Kenyatta family-owned Commercial Bank of Africa is set to buy out Jamii Bora Bank at an estimated price of Ksh1.4 billion.
This comes weeks after CBA announced takeover of the NIC bank, setting a strong footing in the Kenya’s banking sector.
An acquisition of the bank will put total assets of CBA to Ksh457 billion, becoming the third-largest bank in Kenya after Kenya Commercial Bank (KCB) and Equity.
Currently, KCB has an asset base of ksh684.1 billion while Equity has Ksh560.3 total assets.
According to reports, the merger of the three banks will see each concentrate on a certain sector of the industry, with CBA’s M-shwari being shifted to Jamii Bora while CBA/NIC arm will focus on the corporate and SME banking.
In March 2018, Jamii Bora estimated its worth to be over Ksh3.4 billion, pointing to a possible discount of over Ksh2 billion. Since then, the bank has not published its financial statements after exemption by the Central Bank of Kenya to allow the planned buyout.
However, reports indicate that the Ksh1.4 billion buyout amount will not be final, as shareholders are posed to pocket more money from CBA upon confirmation of its financial standing.
Among the shareholders who will relinquish their shareholding include the outgoing CEO Sam Kimani and the incoming CEO Mr Tim Kabiru who will get Ksh238 million combined. Mr Kimani announced his resignation from the lender on Wednesday this week.
Other shareholders include Catalyst Principal Partners (ksh224 million), Shorecap Ltd (Ksh238 million), Jamii Bora Scadnavia (Ksh224 million) while other individual shareholder will receive Ksh476 million for their 34 percent shareholding.
As per their March 2018 financial statement, Jamii Bora’s liquidity ratio stood at 11.1 percent against the statutory requirement of 20 percent.
At that time, the lender announced a Ksh51.2 million loss, a significant reduction from Ksh96.2 loss in the previous year.
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