The purchase of financially distressed Jamii Bora Bank by CBA has been shelved after Commercial Bank of Africa (CBA) merged with NIC Bank.
At the beginning of last year, Jamii Bora Bank revealed plans of its acquisition by CBA. The Bank’s Acting CEO Tom Kabiru said that the transaction was an indication of the need for new capital injection into Jamii Bora.
CBA is said to have made a KSh1.4 billion offer to buy out Jamii Bora Bank. This acquisition bid of Jamii Bora came a month after CBA and NIC Group PLC commenced merger discussions.
Unaudited accounts for financial year ended 31st March 2018 indicate that the size of Jamii Bora Bank balance sheet shrunk to KSh 12.5 Billion compared to KSh 15.3 billion at 31st March 2017.
Total Interest Income also fell from KSh 414.9 Million to KSh 264.9 Million during the period under consideration. Customer deposits declined from KSh 220.7 Million to KSh 99.8 Million.
The Bank made a loss of KSh 51.3 Million from a loss of KSh 100.7 Million in the first quarter of 2017 financial year.
The portfolio of non-performing loans increased from 2 Billion in March 2017 to KSh 2.2 Billion at the end of the first quarter of 2018.
Jamii Bora Bank had set ambitious targets of becoming a middle tier bank by the end of 2018, with a key focus on middle and small-sized businesses.
Among its notable cutting edge financial innovations is the tender hub- a resource space for entrepreneurs and business people to access tender listing, support in applying for tenders and training in tender processes.
While Jamii Bora has faced stiff competition at the low end of the credit market, its investments in loss making Uchumi Supermarket and Kenya Airways, could be the load that finally broke its back.