Jamii Bora Bank Shareholders Approve Co-op Bank investmentJuly 02, 2020
At an Extraordinary General Meeting held virtually on 1st July 2020, the shareholders of Jamii Bora Bank overwhelmingly approved a 90% acquisition of the Bank by Co-operative Bank of Kenya. The meeting was held following extensive discussions, a detailed due diligence, and an approval by the Board of Jamii Bora Bank of a legally binding offer made by Co-operative Bank to make a strategic investment into the lender.
Co-operative Bank is an established Tier I banking group currently ranked as the 4th largest commercial bank in Kenya offering universal banking with a special focus on the important 15-million-member co-operative movement. The Bank currently boasts 159 branches with close to 10% market share and a total asset base of Kes 450 billion.
The two banks announced their intention on March 12th, 2020 to progress discussions that would lead to Co-operative Bank acquiring Jamii Bora Bank and received endorsement from Central Bank of Kenya and the Capital Markets Authority. Since then Co-operative Bank has completed a thorough due diligence of Jamii Bora Bank’s business and received Board approval to make an offer to the Board of Jamii Bora Bank on 2nd June 2020.
The endorsement by Jamii Bora Bank shareholders represents an important milestone in the process and what remains is contracting and signing of agreements that will give way to the initial capital injection of Kes 1 billion.
Jamii Bora Bank has 17 branches across the country and has built significant competence in providing trade finance solutions to micro, small and medium sized enterprises. These include easy to access overdrafts, LPO and Invoice Discounting, payment, bid and performance guarantees, import and export letters of credit that have been designed to support local entrepreneurs drive their turn overs and grow their businesses.
“The investment could not have come at a better time when entrepreneurs need a business minded bank to help them get back on their feet following the worst of the COVID 19 pandemic” said Timothy Kabiru, acting CEO at Jamii Bora Bank.
Following the closure of some local banks in 2015 and 2016, the lender has endured some liquidity pressure which curtailed its ability to lend aggressively in the market and the investment from Co-op Bank is set to address these challenges and place the Bank back on to a growth path with a quick turnaround to profitability. “The investment will also restore much needed confidence from existing and potential customers, as Co-operative Bank is a first-class solid banking institution with a proven track record” Kabiru adds.
JBB’s board of directors considers that the approved transaction is in the best interest of the company’s shareholders, depositors, creditors and other stakeholders, as it will provide the Bank an opportunity to turn around its financial position.