You are here  » Home   » Business

Chase Bank staff stare at job losses over SBM audit

By Otiato Guguyu | Published Tue, October 10th 2017 at 00:00, Updated October 10th 2017 at 00:00 GMT +3
(Photo: Courtesy)

In summary

  • SBM is expected to table concrete and binding offer end-month after audit
  • CBK has received offer from Mauritius lender, setting stage for audit, with staff expected to reapply for jobs

The is anxiety among Chase Bank staff ahead of an audit by the State Bank of Mauritius, which is set to take over some employees and branches.

The Central Bank of Kenya said on Monday it had received the initial offer from State Bank of Mauritius (SBM), setting the stage for due diligence expected to now commence.

“The non-binding offer includes the acquisition of certain assets and matched liabilities from Chase Bank Ltd in receivership,” the CBK notice to the public read.

SBM is expected to assess the performance of Chase Bank’s 62 branches and Rafiki Microfinance for productivity, profitability and overhead costs. It is also expected to shut some branches and shed staff.

Sources said Chase Bank employees expect that they may be required to apply afresh for jobs.

Employees will also be keen on salary structures as well as terminal benefits under a new owner. A source at SBM, formerly Fidelity Bank, said the Mauritius lender did not review workers’ salaries and benefits when they acquired it for Sh100 in May this year.

Once the audit is complete, SBM is expected to table a concrete and binding offer at the end of the month. And CBK expects the acquisition of Chase Bank’s prime assets to be completed by December 31.

Know if news is factual and true. Text 'NEWS' to 22840 and always receive verified news updates.

Market capitalisation

The Stock Exchange of Mauritius-listed lender has a market capitalisation of about Sh72.3 billion ($700 million), with the Mauritius government as a significant shareholder.

Total assets are in excess of Sh516.5 billion ($5 billion). The apex bank believes that SBM will provide stability for the banking sector while offering depositors a less painful path to recover part of their money stuck in Chase Bank for one-and-a-half years.

About 3,100 large depositors whose money was stuck with the ailing lender will have access to a quarter of it, Sh14.25 billion, which will be deposited in a current account.

Another Sh14.25 billion will be put in a savings account earning an interest of seven per cent, which can either be withdrawn or saved up with the Mauritius lender.

The rest of the Sh28.5 billion will be set aside as term deposits, attracting a seven per cent interest. It will be paid to the customers in three years, in tranches of Sh9.5 billion each.

The 180,000 new customers who deposited cash with Chase Bank when it was in receivership will have full access to their Sh5.9 billion.

Would you like to get published on Standard Media websites? You can now email us breaking news, story ideas, human interest articles or interesting videos on: [email protected]