The partnership marks further consolidation in the East African nation’s banking industry, as the last four years, h in the financial domain of the country recorded a lot of merging and acquisition.
The decision to acquire the major stake of Jamii Bora Bank was established last month after shareholders of the Co-op backed the acquisition proposal and rights to appoint a new board to run the bank.
It would be recalled that initially, the acquisition deal between both parties was first disclosed last March. The deal is due for completion on Aug. 21, 2020, as mentioned by the country’s apex bank.
The Co-op Bank of Kenya holds about 159 branches across Kenya and South Sudan. Additionally, the bank is Kenya’s third-largest bank by market share with nearly 10 percent of the domestic market.
According to details shared by AllAfrica.com, The transaction has been concluded and Co-Op Bank will acquire 224.2 million ordinary shares in Jamii Bora Bank, in exchange for a Sh1 billion capital injection.
The bank will also profit from Jamii Bora’s customer base of over 444,000 people and 17 branches across the country.
On the other hand, Jamii Bora, which is principally focused on lending to micro-enterprises, is the second-smallest lender in Kenya with a market share of 0.09 percent.
“This transaction will enhance the resilience of the Kenyan banking sector,” the Central Bank Of Kenya said in a statement.
Since 2016, the banking industry in Kenya has become largely competitive, as 39 banks rival each other through several mergers and acquisitions deals.
Most partnerships are plausible to the failure of three mid-sized and small lenders, likewise the fixed cap on commercial lending rates, that was removed last November.