest

The bank does not have debt
Appendix 1 - Sample application form

Incorporated in 1992 pursuant to the Companies Act Chapter 486 of the Laws of Kenya and is
registered under Registration Number C.10/2015.
NOTE APPLICATION FORM
In respect of a Kenya Shilling Two Billion Fixed Rate Notes

Offer Opens at 9.00am on Monday, 24th August 2015 and
Closes at 5.00pm on Thursday, 17th September 2015
Please refer to the Information Memorandum and the notes in this Application Form before completing this form

183 Imperial
SERIAL NO.
For the public offering of Imperial Bank Limited Fixed Rate Notes
Please read the notes overleaf before completing this form.
Name of Applicant (s):
As it should appear on the Central
Depository
System (CDS Account)
CDS Account Number
Postal Address
(Preferably P.O. Box Address)
Physical Address
Contact Name
Email address
Telephone Number and Code
Facsimile Number and Code
I/We, the undersigned hereby apply to purchase the amount specified below of the fixed rate notes (the Notes) to be issued by Imperial
Bank Limited, upon the terms and conditions set out in this application form and the Information Memorandum dated 12th August 2015.
Amount of Fixed Rate Notes Applied for in Figures KES:
Billions
Hundreds of Millions
Tens of Millions
Millions
Hundreds of thousands
Millions
Hundreds of thousands
Amount of Fixed Rate Notes Applied for in Words KES:

Billions
Hundreds of Millions
Tens of Millions
Amount of Fixed Rate Notes Applied for in Words KES:

Interest Payments and Principal Repayment Instruction
By way of a Kenya Shilling Bank Account with a Bank in Kenya
Interest and Principal is to be paid to:
KES bank account Number
At the (branch) of Bank
Address:
Swift Code:

184

Status of Withholding Tax Exemption
Select sign (i) or (ii))
i) Exempt from Withholding Tax (please attach a certified copy of the certificate of exemption to this application)
ii) Non-exempt from Withholding Tax
Declaration
I/We represent and warrant that I/we have the necessary authority and power to purchase and hold the Notes in accordance with this
application form and have taken all necessary corporate action to approve such purchase and to authorise the person signing this application form to bind me/us in accordance with the terms hereof.
Individuals
Name(s)
1. __________________________________
2. ______________________________
Signature(s) 1. __________________________________
2. ______________________________
Identification
(Passport or ID Card Nos) ____________________________
___________________________________
Date: ___________________________________________ 2015
Companies or Institutions
Name(s)
1. ____________________________
Signature(s) 1. ____________________________
(Authorised Signatory)
2. ______________________________
2. _____________________________
(Authorised Signatory)
(Append Company Seal)
Date: ______________________________ 2015
All joint holders must sign. In the case of a company, the company stamp must be affixed. Institutions must sign in accordance with their
constitutional documents (charter, by-laws etc) and evidence of the authority of the persons signing on behalf of the institution must be
attached. In the case of individuals, a copy of the passport/Kenyan ID must be attached.

185 Imperial

NOTES:
1. General Instructions on completing the application form
This completed form should be forwarded by hand to the Arranger or Placing Agent at the following address:
Dyer & Blair Investment Bank Limited

