This archive report was first published on 23 July 2020.
Co-op Bank is set to inject much-needed capital into struggling Jamii Bora Bank, following the completion of its acquisition of a 90% stake in the lender. The investment, valued at Sh1 billion, is expected to boost Jamii Bora's capital base and help it comply with Central Bank of Kenya prudential ratios.
According to Jamii Bora CEO Timothy Kabiru, the bank's boards have developed a joint business plan with Co-op Bank to resurrect Jamii Bora's capital. However, the details of the plan remain sensitive and are only available to shareholders who request them in writing.
Co-op Bank's investment in Jamii Bora comes after KCB's heavy funding of National Bank of Kenya. KCB acquired a 100% stake in NBK through a share swap and invested a total of Sh8 billion in the subsidiary to bring it to compliance with critical capital ratios.
Jamii Bora's financial woes can be attributed to a number of factors, including a defaulted Sh.412 million loan to Kenya Airways and a Sh500 million equity investment in Uchumi Supermarkets that has dropped to a current market value of Sh19 million.
Published on July 23, 2020, at 11:25 AM.
