The Co-operative Bank of Kenya (Co-op) has proposed to acquire 100% of Kenyan commercial bank Jamii Bora Bank (JBB) for an undisclosed price.
According to the Co-operative Bank of Kenya, the acquisition will reinforce the two institutions by tapping into each of their well-established domestic and regional corporate public sector, retail business.
The Co-operative Bank of Kenya has an asset base of more than KES450bn ($4.39bn). The bank, which began operations in 1965, is mainly owned by the more than 15 million-member Kenya Co-operative movement.
As of end 2019, the Co-operative Bank of Kenya held a market share of 9.63%, while maintaining 159 branches across Kenya and South Sudan.
Details of Jamii Bora Bank
Jamii Bora Bank is said to have more than 350,000 customers in 17 branches. Its asset base is KES12.5bn ($120m).
The Kenyan bank is particularly engaged in micro, small and medium enterprises (MSME) banking and microfinance.
It also owns the Jamii Bora Leasing and Jamii Bora Insurance Agency businesses.
Jamii Bora Bank was established in 2010 following the acquisition by City Finance Bank of the business of Jamii Bora Kenya Limited, a Micro Finance Institution. As of 31 December 2019, the Kenyan commercial bank held a market share of 0.12%.
The bank in a statement said: “In the context of the overall transformation of the Kenyan Banking sector, JBB shareholders mandated the board to seek a strategic investor with a view to strengthening its business model and resilience.
“We believe Co-op Bank with its unique ownership by the 15 million-member co-operative movement offers an excellent opportunity to achieve this objective.”
The proposed deal has been welcomed by the Central Bank of Kenya (CBK), which expects it to diversify the business models of the two banks and help in boosting the stability of the Kenyan banking sector.
The closing of the transaction will be subject to due diligence, shareholders’ approvals of both the banks, approvals from the Central Bank of Kenya, Capital Markets Authority, Competition Authority of Kenya, and others.
