Cooperative Bank of Kenya (Co-op Bank) has received the green light from the Central Bank of Kenya (CBK) to acquire 90% of the shareholding of Jamii Bora Bank Limited (JBB).
The financial details of the transaction have not been shared.
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The acquisition will be effective from 21 August 2020.
JBB was established in 2010 after the acquisition of its microfinance business Jamii Bora Kenya by City Finance Bank (CFB).
As of June 2020, JBB had a market share of 0.09% and operated 17 branches across the country.
Co-op Bank, which commenced operations in 1965, is predominantly owned by the Kenyan co-operative movement.
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By GlobalDataIt was ranked the third-largest bank in Kenya with a market share of 9.96%. It operates 159 branches in Kenya and South Sudan.
The central bank approved the deal on 3 August 2020, followed by the approval from the Cabinet Secretary for the National Treasury and Planning, next day.
In March this year reports first emerged that Co-op Bank was in talks to buy Jamii Bora Bank.
The watchdog believes that this deal will diversify the business models of both the lenders.
The acquisition is expected to benefit Co-op Bank’s shareholders and bolster the flexibility in the Kenyan banking sector.
In its press release, CBK wrote: “So far, the measures taken by CBK in the recent past to strengthen the banking sector, including review of business models and consolidation, have been beneficial in enabling the sector ride through the pandemic period while supporting their customers and the economy.”
