Three local lenders join fray to buy Chase Bank

Chase Bank customers mill outside the bank’s Moi Avenue branch in Mombasa following its closure in April last year. Central Bank in March extended the bank’s receivership by 90 days. [FILE/Standard]

Central Bank of Kenya said in a notice on Tuesday 12 entities had expressed interest in acquiring the lender currently under the receivership of Kenya Deposit Insurance Corporation (KDIC).

Besides the local lenders, other suitors wooing the embattled bank include four foreign banks and five groups of institutional consortia.

The regulator said it had narrowed down on potential suitors although it declined to reveal the names or the exact number of those who have made the cut.

“The evaluation of the expressions of interest has now been completed and a shortlist of qualifying investors has been identified,” said CBK in the notice.

Short-listed investors will be granted access to comprehensive confidential data that will allow them to develop a formal proposal for taking an equity interest.

Sources at the regulator said after the process, it would be clear whether the parties would buy a specific stake, its cost and revival plan for the bank.

Insider lending

Despite the secrecy shrouding the planned acquisition, Kenya Commercial Bank (KCB) had expressed interest in Chase Bank, having handled its books as the receiver manager.

SBM Holdings of Mauritius, which had reportedly also expressed interest in buying the struggling lender is said to have cooled off interest after buying another local lender, Fidelity Bank.

CBK placed the mid-tier lender under receivership in April, last year after a bank run following re-statement of financial reports over allegations of insider lending.

It was, however, opened 20 days later, albeith with reduced functions.

The coming on board of a new investor would be good news to large depositors who have never been able to access their funds in full for over a year now.

The receiver managers set a Sh1 million withdrawal limit while some services such as electronic funds transfer, credit cards, loan applications, overdrafts, forex trading, foreign currency accounts, issuance of letters of credit and guarantees have remained frozen.

CBK had hoped to bring the lender back to its feet by the first quarter of this year, but fell short of timelines over protracted negotiations.

This time, CBK has set a June 9 deadline for the suitors to come up with concrete competitive plans for the lender that has a 62-branch network.

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