The banking regulator said in a gazette notice that the deal has received all the required regulatory approval, the latest being by National Treasury on August 4.
Co-op Bank early March opened talks to buy a majority stake in Jamii Bora Bank. The two parties valued the deal at KSh1 billion (US$9.26m), which was endorsed by Jamii Bora shareholders.
“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,” CBK said in a press statement.
Co-op Bank board resolution will be tabled at the lender’s next annual general meeting for ratification, CBK said.
In the deal, Co-op Bank has been issued with 224.1 million new “Class A” shares equivalent to 90 percent shareholding, while the stake of the existing Jamii Bora shareholders will be diluted to 10 percent.
Co-op Bank’s growth strategy has been more focused on expanding in Kenya as opposed to expanding beyond borders.
Global rating agency Moody’s had in April said that it expects Jamii Bora deal to serve as a springboard for Co-op Bank to raise the share of the loan book to the small and medium sized enterprises.
Co-op Bank started operations in 1965 and is predominantly owned by the 15-million-member co-operative movement. It is currently Kenya’s third largest bank by market share and fourth largest by assets.
Jamii Bora Bank on the other hand was established in 2010 after the acquisition of City Finance Bank by Jamii Bora Kenya Limited,a Micro Finance institution.
The bank enjoys a market share of 0.07% and operates 17 branches across the country.