Shareholders of Jamii Bora Bank have unanimously approved Co-operative Bank’s offer to acquire 90% of the bank. This is pursuant to an Extra Ordinary General Meeting held on 1st July 2020.
This will be through the subscription of 224,153,154 new class of Ordinary Shares that would enable Co-op Bank inject Kshs.1 Billion and appoint a Board to run the business.
The Co-operative Bank Group is one of the largest banks in the region with an asset base of over Kshs.470 billion, predominantly owned by the over 15 million member Kenya Co-operative movement.
Jamii Bora Bank is a fully-fledged Commercial Bank, licensed and regulated by the Central Bank of Kenya, with over 444,000 customers in 17 branches and employs over 190 staff. The Bank has a strategic niche in MSME banking, offering working capital and trade finance solutions.
The next steps will now be the regulatory approvals notably from Central Bank of Kenya, Capital Markets Authority and the Competition Authority of Kenya.
According to Co-op Bank’s CEO Gideon Muriuki, the strategic entry of Co-op Bank coming in as a 90% strategic owner is an “Inclusive Growth Model” that particularly safeguards the existing shareholders of Jamii Bora; in that they will now share in the expected future Transformation gains/profitability growth.
The deal now awaits regulatory approval from Central Bank of Kenya (CBK), Competition Authority of Kenya and the Capital Markets Authority. CBK had in March welcomed the talks saying the deal would enhance stability in the banking sector.
Co-op bank’s growth strategy has been more focused on expanding in Kenya as opposed to expanding beyond boarders. Outside Kenya, the lender owns 51 percent stake in Co-op bank South Sudan.
With over 440,000 customers and 17 branches, Jamii Bora is a value-add to Co-op Bank, with minimal overlaps and large upside potential for exploration of deeper banking relationships by Co-op Bank.
Co-op Bank has in the past indicated that upon acquisition, Jamii Bora may become the new platform for Co-op Bank to offer specialized business lines such as youth and women banking, asset finance and leasing.
