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.
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