This archive report was first published on 8 August 2020.
On August 8, 2020, the acquisition of Jamii Bora Bank by Co-operative Bank was finalized following the gazettement by the Central Bank of Kenya (CBK). The deal was approved by CBK on August 3 and further received the approval of the National Treasury Cabinet Secretary on August 4, as stated in the gazette notice published on the same day.
Co-op Bank will acquire a 90% shareholding in Jamii Bora Bank, which has 17 branches across the country and assets estimated at around Sh12 billion. This acquisition is expected to diversify the business models of the two institutions, benefiting Co-op Bank's diverse shareholders and enhancing the resilience of the Kenyan banking sector, according to a statement from CBK.
Jamii Bora Bank was established in 2010 after the acquisition by City Finance Bank of the business of Jamii Bora Kenya. It is ranked 38 out of 39 banks in terms of market share, with a share of 0.09%. Co-op Bank, on the other hand, started in 1965 and is owned predominantly by the 15 million-member co-operative movement. It was ranked third out of 39 banks in terms of market share as at June 30, 2020, with 9.96% market share and 159 branches in Kenya and South Sudan.
Co-op Bank has an asset base of Sh470 billion. The acquisition of Jamii Bora, an SME-focused lender, comes at a time when financial institutions are opting for mergers and acquisitions amid a tough operating environment. CBK has welcomed the transaction, stating that the measures taken by the bank in the recent past to strengthen the banking sector have been beneficial in enabling the sector ride through the pandemic period while supporting their customers and the economy.
