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Sale bid signals a bigger problem at Chase Bank

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Investors interested in taking over Chase Bank have three weeks to place their bids, signalling a shortage of money to return the bank fully on its feet. In a statement announcing the call for expression of interest released yesterday, Central Bank of Kenya says the process of selecting the winning bidder will take six months.

“This announcement commences a formal process of selecting a preferred investor for the bank, which it is hoped may be concluded within the next six months,” said CBK in a statement. It also throws the spanner in the works for KCB, which had shown strong interest to take over the bank. Analysts say KCB, which has been managing Chase Bank, may have changed its mind after discovering ‘something’ during this tenure.

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Chase Bank has had many suitors since it was placed under receivership in April 2016. Among them the bank’s foreign shareholders as well as KCB Group. The foreign shareholders include German investment firm DEG, French private equity fund, Amethis Finance and Swiss venture capital firm ResponsAbility.

“Shortlisted investors will be granted access to a comprehensive confidential data room to develop a formal proposal to acquire Chase Bank (Kenya) Limited,” the statement read.

The banking regulator said the process of determining the qualified investors will be fair. To facilitate the acquisition process, CBK extended Kenya Deposit Insurance Corporation (KDIC) term as the receiver-manager of the bank by another six months.

Announcing the extension of receivership, CBK said progress had been made towards a resolution of the bank’s problems. “Since the appointment, progress has been made towards a resolution of the bank’s receivership, with the objective of safeguarding the interest of depositors, creditors, and the wider public interest,” said CBK.

Chase Bank was a rapidly developing commercial bank, operating through 62 branches. The bank reopened with reduced activities on April 27, 2016, managed by KCB Bank. The bank has continued to operate and grow deposits from the date of receivership.

[crp]

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BT Correspondent
BT Correspondenthttp://www.businesstoday.co.ke
editor [at] businesstoday.co.ke
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