CBK to conclude sale of Chase Bank majority stake in Q1 2017

The Central Bank of Kenya (CBK) has issued a final call to investors willing to take a majority stake in Chase Bank.

The regulator has been searching for a credible, well-funded investor to acquire the bank after it was placed under receivership in April.

According to CBK Governor Dr Patrick Njoroge the regulator has already received interest from at least five international bidders but is extending the offer period.

Dr Njoroge added that they will be advertising the sell out positions to investors in two weeks’ time.

He made the revelations while meeting with depositors at a Nairobi hotel on Thursday as part of reassurance that the bank will resume normal operations.

Details of the deal remain scanty, with the regulator keen to conclude by the end of the first quarter of 2017.

The KCB Group, which was in April appointed as the bank’s receiver manager, was initially given the first bite of the cherry in making its bid for a stake in the bank.

KCB has however over the last few months said acquiring a local bank was not part of its strategic plan.

During the meeting, Dr Njoroge also revealed that depositors may be urged to voluntarily covert part of their deposits into an equity stake in the bank.

The regulator appointed KPMG South Africa to carry out a due diligence study on the bank to be presented to potential suitors.

Dr Patrick Njoroge has in the past said that Chase Bank represents an attractive bank with 27,000 customers, largely SME businesses.

Further disclosures by the banking regulator showed that Chase also banked 341 non-governmental organizations and 147 savings and credit cooperative societies.

Chase Bank depositors have increasingly grown wary of the failure to access their funds despite the bank being reopened three weeks after its closure.

Upon reopening, customer withdrawals were capped at Sh1 million, with only 167,290 account holders having full access to their savings.

This saw large depositors with above Sh100 million call for a meeting in September seeking to get the regulator’s attention.

Report by Mumbi Warui & Sophie Kinoti