10th Floor, Pension Towers, Loita Street
P.O. Box 45396 00100,
Nairobi, Kenya.
Tel: +254 709 930 000
Attention: Leah Nyambura or Sarah Kinya
Email: corporate@dyerandblair.com
The deadline for submission of applications is 5.00pm on Thursday 17th September 2015
All alterations to this application form must be authenticated by full signature. All applications must be made without any conditions
stated by applicants
Under no circumstances whatsoever may the name of the applicant be changed and if this is done then the application form will be invalid
Applications are made subject to the provisions of the Information Memorandum to which this form is attached
Applications are irrevocable and may not be withdrawn or amended without the written consent of Imperial Bank Limited
Individual applicants must be 18 years of age or older
2. Acceptance
By signing an application form the applicant undertakes to pay to Imperial Bank Limited on the Settlement Date
3. Allotment Procedure
The basis of allotment will be determined by the Issuer and the Arranger at their sole discretion and communicated to the Capital
Markets Authority
The right is reserved to accept or reject any application in whole or in part
4. Settlement Procedure
Payment of the purchase prices for the Notes may be made:
By bank transfer/remittance using real time gross settlement (RTGS), to be made on the instructions of the successful applicant to his
bank of the funds for credit of Imperial Bank Limiteds KES Account Number LI20109 in the books of Imperial Bank Limited, Westlands
Branch no later than 5.00pm (Nairobi time) on Thursday 17th September 2015 for Retail Investors.
By bank transfer/remittance using real time gross settlement (RTGS), to be made on the instructions of the successful applicant to his
bank of the funds for credit of Imperial Bank Limiteds KES Account Number LI20109 in the books of Imperial Bank Limited, Westlands
Branch no later than 3.00pm (Nairobi time) on 28th September 2015 for Qualified Institutional Investors (QII*) which include Mutual
Funds, Insurance Companies and Banks.
5. General
The Information Memorandum and any contracts resulting from an acceptance of an application for the Notes shall be governed and
construed in accordance with Kenyan Law.
Please note that Application Forms received by the Authorised Placing Agent after the Closing Date will be rejected.
* Where in doubt on which institutions qualifies as QII, please contact Dyer & Blair Investment Bank Limited, the Authorised Placing Agent.

186
Appendix II Branch Outlets

KENYA OPERATIONS
Head Ofice & Westlands Branch, Imperial Court, Westlands Road, Westlands
Greenspan Branch, Manyanja Road, off Outer Ring Road
Highridge Branch, Highpark Shopping Centre, Masari Road, Highridge
Industrial Area Branch, Bamburi Road, Industrial Area
IPS Branch, IPS Building, Kimathi Street
Nairobi
Junction Branch, The Junction Mall, Ngong Road

Karen Branch, Karen Crossroad Mall, Karen
Parklands Branch, Regal Plaza, 6th Avenue Parklands, Limuru Road
Riverside Branch, Riverside Green Suite, Riverside Drive
Upperhill Branch, Bunyala Road, Upperhill, opposite HillPack Hotel
Village Market Branch, Village Market, Limuru Road, Gigiri
Bamburi Branch, City Mall, Bamburi

Changamwe Branch, Reinary Road, Rhino Properties
Diani Branch, Beach Road, next to Collier Centre, Diani
Haile Sellasie Road Branch, Blueroom Building, Haile Sellasie Road
Kilii Branch, Kilii Arcade, Biashara Street
Coast Region
Likoni Branch, Nova Holdings Complex, Nakumatt, Likoni

Malindi Branch, Galana Centre, Lamu Road
Mombasa Branch, Imperial Bank Building, Kaunda Avenue
Nyali Cinemax Branch, Mombasa
Watamu Branch, Tourist Road
Nakuru Branch, Westside Mall, Kenyatta Avenue

Rift Valley Region
Central Region
Eldoret-Kenyatta Street Branch, Laboso House

Eldoret Branch, Imperial Court, Eldoret-Nairobi Road
Thika Branch, Push-pa Plaza, Kwame Nkrumah Road
UGANDA OPERATIONS
Head ofice, Hannington Branch, Plot No. 6 Hannington Road
Kyaggwe Branch, Mukwano Mall, Plot 23-31, Rashid Khamis Road
Kampala
Kikuubo Branch, 1st Floor, Plot 24, along Kikuubo Road

Nakivubo Branch Mukwano Centre Shopping Arcade
Acacia Mall Branch, Cooper Road
187

