Co-operative Bank reveals Sh1.5bn spend on Juba unit

Cooperative Bank Group managing director Gideon Muriuki (left) with Faida Investment Bank chairman Bob Karina shortly during the release of financial results for the 2013 financial year on March 19, 2014.   PHOTO/WILLIAM OERI/FILE/NATION

In Summary

• The government of South Sudan has a 49 per cent equity stake in the subsidiary.

By VICTOR JUMA
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Co-operative Bank spent Sh1.5 billion to acquire a 51 per cent stake in its South Sudan subsidiary, the lender has disclosed in its newly released annual statement.

The amount is more than double the capital outlay that the lender had initially estimated at Sh612 million, which Co-op Bank chief executive Gideon Muriuki had revealed in an interview with the Business Daily.

 

The government of South Sudan has a 49 per cent equity stake in the subsidiary.

The unit started operations in September last year with a single branch in the capital Juba.

The subsidiary made a pre-tax loss of Sh267.3 million in the year ended December, covering four months of operations, as interest and transaction-based incomes trailed the higher set-up costs.

Co-op, which is listed at the Nairobi Securities Exchange, expects the South Sudan business to start making profit this year.

The bank secured the right to offer banking services to the government and saccos as one of the benefits in the joint venture.

This article first appeared in the Business Daily.