Kenya Commercial Bank Group to wait longer for Imperial Bank assets

Imperial Bank head office at Westlands

The sale of Imperial Bank will not be concluded next week, before its three-year anniversary in receivership.

The lender’s receivership under the Kenya Depositors Insurance Corporation has been extended to January 2019 after the Kenya Tea Development Agency (KTDA), Central Bank of Kenya (CBK) and two others filed for consent.

An 70-day extension on the receivership granted on July 31 was set to end next week.

“The defendants and interested parties be at liberty to file their replies to the application within 15 days of the date hereof,” the consent application read in part.

KTDA and CBK will get an additional 30 days to make their own submissions before the defendants get 30 days - after which the CBK cohort gets another 15 days.

The case will subsequently be mentioned on January 15, 2019, while the bank remains in receivership.

Kenya’s biggest lender by assets, KCB, is seeking to buy the distressed lender, which went into administration three years ago.

The extension throws the timeline for the conclusion of the transaction into uncertainty, especially considering the process has dragged on for over three years.

Meet depositors

CBK has not given a clear indication of the transaction process, only offering that it will be a deal similar to the State Bank of Mauritius acquisition of 75 per cent of Chase Bank’s assets.

KCB is also holding its cards close to its chest on its offer, with CBK adding that the buyer is being persuaded to improve its offer in its quest to acquire Imperial Bank’s assets.

CBK Govenor Patrick Njoroge said during a Monetary Policy Committee press briefing last month that he would meet depositors at various points of the deal and communicate appropriately.

During the announcement of half-year results, KCB Chief Executive Joshua Oigara said the bank might take up to 90 days to conclude the deal on the structure of the sale and a further nine months to close it, given what was seen with Chase Bank.

“The resolutions depend on Central Bank of Kenya and Kenya Depositors Insurance Corporation. But if you look at the other lender, it took around nine to 10 months to close,” he said.

Chase Bank, which was put in receivership in April 2016, was opened after nearly two-and-a-half years.