Appendix III Unaudited Financial Statements as at 30th June 2015
Bank
BALANCE SHEET
A
1
2
3
4
5
ASSETS
Cash ( both Local & Foreign)
Balances due from Central Banks
LIABILITIES
Balances due to Central Bank of Kenya
Customer deposits
Deposits and balances due to local banking institutions
Deposits and balances due to foreign banking institutions
Other money market deposits
Borrowed funds
Balances due to banking institutions in the group
Tax payable
Dividends payable
Retirement beneit liability
Other liabilities
TOTAL LIABILITIES
SHAREHOLDERS' FUNDS
Paid up /Assigned capital
Share premium/(discount)
Revaluation reserves
Retained earnings/Accumulated losses
Statutory loan loss reserves
Other Reserves
Proposed dividends
Capital grants
TOTAL SHAREHOLDERS' FUNDS
minority Interest
44 TOTAL LIABILITIES AND SHAREHOLDERS'
FUNDS
C
35
36
37
38
39
40
41
42
43
31-Dec-14
31st Dec
Previous
Year
30-Jun-15
2nd Quarter
Current
Year
30-Jun-15
2nd Quarter
Current
Year
Shs. 000
Audited
455,056
6,017,704
Shs. 000
Unaudited
486,443
3,091,296
Shs. 000
Unaudited
511,045
4,497,975
5,877,658
5,877,658
5,810,644
5,810,644
6,199,140
6,199,140
6,287,513
6,287,513
7,077,882
7,077,882
9,405,440
9,405,440
9,976,226
9,976,226
12,571
70,941
8,987
30,527,447
288,585
1,149,432
100,225
30,997,838
41,941
112,349
100,225
36,021,869
871,972
858,174
900,140
9,742,872
9,742,872
1,025,416
157,997
100,225
36,266,564
955,580
474,309
343,377
192,101
1,021,730
61,576,704
Kenya Government and other securities held for dealing purposes
Financial Assets at fair value through proit and loss

Investment Securities:
a) Held to Maturity:
a. Kenya Government securities
b. Other securities
b) Available for sale:
a. Kenya Government securities'
b. Other securities
6
Deposits and balances due from local banking institutions
7
Deposits and balances due from banking institutions abroad
8
Tax recoverable
9
Loans and advances to customers (net)
10 Balances due from banking institutions in the group
11 Investments in associates
12 Investments in subsidiary companies
13 Investments in joint ventures
14 Investment properties
15 Property and equipment
16 Prepaid lease rentals
17 Intangible assets
18 Deferred tax asset
19 Retirement beneit asset
20 Other assets
21 TOTAL ASSETS
B
22
23
24
25
26
27
28
29
30
31
32
33
34
30-Jun-14
Previous
Year
Same
Quarter
Shs. 000
Unaudited
447,185
2,315,364
502,374
512,576
490,366
252,761
176,006
245,254
192,102
347,004
192,101
811,397
48,952,545
566,331
56,599,361
843,692
58,802,792
39,084,153
2,198,752
713,556
47,147,812
1,046,451
478,928
46,000,559
2,814,703
323,214
562,500
223,701
50,212,048
1,165,217
442,108
562,500
76,309
488,834
52,947,016
75,000
25,000
559,966
42,631,427
431,932
49,130,123
488,450
50,413,127
1,248,400
(149,035)
5,101,366
120,387
1,248,400
1,748,400
(22,554)
6,173,526
69,866
(124,095)
6,638,020
127,340
6,321,118
7,469,238
8,389,665
1,748,400
(361,742)
7,113,707
129,323
8,629,688
48,952,545
56,599,361
58,802,792
61,576,704
Group Consolidated
30-Jun-14
Previous
Year
Same
Quarter
Shs. 000
Unaudited
578,865
3,094,850
445,869
31-Dec-14
31st Dec
Previous
Year
Shs. 000
Audited
537,462
6,743,386
6,302,765
5,877,658
425,107
7,077,882
7,077,882
6,759,209
6,531,251
227,958
9,518,650
9,518,650
2,412,158
1,050,888
8,987
34,714,179
1,425,727
1,378,078
100,225
36,071,211
646,296
290,531
273,539
656,934
894,287
57,791,096
766,697
64,576,664
46,936,502
2,815,912
715,391
9,211
75,000
54,234,728
1,423,540
478,928
775,651
51,327,667
632,491
56,794,687
1,248,400
(149,035)
4,881,415
120,387
(7,951)
1,248,400
6,093,216
370,213
57,791,096
7,297,217
484,760
64,576,664
283,708
335,377
25,000
(22,555)
5,910,244
187,166
(26,038)
30-Jun-15
Current
Quarter
Current
Year
Shs. 000
Unaudited
694,231
5,178,638
7,343,913
6,287,513
1,056,400
9,742,872
9,742,872
2,416,932
417,761
112,986
41,500,484
587,483
374,612
321,139
1,642,642
70,333,693
58,108,616
1,345,089
442,108
562,500
3,608
77,446
892,063
61,431,430
1,748,400
(361,742)
6,852,049
206,131
(51,030)
8,393,807
508,456
70,333,693

