Chase Bank is now officially State Bank of Mauritius (SMB), with the erstwhile troubled lender reopening its doors to the public on Monday.
The reopening and name change marked the culmination of the country’s first ever carve-out deal in the banking sector.
SBM Holdings Chairman Kee Chong Li Kwong Wing speaking at the reopening ceremony in Nairobi said the bank had taken up 825 staff from Chase, allaying fears of potential job losses for employees of the lender that had been in receivership since April 2016.
He said SMB had also taken up some assets and liabilities as well as several branches.
“We have taken up over 825 staff, that is 825 Kenya families which we are looking after,” Mr Wing said. The reopening will also come as a big relief to the about 180,000 new customers who deposited money in Chase Bank after it went into receivership as they will now have full access to their deposits totalling Sh5.9 billion.
The rest of the 3,100 customers whose money was stuck with the ailing lender will have access to a quarter—Sh14.25 billion— which will be deposited in a current account.
Another Sh14.25 billion will be put in a savings account, earning interest of seven per cent, which can either be withdrawn or saved up with the Mauritian lender.
Parent lender
The rest of the Sh28.5 billion will be set aside as term deposits attracting seven per cent interest and will be paid to the customers over a period of three years in tranches of Sh9.5 billion each.
Central Bank of Kenya (CBK) Governor Dr Patrick Njoroge said the acquisition does not involve Rafiki Bank, although a solution for the microfinance bank would be easier now that the parent lender sell-off has been concluded.
He also said both CBK and Kenya Deposit Insurance Corporation would continue to pursue Chase Bank’s other assets to continue compensating depositors, creditors and other stakeholders with the failed lender.
SBM entry into the Kenya market marks a milestone for the Indian Ocean island lender as it seeks a piece of the larger East African market.
The market is still waiting to probe the size of its books since it has not been publishing quarterly audits since it took over Fidelity Bank.
However, Mr Wing said they hope to double their balance sheet in the short-term which may build its portfolio to Tier II status.
