After acquiring 50 per cent stake in First City Bank (FCB) of Mauritius last month, Kenya's I&M Bank is deliberating on ways to control the Indian Ocean Island market richly dominated by foreign banking giants.

The privately owned bank, which has often relied on its internal operational efficiency to become one of Kenya's top 10 most profitable banks, is now re-considering its strategy in a bid to remain afloat in its new territory.

"There is a lot of competition. You just have to be very smart," a senior official in the bank who declined to be named told FS last week. "But we are preparing ourselves to face these challenges."

I&M Bank bought 50 per cent shares in FCB of Mauritius at a cost of $15.5 million (Sh1.1 billion).

The deal, which left 50 per cent shareholding to Ciel Group of Mauritius, marked the bank's first investment abroad. The acquisition is widely viewed as a launching pad for I&M Bank's regional expansion with plans to enter Tanzania.

Ciel, its investment partner has a foothold in Tanzania.

FCB is one of the 19 commercial banks in Mauritius licensed to do on-shore and offshore banking business.

The Mauritius banking industry is heavily infiltrated by, among others, Barclays Bank PLC (UK), Standard Bank of South Africa, Hong Kong and Shanghai Banking Corporation (HSBC), Bank Mascranies (French), South East Asian Bank, Bank of Baroda, Indian Overseas International Bank, State Bank of Mauritius and Mauritius Commercial Bank.

The bank hopes to attract a team of managers with exposure in international banking business.

The new arrangements will see the bank also reposition its new subsidiary through re-branding and revamping of operational and credit procedures to bring them up to its standards.

The five-week recruitment exercise, which began immediately after the conclusion of the acquisition transaction, has so far procured a chief executive, deputy chief executive and two independent financial consultants.

Armed with a wealth of international banking experience, expectations are high that the directors will steer I&M Bank's offshore operations in Mauritius to greater heights.

"The main issue is that you've got to have the right directors in place and we have already found the right type of staffing," said the source.

The initial phase of the re-branding will involve introducing new products, refurbishing old branches, introducing IT systems in terms of better service delivery standards, advertising and the general overhaul of the face of the premises in order to give them a fresh outlook. The three-month project is estimated to cost of $1 million (Sh62 million).

I&M Bank, which was founded in 1980, has assets worth Sh30 billion in Kenya with 10 branches in Nairobi, Kisumu and Mombasa.

FCB was primarily owned by the Government of Mauritius and had been scouting for a strategic investor to provide the expertise and technical inputs and improve its competitive edge in that country.

In October, last year, the bank added to its shareholding roll DEG Group of Germany and Proparco of France, with the two leading European development finance institutions injecting Sh377 million into the bank.

Ciel Group has interests in the sugar industry, power generation, garments, property development and funds management in Mauritius and beyond.