188
Bank
PROFIT AND LOSS ACCOUNT

1.0
1.1
1.2
1.3
1.4
1.5
INTEREST INCOME
Loans and advances
Deposits and placements with banking institutions
Other Interest Income

Total interest income
2.0
INTEREST EXPENSE
2.1
2.2
2.3
2.4
3.0
Customer deposits
Deposits and placement from banking institutions
Other interest expenses
Total interest expenses
NET INTEREST INCOME/(LOSS)
4.0
4.1
4.2
4.3
4.4
NON-INTEREST INCOME
Fees and commissions on loans and advances
Other fees and commissions
Foreign exchange trading income/(Loss)
Dividend Income
4.5
4.6
5.0
Other income
Total Non-interest income
TOTAL OPERATING INCOME
6.0
OTHER OPERATING EXPENSES
6.1
6.2
6.3
6.4
6.5
6.6
6.7
6.8
7.0
Loan loss provision

Staff costs
Directors' emoluments
Rental charges
Depreciation charge on property and equipment
Amortisation charges
Total Other Operating Expenses
Proit/(loss) before tax and exceptional
items
Exceptional items
Proit/(loss) after exceptional items
Current tax
Deferred tax
Proit/(loss) after tax and exceptional
items
Other Comprehensive Income
Gains/(Losses) from translating the inancial statements of foreign operations
Fair value changes in available for sale inancial assets
Revaluation surplus on Property,plant and equipment
Share of other comprehensive income of associates
Income tax relating to components of other comprehensive income
Other Comprehensive Income for the
year net of tax
Total comprehensive income for the
year
8.0
9.0
10.0
11.0
12.0
13.0
13.1
13.2
13.3
13.4
13.5
14.0
15.0
16.0 EARNINGS PER SHARE- BASIC & DILUTED

