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NEWS & CURRENT AFFAIRS

The Nairobian

Cooperative Bank plans to acquire Jamii Bora

Business

By Fredrick Obura | Mar 11, 2020

Jamii Bora Bank building in Nairobi (PHOTO: FILE)

Cooperative Bank has proposed to acquire Jamii Bora Bank in a move Central Bank says will enhance the stability of the Kenyan banking sector.

The proposed acquisition, which is subject to regulatory approvals, will lead to the acquisition of 100 percent shareholding of Jamii Bora Bank by the Co-operative bank.

The deal is a continuation of the merger and acquisition wave that has taken over Kenya’s banking industry in the recent past.

In January, Central Bank announced the acquisition of 100 percent of Transnational Bank Plc shareholding by Access Bank Plc effective February 1, 2020.

CBK approved the transaction on December 24, 2019 under Section 13 (4) of the Banking Act. The National Treasury Cabinet Secretary, National Treasury also approved acquisition under Section 9 of the Banking Act.

Reuters in December reported that Egypt’s Commercial International Bank is looking to buy a controlling stake in Mayfair Bank linked to politician Peter Kenneth.

Mayfair, which opened its doors in August 2017, has about five outlets and assets of Sh8.2 billion, according to its financial statement for the nine months to the end of September. It posted a loss of Sh250 million in that period.

Recent deals in the sector include the merger of NIC Bank and CBA Group to form NCBA, and the acquisition of the National Bank of Kenya by KCB Group.

Equity Group, which is one of the top banks, has looked slightly further afield, announcing a series of acquisitions in the Democratic Republic of Congo and other African countries this year.

With more than 40 banks in the market, many analysts have said the sector is overbanked and that consolidation was the way out, especially for mid and lower-tier lenders.

“We are not done yet and there is all indication of more market-driven consolidations in the banking sector,” said Central Bank of Kenya Governor Patrick Njoroge.