Co-op Bank joins acquisitions train in Jamii Bora interest


Co-op Bank joins acquisitions train in Jamii Bora interest

In Summary

  • Co-operative Bank has until now sat out of the ongoing spate of mergers and acquisition with close rivals NIC and the Commercial Bank of Africa (CBA) joining forces to overtake the lender by asset size last year.
  • Confirming the interest, the Central Bank of Kenya (CBK) has welcomed the transaction which sits at the heart of the reserve bank creation of a strong banking sector in the country through the merger and acquisition (M&As) processes.
  • Jamii Bora had previously been linked to a marriage with CBA before the fizzling out of the proposal under the cloud of the NIC, CBA merger.

The Co-operative Bank of Kenya has expressed interest in acquiring Jamii Bora’s 100 per cent issued share capital in a transaction which is now subject to requisite regulatory approval.

Confirming the interest, the Central Bank of Kenya (CBK) has welcomed the transaction which sits at the heart of the reserve bank creation of a strong banking sector in the country through the merger and acquisition (M&As) processes.

“CBK welcomes the transaction which will diversify the business models of the two institutions and enhance the stability of the Kenyan banking sector,” said the bank in a statement issued on Wednesday.

Co-operative Bank has until now sat out of the ongoing spate of mergers and acquisition with close rivals NIC and the Commercial Bank of Africa (CBA) joining forces to overtake the lender by asset size last year.

Other M&As in the last 12 months have seen KCB buy out the National Bank of Kenya (NBK) while Equity Bank has favoured regional growth with interest in Atlas Mara four subsidiaries in East and Southern Africa and expansion in its Democratic Republic of Congo (DRC) holdings.

The Co-operative Bank of Kenya commenced operations in 1965 and is predominantly owned by 15 million members of the Kenyan co-operative movement and ranks fourth out of 39 banks by way of market share, an equivalent 9.63 per cent.

The bank had an asset size of Ksh.440.8 billion as of September 2019 and is represented in both Kenya and South Sudan with a branch count of 159.

On its part, Jamii Bora is ranked 38 with a 0.12 per cent market share held in 17 domestic branches.

The lender held an asset base of Ksh.12.5 billion from its last available financial disclosure.

Jamii Bora had previously been linked to a marriage with CBA before the fizzling out of the proposal under the cloud of the NIC, CBA merger.

The lender had further moved to shore up its capital base through rights issues undertaken in 2011 and 2014 respectively bringing its core capital above the Ksh.1 billion statutory requirement.

The proposed acquisition is further the subject of mergers and acquisition rules from the Capital Markets Authority (CMA).

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Story By Kepha Muiruri
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