KCB Group, Kenya’s biggest bank by assets, said on Monday it was open to taking part in consolidation in the banking sector but declined to comment on whether it was pursuing Chase Bank, put into receivership last week.
“KCB is open to the potential consolidation in the market but nothing specific has been pinned down,” KCB said in a statement to Reuters today.
There has been speculation in local media that KCB might be looking to buy Chase Bank, which was taken over by Kenya’s central bank last Thursday. This followed a run on Chase’s deposits prompted by fears over the mid-sized bank’s finances.
Analysts said the central bank’s action could hasten consolidation in Kenya’s banking market.
Chase Bank was the third bank to be taken over by the central bank in nine months, causing uncertainty over the health of the sector, where gross non-performing loans rose sharply in volume last year. With 43 commercial banks in Kenya, there have long been expectations of some consolidation.
Central Bank of Kenya Governor Patrick Njoroge said on Sunday they were working to get Chase Bank open as soon as possible and that Chase had attracted interest from both local and foreign investors, which he did not name.
KCB’s chief executive, Joshua Oigara, told Reuters last month they were shopping for a mid-sized bank and they were building up a war chest for a potential deal.
“We continue to pursue various options and opportunities and cannot specifically discuss a particular entity,” KCB said in its statement on Monday.
Chase Bank was ranked the 11th largest lender out of 43 last year, with assets of 120 billion shillings ($1.19 billion), mainly drawn from small and medium firms, which offer better margins than retail and corporate segments. (Reuters)
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