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CBA buys Jamii Bora Bank for 1.4B
Sober
#1 Posted : Friday, January 11, 2019 8:15:46 AM
Rank: Elder


Joined: 11/27/2007
Posts: 3,591
WOW!!

1.4 Billion for 60%. I believe CBA are eyeing like 20% control of the banking sector.
African parents don't know how to say sorry.. the closest you will get to a sorry is a 'have you eaten'
Horton
#2 Posted : Friday, January 11, 2019 8:43:45 AM
Rank: Veteran


Joined: 8/30/2007
Posts: 1,407
Location: Nairobi
Sober wrote:
WOW!!

1.4 Billion for 60%. I believe CBA are eyeing like 20% control of the banking sector.


Jamii bora has been for sale for a while now
Pirate
#3 Posted : Friday, January 11, 2019 9:45:02 AM
Rank: Member


Joined: 4/4/2007
Posts: 88
Sober wrote:
WOW!!

1.4 Billion for 60%. I believe CBA are eyeing like 20% control of the banking sector.


I bought OTC shares for Jamii Bora back in 2014. Since the interest rate cap , the bank have been under performing with net losses for the past 2 yrs I think .
What would be the upside ( if any) for me as a shareholder as a result of the buyout ?
Knowledge is power , but action gets things done ...
Ericsson
#4 Posted : Friday, January 11, 2019 9:46:45 AM
Rank: Elder


Joined: 12/4/2009
Posts: 6,736
Location: NAIROBI
The bank wasn't going to survive in the coming years.The owners are happy for that deal.
jmbada
#5 Posted : Friday, January 11, 2019 9:58:25 AM
Rank: Member


Joined: 1/1/2011
Posts: 366
Ericsson wrote:
The bank wasn't going to survive in the coming years.The owners are happy for that deal.

Pretty sure that there will be swift regulatory approval. May not bode well for the NIC deal though.
Ericsson
#6 Posted : Friday, January 11, 2019 10:54:08 AM
Rank: Elder


Joined: 12/4/2009
Posts: 6,736
Location: NAIROBI
jmbada wrote:
Ericsson wrote:
The bank wasn't going to survive in the coming years.The owners are happy for that deal.

Pretty sure that there will be swift regulatory approval. May not bode well for the NIC deal though.


NIC deal will also go through.
Ericsson
#7 Posted : Friday, January 11, 2019 11:21:21 AM
Rank: Elder


Joined: 12/4/2009
Posts: 6,736
Location: NAIROBI
Mshwari to be spun off to Jamii Bora while CBA/NIC will focus on corporate and SME banking
jmbada
#8 Posted : Friday, January 11, 2019 11:27:20 AM
Rank: Member


Joined: 1/1/2011
Posts: 366
Ericsson wrote:
jmbada wrote:
Ericsson wrote:
The bank wasn't going to survive in the coming years.The owners are happy for that deal.

Pretty sure that there will be swift regulatory approval. May not bode well for the NIC deal though.


NIC deal will also go through.

Doubt that CBA can absorb and digest 2 different corporate cultures, balance sheets and client bases in one fell swoop.
My suspicion is that the earlier NIC announcement was intended to serve as a red herring to divert attention from other discussions on more easily-digestible acquisitions. Look specifically at the difference in tone betweeen the 2 announcements (as we all suspect by now, most journos are basically told what to write and what tone to set). One announcement was riddled with caveats and prevarication, while the 2nd announcement has been published as a fait accompli.
Ericsson
#9 Posted : Friday, January 11, 2019 11:31:16 AM
Rank: Elder


Joined: 12/4/2009
Posts: 6,736
Location: NAIROBI
Next to be sold is Sidian Bank.Punda aka Centum wamechoka
Ericsson
#10 Posted : Friday, January 11, 2019 11:47:30 AM
Rank: Elder


Joined: 12/4/2009
Posts: 6,736
Location: NAIROBI
jmbada wrote:
Ericsson wrote:
The bank wasn't going to survive in the coming years.The owners are happy for that deal.

Pretty sure that there will be swift regulatory approval. May not bode well for the NIC deal though.


"The lender has not released its half-year and third-quarter financials, having received an exemption from the Central Bank of Kenya (CBK) to facilitate the ongoing buyout."

"CBA was able to make an offer below book value because it expects to inject additional capital into Jamii Bora which, for instance, has suffered liquidity shortfalls.

The lender’s liquidity ratio stood at negative 11.1 per cent in March, far short of the minimum statutory requirement of 20 per cent. This means that its ability to meet short-term obligations is significantly limited."
jmbada
#11 Posted : Friday, January 11, 2019 11:48:11 AM
Rank: Member


Joined: 1/1/2011
Posts: 366
Ericsson wrote:
Next to be sold is Sidian Bank.Punda aka Centum wamechoka

My personal view is that no one should be acquiring a bank this year without significant due dilligence on their 2019 and 2018 AUDITED numbers under the new accounting rules.
But this is a purely personal view. If I were an MD, I would be completing my application for a reporting extension past March 2019.
Ericsson
#12 Posted : Friday, January 11, 2019 11:51:27 AM
Rank: Elder


Joined: 12/4/2009
Posts: 6,736
Location: NAIROBI
jmbada wrote:
Ericsson wrote:
Next to be sold is Sidian Bank.Punda aka Centum wamechoka

My personal view is that no one should be acquiring a bank this year without significant due dilligence on their 2019 and 2018 AUDITED numbers under the new accounting rules.
But this is a purely personal view. If I were an MD, I would be completing my application for a reporting extension past March 2019.



