Co-operative Bank picks Jamii Bora board
Steve Umidha @UmidhaSteve
Co-operative Bank of Kenya Ltd yesterday unveiled a new board for Jamii Bora bank, the lender it acquired recently, and aptly renamed Kingdom Bank Ltd.
The five-member board will be chaired by Margaret Karangatha and is expected to give a fresh impetus and a long-term lifeline to the mid-tier bank following approval by the Central Bank.
Anthony Mburu, from the group, where he was the director –Credit Management – has been tapped as the new entity’s Chief executive and will rely on his 25 years’ experience in the banking sector and notably in Risk and Credit Management to provide growth and needed leadership.
Co-operative Bank fully acquired a controlling 90 per cent stake of Jamii Bora Bank last month – a troubled lender that was also the target of CBA Bank, before the latter merged with NIC bank.
On March 10, Co-operative Bank published a cautionary announcement on discussions to acquire 100 per cent shareholding in Jamii Bora Bank Ltd, subject to due diligence, approvals of the respective boards and shareholders, and approvals of the regulatory authorities.
“The Transaction has now been completed and Co-op Bank appointed a new board as hereunder to drive the needed Transformation Agenda…pursuant to Central Bank of Kenya approvals, the former Jamii Bora Bank has changed its name and will now operate as “Kingdom Bank Limited”, said Co-op Bank of Kenya Chief executive officer Gideon Muriuki.
The new board will be expected to provide leadership and guidance to steer the new entity through transition and eventual integration within the Co-op Bank Group – a lender with over Sh513 billion asset base - and is largely owned by over 15 million member Kenya Co-operative movement.
The group also has five other affiliate subsidiaries including an insurance agency with a physical presence in South Sudan.
The announcement to buy Jamii Bora Bank was first made public on July 1 during Co-operative Bank’s annual general meeting in a deal that saw shareholders of Jamii Bora bank approve 90 per cent buyout of the bank.
Capital Markets Authority and the Competition Authority of Kenya both approved the Proposed Transaction on July 6 and August 3, respectively.
The transaction, to be undertaken through the payment of 224,153,154 new class of Ordinary Shares, will see Co-op Bank inject Sh1 billion into Jamii Bora and upon allotment of the new shares, Co-op Bank would be entitled to 90 per cent of the voting rights in the company, 90 per cent of the distributable profits of the company.
Last week, Co-operative Bank announced a Sh7.2 billion profit after tax for the first six months, in a 3.6 per cent dip in earnings due to Covid-19 knocks which led to a surge in loan provisioning.
The bank said profits fell from Sh7.5 billion in the same period last year, even though its pretax profits registered a growth of Sh.9.6 billion for the period, compared to Sh10.44 billion last year.
During that period, total operating expenses grew by 16 per cent from Sh12.6 billion to Sh14.6 billion due to higher loan loss provisions – in a period that saw the lender restructure Sh39.2 billion pandemic loans – to cushion customers against the impact of the novel coronavirus.