The Central Bank of Kenya (CBK) and the Kenya Depositors Insurance Corporation (KDIC) have announced the acceptance of a Binding Offer from KCB for the purchase of Imperial Bank Ltd, which has been in receivership.
In a joint statement, CBK and KDIC said the offer represents a viable proposal for the resolution of the receivership, for the benefit of depositors and the strengthening of Kenya’s financial sector.
The Binding Offer accepted, includes granting of access to 12.7% of eligible depositors balances remaining in IBLR within 14 days of the announcement, subject to account and identity verifications.
“Combining this with earlier disbursements will result in a total recovery of approximately 35 percent of original eligible deposits held at the date of receivership. In the Binding Offer outlines that KCB will complete the loan verification process within the first quarter of 2019,” said the statement.
It added that the loan verification process will result in further recovery of eligible depositors of IBLR. Further details will be communicated upon completion of the exercise.
It is expected that the transaction will be completed upon the execution and operationalisation of the Binding Offer.
KCB first made a Binding Offer on September 27,2018 before communicating on December 7 seeking modification of terms with regard to release of depositors’ funds and verification of loans.
Imperial Bank collapsed after it emerged that it was operating two sets of books, with a potential fraud of $449 million Ksh 44.9 billion).
Depositors had asked CBK and KDIC to push KCB to give a better deal after it emerged that the latter had offered depositors less than 40% of their deposits.
The process was also delayed after the High Court allowed Kenya Tea Development Authority’s request to extend the bank’s receivership to January next year in order to negotiate for a better offer with KCB. The firm had deposits amounting to Ksh 2.9 billion at the lender when it collapsed.
