Shareholders of Jamii Bora Bank (JBB) have approved an offer by the Co-operative Bank of Kenya to acquire 90 per cent stake in the bank.
In a statement on Thursday, July 2, Co-op bank’s Group Managing Director Gideon Muriuki said the stakeholders unanimously accepted the offer in a meeting held yesterday.
“This will be through the subscription of 224,153,154 new class of Ordinary Shares that would enable Co-op Bank inject Ksh 1 Billion and appoint a Board to run the business, ” the statement reads.
This is, however, subject to approval by the Central Bank of Kenya, Capital Markets Authority and the Competition Authority of Kenya.
Co-op bank said that the acquisition is based on “Inclusive Growth Model” that will safeguard the existing shareholders of Jamii Bora such that they “will now share in the expected future Transformation gains/profitability growth”.
“This acquisition will strengthen both institutions leveraging on the Co-operative Bank’s well-established Universal Banking model as well as our successful business Transformation Agenda/Turnaround riding on the bedrock of the 15 million-member co-operative movement and a Kshs.470 Billion balance sheet, ” said Dr Muriuki.
Cooperative Bank Group posted a 12.6 per cent growth in net profit for the year ended December 31, 2019. The bank reported a Kshs14.3 Billion profit after tax compared to Ksh12.7 Billion in the previous year.
The bank posted a Ksh20.7 billion profit before tax compared to Kshs18.2 Billion recorded in 2018.
The bank commenced operations in 1965 and is predominantly owned by the 15 million member Kenyan co-operative movement.
It was listed on the Nairobi Securities Exchange in 2008. It was ranked fourth out of 39 banks in terms of market share as at December 31, 2019 with a market share of 9.63 percent with 159 branches in Kenya and South Sudan.
JBB was established in 2010 after the acquisition by City Finance Bank Limited of the business of Jamii Bora Kenya Limited, a Micro Finance Institution. It was ranked 38 out of 39 banks in terms of market share as at December 31, 2019, with a market share of 0.12 per cent with 17 branches across the country.