The shareholders of Jamii Bora Bank have accepted a Sh. 1 billion acquisition offer from the Co-operative Bank. The offer was unanimously accepted during a general meeting that was held on July 2 this year.
Following this approval, Co-op Bank will now acquire 90 per cent of the Jamii bank. This will be done through the subscription of 224,153,154 new class of Ordinary Shares. The acquisition of the bank now awaits the regulatory approval from Central Bank of Kenya (CBK), Competition Authority of Kenya and the Capital Markets Authority.
“This acquisition will strengthen both institutions in leveraging on the Co-operative Bank’s well-established universal banking model as well as our successful business transformation agenda,” Co-operative Bank Group chief executive officer Dr. Gideon Muriuki said.
The Co-operative Bank Group is one of the largest banks in the region with an asset base of over Sh. 470 billion, pre-dominantly owned by the over 15 million member Kenya Co-operative movement. Co-op Bank had a profit of Sh. 20.7 billion as at December 31 last year and in April 2020 paid out over Sh. 5.9 billion in dividends.
On the other hand, 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. Jamii Bora Bank also runs Jamii Bora Leasing Limited and Jamii Bora Insurance Agency Limited. Jamii’s existing issued 24.9 million ordinary shares of Sh. 66 each will now be re-designated and re-classified as Class B ordinary shares, giving owners room to share in future profits as opposed to cashing out at once.