The Cooperative Bank of Kenya has received a green light to acquire a 90% stake in the struggling Jamii Bora Bank. The Centrak Bank of Kenya and The treasury have given Coop Bank the greenlight to acquire the stake by August 21st 2020.
“CBK welcomes this transaction which will diversify the business models of the two institutions, benefitting Co-op Bank’s diverse shareholders and enhancing the resilience of the Kenyan banking sector,” Central Bank said last week Friday in a statement.
Coop Bank has grown over the years to acquire a 9.9% share in the banking sector in the country becoming the third largest bank in Kenya with over 159 branches in the country and branches in South Sudan. It is owned by Cooperative societies. The Coop bank of Kenya was established in the year 1965 as a cooperative society and granted a banking licence in 1968. The Kenyan government instructed that all Cooperatives in the country transfer their money in to the bank and that all societies to buy shares from the bank.
On the other hand Jamii Bora Bank was established in 2010. It was initially established in 1999 as a sacco. In 2010 it was acquired by City Bank and granted banking status. It is struggling as a bank with only 17 branches across the country and ranked number 38 out of 39 banks across the country. It has a market stake of 0.09.
Mauritian lender, SBM Holdings recently acquired Chase Bank which was struggling and was going under.
The Chase Bank buyout deal was completed on August 18 2018 with SBM only paying MUR162,158 (Sh471,335) as cash consideration.
SBM entered the Kenyan market in May 2017 after it acquired Fidelity Commercial Bank for a Sh100 cash consideration.
Other of similar dealings in the banking sector include the deal between between KCB Bank and National Bank. CBA recently merged with NIC Bank create a larger bank, NCBA