This archive report was first published on 2 July 2020.
Co-op Bank, Kenya's second-largest bank, has made a significant move in the banking sector by acquiring 90% of Jamii Bora Bank. The acquisition was approved by the shareholders of Jamii Bora Bank at an Extra-Ordinary General Meeting held on July 1, 2020.
According to a statement by Co-op Bank, the acquisition will be made through the subscription of 224,153,154 new class of Ordinary Shares, which will enable Co-op Bank to inject Sh1 Billion and appoint a Board to run the business.
Co-op Bank is one of the largest banks in the region, with an asset base of over Sh470 billion. The bank is predominantly owned by the over 15 million member Kenya Co-operative movement. Co-op Bank has made significant strides in innovations, including the recent launch of an Instant debit card in Harambee Sacco.
On the other hand, Jamii Bora Bank boasts a customer base of over 444,000, with 17 branches across the country and over 190 employees. The acquisition is expected to benefit these employees through the inclusive growth model with Co-op Bank.
Co-op Bank's statement also warned that the acquisition will have a material effect on the price of the Company's securities. The bank advised shareholders and the investing public to exercise caution when dealing with the Company's securities.
The next steps will now be the regulatory approvals from the Central Bank of Kenya, Capital Markets Authority, and the Competition Authority of Kenya.
Co-op Bank recorded a profit of Sh20.7 Billion as at December 31, 2019, and paid out over Sh5.9 Billion in dividends to shareholders on April 23, 2020.
