The Co-operative Bank of Kenya will acquire 90 percent stake in the struggling Jamii Bora Bank (JBB) effective August 21 after the transaction received approval from both the Central Bank and the National Treasury.
“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,” the regulator said in a statement on Friday.
Co-op Bank, which is majority-owned by the cooperative movement in Kenya, is the third-largest lender in the country with a 9.96 percent market share as at June 30 2020. It has a total of 159 branches in Kenya and South Sudan.
On the other hand, small-size lender JBB is ranked 38 out of 39 banks with a market share of 0.09 percent and 17 branches across the country. It was established in 2010 after micro-finance institution Jamii Bora Kenya Limited was acquired by City Finance Bank Limited.
Co-op Bank expects the acquisition to strengthen both institutions by leveraging on their respective domestic and regional corporate public sector.
This becomes the latest acquisition in the banking sector that has seen consolidation take shape.
Other such deals have been between KCB Bank and National Bank. CBA also came together with NIC Bank to form the NCBA.