Imperial assets are auctioned for a song
Imperial Bank depositors and shareholders are in for bigger losses after it emerged that the lender’s assets are being sold at throwaway prices.
Some of the sale documents for the branches that have been put up for sale seen by The Standard paint a sad picture of asset stripping despite the bank having sunk with billions of shillings in deposits.
The Nakuru branch, for instance, which was snapped up by another local bank, the schedule of loose assets on sale shows a server room and all its equipment, including a radio, power back-up equipment, a Cisco phone and CCTV cameras were sold for a measly Sh31,500.
Furniture, fittings and all equipment, among them phones, desks, wooden cabinets and printers in the back office were, on the other hand, sold at a paltry 92,000, with most items being valued at between Sh1,000 and Sh5,000.
The strongroom that had three fireproof cabinets and a safe was disposed of at Sh220,000 in total.
It was the same trend for equipment in the customer service department, the relationship office, the meeting room as well as the manager’s office, where computers, printers and other electronic gadgets were disposed of for as low as Sh1,000.
Opening physical branches, in what is known in banking as brick and mortar expansion, is one of the most expensive costs. Banks spend millions on furnishings and high-end security installations to prevent losses and keep staff safe in case of a robbery.
Jamii Bora Bank paid Sh500,000 via cheque to Imperial Bank for the loose assets. Contacted for comment, the Kenya Deposit Insurance Corporation (KDIC) said the amount paid by Jamii Bora was not for the entire branch but only the assets.
“Jamii Bora Bank is only buying old used furniture and not the branch. Valuations were done and I believe this is value for money,” KDIC boss Mohammud Mohammed told The Standard on the phone.
He explained that the reason for selling the assets was to stop incurring unnecessary costs in rent.
But it will be difficult to justify this to shareholders and depositors, who have received less than a third of their money so far since the bank went under over three years ago.
Imperial BankKDICAssetsAuctionedJamii Bora Bank