17.0 DIVIDEND PER SHARE -DECLARED
189

30-Jun-14
Previous
Year
Same
Quarter
Shs. 000
Unaudited
2,695,435
574,862
967
50,159
3,321,423
30-Jun-15
2nd Quarter
Current
Year
30-Jun-15
2nd Quarter
Current
Year
Shs. 000
Audited
5,443,737
1,273,307
1,777
114,856
6,833,677
Shs. 000
Unaudited
1,333,690
399,726
4,811
37,145
1,775,372
Shs. 000
Unaudited
2,696,798
809,587
9,239
88,501
3,604,125
1,140,278
151,803
2,232,895
264,283
1,292,081
2,029,342
2,497,178
4,336,499
540,252
40,209
4,685
585,146
1,190,226
1,007,816
128,009
19,610
1,155,435
2,448,690
124,637
260,472
163,856
-
165,693
644,459
322,092
97,094
135,598
100,334
6,362
555,327
2,584,669
8,187
1,140,431
5,476,930
91,514
487,714
43,984
147,417
87,270
18,982
503,721
1,380,602
1,204,067
1,204,067
361,220
842,847
59,700
31-Dec-14
31st Dec
Previous
Year
Group Consolidated
30-Jun-14
31-Dec-14
Previous
31st Dec
Year
Previous
Same
Year
Quarter
Shs. 000
Shs. 000
Unaudited
Audited
2,975,538
6,012,426
613,434
1,366,639
43,412
66,873
60,171
148,151
3,692,555
7,594,089
30-Jun-15
Current
Quarter
Current
Year
Shs. 000
Unaudited
3,016,083
878,998
21,187
98,255
4,014,523
1,323,060
158,714
2,620,294
285,436
1,481,775
2,210,780
2,905,730
4,688,359
139,213
285,702
210,549
-
149,363
298,145
192,941
177,720
756,937
380,713
165,232
331,973
247,627
-
7,786
340,812
1,531,038
9,110
644,574
3,093,264
6,362
646,812
2,857,592
8,187
1,323,557
6,011,916
9,110
753,942
3,420,913
178,954
1,098,157
78,459
296,505
172,567
36,028
927,675
2,788,345
2,688,585
86,413
283,260
15,055
77,259
41,588
11,396
270,398
785,369
745,669
241,922
578,390
52,065
155,079
81,625
23,810
532,308
1,665,199
1,428,065
90,596
611,112
45,308
174,846
110,180
21,831
568,359
1,622,233
1,235,359
242,191
1,306,145
136,497
354,584
216,778
41,981
1,103,908
3,402,084
2,609,832
277,528
730,207
53,540
186,230
101,205
26,576
613,595
1,988,880
1,432,033
2,688,585
640,190
(16,096)
2,064,491
745,669
223,701
1,428,065
428,420
1,235,359
376,892
521,968
999,645
858,467
2,609,832
656,073
(63,703)
2,017,462
1,432,033
429,610
1,002,423
(12,521)
(40,322)
(86,479)
59,700
186,180
(339,187)
-
186,180
(101,540)
(339,187)
1,186,402
141,540
19,610
1,347,552
2,666,971
59,700
186,180
(101,540)
(339,187)
47,179
145,858
(425,666)
902,547
2,250,671
420,428
660,458
905,646
2,163,320
576,757
1,654
1,616
160
160
Bank
2,003,893
196,207
1,807,687
2,196,534
188,469
2,008,065
2,434,264
187,638
2,246,625
830,602
1,252,234
693,998
1,113,688
699,985
1,308,080
841,748
1,404,878
1,120,089
245,968
1,114,414
137,820
1,113,688
-
1,193,787
114,293
1,404,878
-
1,468,079
467,989
1,936,068
1,687,275
483,762
2,171,037
1,733,860
520,043
2,253,903
1,562,596
404,767
1,967,362
1,482,733
476,368
1,959,101
1,857,142
530,239
2,387,382
6,740,233
6,559,926
1,436
1,543,024
8,104,386
6,642,739
867
2,027,952
8,671,558
7,047,830
3,593,320
10,333,553
6,776,240
11,448
1,473,406
8,261,094
7,370,387
1,436
2,112,106
9,483,929
5,056,371
1,000,000
4,056,371
120,387
5,176,758
40,853,524
12.0%
8.0%
4.0%
12.4%
8.0%
4.4%
12.7%
12.0%
0.7%
6,563,752
1,000,000
5,563,752
69,866
6,633,618
43,219,474
13.5%
8.0%
5.5%
15.2%
8.0%
7.2%
15.3%
12.0%
3.3%
7,225,296
1,000,000
6,225,296
689,840
7,915,136
49,836,520
14.7%
8.0%
6.7%
14.5%
10.5%
4.0%
15.9%
14.5%
1.4%
7,406,705
1,000,000
6,406,705
691,823
8,098,528
49,950,321
14.3%
8.0%
6.3%
14.8%
10.5%
4.3%
16.2%
14.5%
1.7%
31.9%
20.0%
11.9%
44.2%
20.0%
24.2%
35.7%
20.0%
15.7%
40.7%
20.0%
20.7%
30-Jun-15
2nd Quarter
Current
Year
Shs. 000
Audited
Shs. 000
Unaudited
Shs. 000
Unaudited
1,765,494
174,561
1,590,932
2,020,286
172,856
1,847,430
2,232,180
176,849
2,055,331
2,259,959
177,123
2,082,836
589,318
1,001,614
655,952
1,191,478
689,274
1,366,057
832,036
169,578
1,033,879
157,599
1,552,196
394,044
1,946,240
OFF-BALANCE SHEET ITEMS

(a)Letters of credit,guarantees, acceptances
(b) Forwards, swaps and options
(c)Other contingent liabilities
(d)Total Contingent Liabilities
6,092,926
867
1,503,395
7,597,188
CAPITAL STRENGTH
(a)Core capital
(b) Minimum Statutory Capital
(c)Excess/(Diiciency)(a-b)
(d) Supplementary Capital
(e) Total Capital (a+d)
(f)Total risk weighted assets
(g) Core Capital/Total deposits Liabilities
(h) Minimum statutory Ratio
(I) Excess/(Deiciency) (g-h)
(j) Core Capital / total risk weighted assets
(k) Minimum Statutory Ratio
(l) Excess (Deiciency) (j-k)
(m) Total Capital/total risk weighted assets
(n) Minimum statutory Ratio
(o) Excess/(Deiciency) (m-n)
Advances (a-b)
(d) Less: Loan Loss Provision
(e) Net Non-Performing Loans and Advances(c-d)
(f) Discounted Value of Securities
(g) Net NPLs Exposure (e-f )
2.0
Shs. 000
Audited
30-Jun-15
2nd Quarter
Current
Year
NON-PERFORMING LOANS AND ADVANCES

