CBK receives Chase Bank audit report

A forensic audit on the operations of Chase Bank before it was put under receivership will be out today, The Standard has learnt. KPMG South Africa is expected to hand over the audit report to Central Bank of Kenya (CBK) and Kenya Deposit Insurance Corporation (KDIC).

CBK and KDIC will both act on the due diligence report for 30 days before deciding the next phase for Chase Bank’s recovery.

Chase Bank Receiver Manager Paul Russo, who is former human resource director at KCB, said KCB’s mandate that was to get Chase Bank operational – is now done, and the future of the lender now depends on CBK and KDIC.

“The due diligence had to be done by a third party to avoid conflict of interest on our part as KCB,” Mr Russo said. “There are so many interested parties in Chase Bank, among them shareholders, and we don’t want to be seen to be blocking anyone in the recovery process,” he added.

Russo said for long, KCB has been accused of having a conflict of interest in Chase Bank, and that is why KCB handed all the data required by KPMG South Africa and let the latter work independently.

Major shareholders

He was categorical that according to KCB CEO Joshua Oigara, who is his boss, KCB will make a bid for Chase Bank’s acquisition. And as a result, KCB is one party that is very interested in the due diligence. “We have done a lot of work in getting Chase Bank operational and we would not like it to go to waste. That is why we are interested in making a bid for the bank,” Russo said.

Also present when the due diligence will be handed over to CBK and KDIC, will be major Chase Bank shareholders, led by international shareholders who in July this year had threatened to go to court accusing KCB of ignoring them in the day-to-day running of the bank.

The international investors own 20 per cent of Chase Bank. They are DEG, a German investment firm, French firm Amethis Finance and Swiss venture equity firm responsAbility. KCB were the managers mandated to get the mid-tier lender out of receivership.

The receiver manager also said in Chase Bank’s four-month journey from receivership, the mid-tier lender had shown resilience by being able to transact Sh16 billion, and having 5,000 new accounts opened. The lender was given the green light to take deposits and advance lending two weeks ago by CBK. Under this, Russo said Chase Bank will be capping its lending rate at 14.5 per cent, as required by the new interest law, beginning September 1.