After the weak banks have been weaned out the interest rates cap law will be repealed in its entirety
watesh
#13 Posted : Friday, January 11, 2019 11:59:21 AM
Rank: Member


Joined: 8/10/2014
Posts: 709
Location: Kenya
Ericsson wrote:
Next to be sold is Sidian Bank.Punda aka Centum wamechoka

Centum should sell it and use the money to buy a stake in one of the big three banks and just focus on other sectors.
Swenani
#14 Posted : Friday, January 11, 2019 12:04:14 PM
Rank: User


Joined: 8/15/2013
Posts: 12,999
Location: Vacuum
watesh wrote:
Ericsson wrote:
Next to be sold is Sidian Bank.Punda aka Centum wamechoka

Centum should sell it and use the money to buy a stake in one of the big three banks and just focus on other sectors.

Sidian is very strategic to some people in terms of financing projects hence I doubt whether they will be willing to sell and buy a non controlling stake. They would rather make losses as a bank but have a access to credit faciliy which would otherwise be inacessible from other banks. The benefits far of having sidian as a bank far outweigh the cost of running it
Poverty is the root of all evil
jmbada
#15 Posted : Friday, January 11, 2019 12:05:48 PM
Rank: Member


Joined: 1/1/2011
Posts: 366
watesh wrote:
Ericsson wrote:
Next to be sold is Sidian Bank.Punda aka Centum wamechoka

Centum should sell it and use the money to buy a stake in one of the big three banks and just focus on other sectors.

....agree, but to sell, you need a buyer.
jmbada
#16 Posted : Friday, January 11, 2019 12:23:08 PM
Rank: Member


Joined: 1/1/2011
Posts: 366
Ericsson wrote:
jmbada wrote:
Ericsson wrote:
The bank wasn't going to survive in the coming years.The owners are happy for that deal.

Pretty sure that there will be swift regulatory approval. May not bode well for the NIC deal though.


"The lender has not released its half-year and third-quarter financials, having received an exemption from the Central Bank of Kenya (CBK) to facilitate the ongoing buyout."

"CBA was able to make an offer below book value because it expects to inject additional capital into Jamii Bora which, for instance, has suffered liquidity shortfalls.

The lender’s liquidity ratio stood at negative 11.1 per cent in March, far short of the minimum statutory requirement of 20 per cent. This means that its ability to meet short-term obligations is significantly limited."

I missed this post. I....kent....even....understand the acquisition rationale. Unless regulator driven to avoid a market rout
Ericsson
#17 Posted : Friday, January 11, 2019 2:17:05 PM
Rank: Elder


Joined: 12/4/2009
Posts: 6,736
Location: NAIROBI
Money is already in the bank account of Jamii Bora owners
the deal
#18 Posted : Friday, January 11, 2019 2:46:04 PM
Rank: Elder


Joined: 9/25/2009
Posts: 4,469
Location: Windhoek/Nairobbery
Looks like rate cap will only be lifted after they're done buying Laughing out loudly Laughing out loudly Laughing out loudly
Marthegorgeous
#19 Posted : Friday, January 11, 2019 3:02:09 PM
Rank: New-farer


Joined: 12/16/2009
Posts: 23
Location: NAIROBI
the deal wrote:
Looks like rate cap will only be lifted after they're done buying Laughing out loudly Laughing out loudly Laughing out loudly



In the rules of the jungle,survival is for the fittest.CBA is undisputed bank eater.Laughing out loudly Laughing out loudly Laughing out loudly
Sober
#20 Posted : Friday, January 11, 2019 3:16:15 PM
Rank: Elder


Joined: 11/27/2007
Posts: 3,591
jmbada wrote:
Ericsson wrote:
jmbada wrote:
Ericsson wrote:
The bank wasn't going to survive in the coming years.The owners are happy for that deal.

Pretty sure that there will be swift regulatory approval. May not bode well for the NIC deal though.


NIC deal will also go through.

Doubt that CBA can absorb and digest 2 different corporate cultures, balance sheets and client bases in one fell swoop.
My suspicion is that the earlier NIC announcement was intended to serve as a red herring to divert attention from other discussions on more easily-digestible acquisitions. Look specifically at the difference in tone betweeen the 2 announcements (as we all suspect by now, most journos are basically told what to write and what tone to set). One announcement was riddled with caveats and prevarication, while the 2nd announcement has been published as a fait accompli.


I believe the NIC deal was handles more carefully because of the long relations betweet the 2 big families. Additionally the deal included the CMA and other small shareholders like me with 100 shares i.e publicly listed company.

As for JBB, the deal can be equated to buying an item after a hawker flashing it to you on Tom Mboya Street as you head home one evening.
African parents don't know how to say sorry.. the closest you will get to a sorry is a 'have you eaten'
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