Documents delay Chase Bank takeover bid

Central Bank of Kenya headquarters in Nairobi (PHOTO: FILE)

NAIROBI, KENYA: The much-anticipated takeover of Chase Bank has been put on hold in what insiders attributed to confusion in gazetting the switchover.

The Central Bank of Kenya (CBK) was supposed to publish the takeover bid of the troubled lender by the State Bank of Mauritius (SBM) on Friday, but failed to do so after information emerged that documentation was not ready.

SBM’s head of communication, Joseph Karamoja, however said the delay was caused by a mix-up in the timing, but that the process would be completed in the course of the week.

“We have all the approvals in place, so I think it was just normal delays in the time of publishing. It will probably be done in the course of the week,” Mr Karamoja said yesterday.

Chase Bank staff had prepared for the anticipated switchover. They were anxious to know the terms of their new employer. However, they will now have to wait longer.

Depositors are also keen to know when they will access some of their funds under the agreement that would see them transact part of their cash off SBM counters.

About 180,000 new customers who deposited money in Chase Bank after it was placed in receivership are supposed to have full access to their Sh5.9 billion.

The rest of the 3,100 customers whose money was stuck with the lender will have access to a quarter of their cash (Sh14.25 billion) which will be deposited in a current account.

Another Sh14.25 billion will be put in a savings account, earning interest of seven per cent, which can either be withdrawn or saved with the Mauritian lender.

Term deposits

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

Chase Bank has been in receivership since April of 2016, after it experienced a run that almost crippled it.

CBK could not find a suitable buyer and agreed to the SBM deal that would see it take only the good books and offer them to the Mauritius lender.