NAIROBI, Kenya, Dec 6 – Jamii Bora Bank Limited has received a Sh600 million equity investment from Chicago-based private equity fund Equator Capital Partners LLC, under its ShoreCap II fund.
The investment will see ShoreCap II become a significant shareholder of the bank with a 15 percent stake in the tier three bank.
Jamii Bora Bank becomes the 7th bank deal this year that has seen Fidelity and Giro commercial banks fully acquired with four other banks selling a majority stake to two investment firms, a SACCO and a commercial bank.
Speaking on the investment, Jamii Bora Chief Executive Officer Sam Kimani says Equator Capital’s international background and exposure will be of benefit to the bank in reinforcing its corporate governance structures while diversifying the shareholders’ mix.
“We are excited to have Equator Capital Partners as a strategic partner and significant shareholder of the bank. Their investment in JBBL is a testament to our sound strategy, stable financial position and commitment to creating tangible impact and enhancing banking value offered to SMEs across Kenya,” he explained.
ShoreCap II is Equator Capital Partner’s Sh 8billion international fund incorporated in Mauritius in 2009, focused on investments in small and medium-sized financial institutions in Asia and Africa.
The investment in Jamii Bora Bank marks the fund manager’s tenth investment in Africa, across 15 sub-Saharan African countries over the last 13 years.
Nathalie Gabala, Director of Africa Investments said the fund is aligned to Jamii Bora’s strategic focus as an SME lender. “It is a transitional period for the Kenyan banking industry. We believe Jamii Bora Bank’s strategic focus as an SME lender strongly resonates with our investment approach to
“Our investment approach is to deliver inclusive financial services that promote sustainable economic, social and environmental development through private sector investments. The bank is also managed by dedicated executives backed by a competent team and we look forward to collaborating with them to enrich their value to society and grow the Bank to a reputable high impact institution,” said Gabala.
Following the equity investment, Jamii Bora’s core capital has now hit Sh3.7 billion, with a customer base of over 400,000, served by 26 branches across the country.
Kenya’s banking sector experienced a 15 percent core earnings growth for the nine months ending September 2016, despite the challenging economic environment, according to a report by Cytonn Investments.
The report highlighted mergers and acquisitions will continue in the foreseeable future as banks look to shore up capital and gain competitive advantage.
Despite the challenging operating environment, Kenya’s banking sector remains one of the most profitable in comparison to other markets in Africa.
“With a sector valuation of 1.0x price to book and 5.4x price to earnings, we think that the sector has become fairly attractive for a long-term investor,” the report added.