(a) Gross Non-performing loans and advances
(b) Less: Interest in Suspense
(c)Total Non-Performing Loans and
INSIDER LOANS AND ADVANCES

(a) Directors, Shareholders and Associates
(b) Employees
(c)Total Insider Loans and Advances
Group Consolidated
30-Jun-14
Previous
Year
Same
Quarter
Shs. 000
Unaudited
30-Jun-15
Current
Quarter
Current
Year
Shs. 000
Unaudited
31-Dec-14
31st Dec
Previous
Year
OTHER DISCLOSURES
1.0
30-Jun-14
Previous
Year
Same
Quarter
Shs. 000
Unaudited
31-Dec-14
31st Dec
Previous
Year
and other facilities

3.0
4.0
14
14.1
14.2
14.3
LIQUIDITY
(a) Liquidity Ratio
(b) Minimum Statutory Ratio
(c) Excess (Deiciency) (a-b)
4,234,657
11,282,487
The above inancial statements are extracts from the books of the institution. The complete set of quarterly inancial statements,
statutory and qualitative disclosures can be accessed on the instutions website www.imperialbank.co.ke They may also be accessed
at the instutions Head Ofice located at Imperial Court, Westlands Road, Nairobi.

190

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INFORMATION

Imperial Bank Limited

Fiscal Agent, Registrar

The date of this Information Memorandum is 12th August 2015

IMPORTANT NOTICE & DISCLAIMERS

Imperial Bank Limited Note Issue

IMPORTANT NOTICE & DISCLAIMERS

Incorporation of Documents by Reference

Supplemental Information Memorandum

Mr. Abdulmalek Janmohamed

Imperial Bank Limited Note Issue

Mr. Alnashir Popat

Reporting Accountants PKF Kenya

Imperial Court. Westlands Road, Westlands

Kalamu House, Grevillea Grove, Westlands

Mr. Abdulmalek Janmohamed

Mr. Asif Chaudhry

Receiving Bank Imperial Bank Limited

Imperial Court, Westlands Road, Westlands

Mandated Lead Arranger & Sole Placement

Mr. James Kaburu

10th Floor, Pension Towers, Loita Street

Fiscal Agent & Registrar Image Registrars

Mrs. Leah Nyambura-Kagumba

Legal Counsel Hamilton,

Barclays Plaza, Loita Street

Note Trustee Ropat Trust Company

Imperial Bank Limited Note Issue

Mr. Alnashir Popat

P.O. Box 4829600100 Nairobi

GROUP MANAGING Kenyan

P.O. Box 4490500100 Nairobi

Mr. Anwar Hajee

P.O. Box 40093-00100 Nairobi

Mr. Jinit Mohanlal Shah

P.O. Box 16 Thika

Mr. Mukesh Kumar Patel

P.O. Box 4250300100 Nairobi

Mr. Vishnu Dhutia

P.O. Box 81004 Mombasa

Mr. Hanif Somji

P.O. Box 90682 Mombasa

Mr. Eric Gitonga Bengi

P.O. Box 330-00606 Nairobi

Mr. Omurembe Iyadi

P.O. Box 60682-00200 Nairobi

Mr. Christopher Diaz

P.O. Box 5308-00100 Nairobi

Mr. Abdulmalek Janmohamed

Imperial Bank Limited Note Issue

Other Corporate Information

Financial Year End

Imperial Bank Limited Note Issue

3. Definitions and Interpretations

Imperial Bank Limited Note Issue

3. Definitions and Interpretations

Imperial Bank Limited Note Issue

3. Definitions and Interpretations

Imperial Bank Limited Note Issue

IMPORTANT NOTICE & DISCLAIMERS.....................1

11. Industry Overview.........................................................32

1. Approvals from CMA and Printing

Thursday 12th August