Chase Bank deal awakens Dubai and Imperial bank woes

Chase bank customers view a notice pinned on the entrance of the bank's River road branch in Nairobi after it was placed under receivership for one year by Central bank of Kenya on 07/04/2016.
Chase Bank staff are a worried lot despite being assured that majority of the 700 plus workforce will be absorbed by the State Bank of Mauritius (SBM).

SBM has only rejected 34 workers after the lender issued letters to employees this week but has put all of them under a six-month probation.

The workers are now worried that they are walking a tightrope given the nature of the Mauritius lender’s human resource structure.

SBM currently has a total of 1,889 for 62 branches spread out in Mauritius, Madagascar, India and recently Kenya. Hence, the Chase Bank workforce is half of the entire SBM’s.

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“People know that more are going home, we know they are not saying it but the Chase Bank Group is bigger than their local operations,” a source told Weekend Business.

It does not help that SBM is set to close 10 of the 62 branches that belonged to Chase Bank, which will mean less staff will be required.

“As you may already be aware this transition is being undertaken on the basis of the acquisition of certain assets. In the view some branches, effective August 20 will no longer be operational,” Chase Bank said in a notice.

Branches in Bondeni, City Centre, Delta, Eastleigh Branch 1, Eldoret Express, Garissa, Kayole, Kisumu Express, Pangani Express and Parklands will be closed.

However, Chase Bank staff will still walk away with a sweet deal that will have them get 15 days pay for every year worked and full month’s pay in lieu of notice by August 18. They have also been offered access to contributed pensions. The Chase Bank staff have been offered the same perks they were receiving at the failed lender which was running a Sh1.7 billion bill annually in 2014.

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But even as Chase Bank deal is being concluded, the other two lenders Imperial Bank and Dubai Bank that also went belly up are now kicking up a storm.

Turned down bids

Reports indicate that Kenya Deposit Insurance Corporation and Central Bank of Kenya have rejected bids for Imperial Bank placed by Diamond Trust Bank and Kenya Commercial Bank setting the stage for another Expression of Interest.

Both CBK and KDIC did not respond to our questions on the veracity of the reports. CBK earlier said that offers had been so lacklustre that it turned down the bidders.

“CBK and KDIC have assessed these proposals, and have gone back to the bidders with a view to improving these bids, in order to maximize the value for depositors. We expect to receive the revised proposals shortly,” CBK Governor Patrick Njoroge said in April.

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DTB is said to have offered to take 30 per cent of their books while KCB wanted liquidity support but their offer still remains undisclosed.

The other lender, Dubai Bank, which is facing liquidation now wants to get into the picture with its owner Hassan Zubeidi writing to KDIC offering to pay depositors with his own money to reduce the lender’s liabilities.

“From my engagement with the depositors made strictly on a without prejudice basis, I offered to give them some of my personal properties in exchange for their deposits,” Mr Zubeidi said.

He claimed that under the liquidator, 99.5 per cent of loans are not being serviced blaming the receiver manager for not aggressively pursuing litigations that could bring funds to the bank.

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SEE ALSO :Chase Bank deal boosts SBM profits

SBMChase BankState Bank of Mauritius