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Housing Finance (HF) joins list of firms interested in buying bank

By Moses Michira | April 12th 2016 at 00:00:00 GMT +0300

Mortgage lender Housing Finance (HF) yesterday joined the list of firms interested in acquiring the troubled Chase Bank.

HF will be bidding to bail out Chase Bank alongside Equity Bank, Sidian (owned by Centum Investments) and Kenya Commercial Bank, which also confirmed its interest yesterday.

"Yes, we are interested (in acquiring Chase Bank). We are in very early stages of the talks," HF Group Managing Director Frank Ireri told the Standard yesterday.

Chase Bank, which collapsed last Thursday and was placed under the management of the Kenya Deposit Insurance Corporation, had a strong business model, fashioning itself as the enterprises' lender.

Soon after its doors shut, previous rival banks showed interest in acquiring the business by injecting the requisite cash in exchange for a stake.

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"KCB is open to the potential consolidation in the market, but nothing specific has been pinned down. We continue to pursue various options and opportunities and cannot specifically discuss a particular entity," KCB spokesperson Judith Odhiambo said yesterday.

At the time it was taken over, its total customer deposits were estimated at Sh96 billion mobilised from more than 55,000 clients.

It also had 55 branches around the country, which would enhance its appeal to the prospective buyers.

HF with Sh70 billion worth of assets was established over 50 years ago and has operated purely as a home financier and developer for most of its life, before a regulatory review allowed it to provide commercial banking services about four years ago.

Such an acquisition could help it broaden its business in commercial banking, including collecting deposits through current and savings accounts, and offering regular loans in addition to its fledgling mortgage business. A wide branch network would work to boost mobilisation of customer deposits, which offer the cheapest source of funds for lenders.

HF is thought to be attracted by the clientele at Chase Bank that consist mostly of investment groups.

Housing Finance (HF) Chase Bank Equity Bank
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