Several banks miss CBK deadline to disclose shareholding structure

Central Bank Governor Patrick Njoroge. Not all the 42 banks were able to meet CBK’s directive to disclose shareholding structure by close of yesterday, a check by The Standard by press time can reveal. (PHOTO: COURTESY)

Not all the 42 banks were able to meet Central Bank of Kenya’s directive to disclose shareholding structure by close of yesterday, a check by The Standard by press time can reveal.

In what may open a can of worms between the regulator and the bankers, all the three banks under receivership - Chase Bank, Imperial Bank and Dubai Bank- had not posted on their websites their shareholding structure.

CBK said last evening that since the deadline was midnight, it was early to conclude that some lenders had not met the deadline or talk about the punitive measures for the banks that have failed to comply.

Others who had not posted the shareholding structure by the time we went to press included lower-tier lenders such as Bank of India, First Community Bank, United Bank of Africa and among other mid-sized banks.

However, there were lower-tier lenders such as Habib Bank, Middle East Bank Kenya, Prime Bank, Jamii Bora, Guardian bank and Bank of Baroda who had complied.

“We confirm that no other shareholder holds five per cent or more shares in the Bank of Baroda (Kenya) Ltd. The Managing Director and Deputy Managing Director of Bank of Baroda (Kenya) are holding one share each under ex-officio capacity,” discloses Bank of Baroda in its shareholding structure.

Credit Bank also provided the structure and went further to disclose that since the bank is currently raising more capital through private placement, its current shareholding is subject to change.

The July 20, directive for banks to disclose top shareholders on their websites was issued by CBK Governor Dr Patrick Njoroge in what was expected to help lift the corporate veil on banks.

In the directive, the governor had directed that banks will have to regularly update their shareholding, including those who hold at least five per cent of the bank.

This is a departure from the current practice where it is only the Nairobi Securities Exchange- listed banks that update their shareholding structure every month.

Banks must comply

According to Kenya Bankers Association CEO Habil Olaka, all banks are supposed to comply with the directive from the regulator.

“This is a directive from CBK. The question on whether or not they (banks) will comply cannot arise,” said Olaka.

However, the August 1 deadline may have passed unnoticed by some lenders, while others chose to package the disclosure in condensed form that may still make their ownership as closely guarded information.

For example, for Fidelity Bank, their disclosure of shareholding only shows ranges of shares and the percentage of people within a given range of shares. It does not give further details on names of the shareholders.

For wholly-owned subsidiaries it would be a long process for a shareholder to establish the shareholding structure. For instance, I&M Bank, which is wholly owned by I&M Holdings Limited, one will have to check shareholding information of the parent company.

“The shareholders of I&M Ltd include Proparco and Deg, two leading European Development Financial Institutions as well as a local and foreign institutions and individual investors,” reads their disclosure. Even for top-tier banks, the level of disclosure may still not be sufficient to lift the corporate veil.

Kenya Commercial Bank, which is the largest in the East African region by asset base, has only listed the shareholder profile as Government, local institutional investors, local individual investors and foreign investors. This is then followed by their number and percentage.

However, Central Bank official told The Standard it was early to comment on whether the level of disclosure was sufficient since the deadline was to lapse last night at 12am before any scrutiny could be done.