Business

Chase Bank depositors to finally access their money

Funds locked up for two-and-a-half years will be available at the rebranded SBM Bank Kenya counters as from August 20

State Bank of Mauritius (SBM) Bank Holdings Ltd is set to complete acquisition of Chase Bank Kenya Ltd (In Receivership) (CBLR) on August 17, and thereafter begin rebranding.

Following the acquisition, customers whose funds have remained locked up in Chase Bank over the last two-and-a-half years will be able to access them at the rebranded SBM Bank Kenya counters on August 20.

Andrew Bainbridge, SBM Holdings Ltd Group chief executive officer, said that by August, the bank will have more than 60 branches, 800 employees and will become a mid-sized lender. The lender, he said, would take the majority of Chase Bank branches, IT infrastructure, offer employees new terms of service and carry a “substantial portion of the loan book”.

According to the approval by Central Bank of Kenya (CBK), SBM Bank Kenya was to assume 75 per cent of the value of deposits under moratorium at CBLR, all non-moratorium deposits at CBLR and will take on the majority of CBLR branches and employees. KCB Bank Kenya had been appointed to manage Chase Bank Ltd (In Receivership) as receiver-manager by Kenya Deposit Insurance Corporation (KDIC) in a bid to have a framework that could allow the bank deal with maturing deposits, take new deposits, open up new lending and while also conducting a due diligence on Chase Bank. The move comes as Kenya Commercial Bank of Kenya Ltd said it will hand over Chase Bank Ltd (In Receivership) to CBK by the end of this month after managing it for nearly two years.

CBK agreed to the offer from SBM Holdings after it won the bid against 12 shortlisted financial contenders including Kenya’s tier-one banks which viewed Chase Bank as a salvageable and lucrative financial institution catering for the small and medium-sized enterprise (SME) market.

Second acquisition

This was the second acquisition SBM Holdings is acquiring in East Africa after it bought Fidelity Bank in May last year.

“This landmark transaction will enable the SBM Group to grow SBM Kenya from a tier-three bank to a strong tier two bank within a year of its creation”, SBM Group Chairman, Kee Chong Li Kwong Wing, said.

He said the move was also in line with the group’s internationalisation strategy to have a greater regional presence, taking its footprint beyond Mauritius into the Asia-Africa corridor. KCB Group Chief Executive Officer, Joshua Oigara said the new development is an endorsement of the Kenyan banking sector’s ability to effectively deploy globally benchmarked solutions.

Binding offer

“The handover marks a significant milestone in the prudent management and successful resolution of a local bank in receivership, following the receipt and acceptance of a binding offer for CBLR by the regulators,” he said.

Chase Bank was placed under receivership when it failed to meet its financial obligations. The Kenya Deposit Insurance Corporation was appointed as the receiver-manager.

SBM Holdings Ltd is the third largest listed company on the Stock Exchange of Mauritius and had an asset base of more than $.5.6 billion (Sh564 billion) as at December last year.

It has operations in India, Madagascar and Kenya. It owns the second largest commercial bank in Mauritius (SBM Bank Holdings Ltd).

 

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