FEATURED STORY

It’s end of the Chase (Bank)?

FRANCIS MULIOct 9, 20171.6k

Chase was placed under receivership in April last year following a run on the bank that was precipitated by reports that it was facing a serious liquidity problem.

Central Bank of Kenya (CBK) and Kenya Deposit Insurance Corporation (KDIC) have announced that they have received a non-binding offer from SBM Holdings Limited (SBM) with respect to Chase Bank (Kenya) Limited (In Receivership) (CBLR), as part of the Expression Of Interest (EOI) process announced on March 30, 2017.

The non-binding offer includes the acquisition of certain assets and matched liabilities from CBLR. Whilst the non-binding offer is still subject to confirmatory due diligence and a binding contract, it is expected that this transaction will inter alia ensure a substantial recovery for depositors currently under moratorium and a transfer of a substantial number of staff and branches of the existing CBLR operations.

Non-moratorium depositors will continue to have full unrestricted access to their funds. CBK and KDIC met with CBLR depositors and shareholders on October 6, 2017, and who were supportive of the non-binding offer.

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Chase Bank was a rapidly developing commercial bank, operating through 62 branches. CBK placed Chase Bank (Kenya) Limited into receivership on the 7 April 2016.

The Bank re-opened with reduced activities on 27 April 2016, managed by Kenya Commercial Bank up to date.

SBM is a leading financial services group and the third largest company listed on the Stock Exchange of Mauritius, with a growing international presence currently extending to Madagascar, India and Kenya, where SBM acquired Fidelity Bank in May 2017.

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SBM has a market capitalisation of approximately Ksh70 billion ($700 million), with the Government of Mauritius as a significant shareholder, and total assets in excess of Ksh500 billion ($5 billion).

CBK and KDIC assess that SBM’s non-binding offer represents a viable proposal for the substantial resolution of CBLR, for the benefit of depositors and the strengthening of the Kenyan financial sector. If agreed, it is expected that the proposed transaction will be concluded by the end of 2017.

Written by

FRANCIS MULI -

Editor and writer, Francis Muli has a passion for human interest stories. He holds a BSc in Communication and Journalism from Moi University and has worked for various organisations including Kenya Television Service. Email:[email protected]