Imperial Bank receivership extended again

Imperial Bank Head offices o at westlands PHOTO:BEVERLYNE MUSILI

Imperial Bank of Kenya shareholders and the industry regulator have another 90 days to try and resuscitate the ailing lender that has been under receivership for the past 20 months.

High Court extended the receivership period for another three months. In an emailed statement to newsrooms, Central Bank of Kenya (CBK) said the extension was also consented by shareholders and Kenya Deposit Insurance Corporation (KDIC).

“The consent given by these parties was without prejudice and unconditional - CBK consented to extension on the basis that more time is needed for further actions that would allow a fitting resolution of IBLR’s receivership,” said CBK.

The extension is the second from the court after a similar extension was granted on March 24 this year. Previously, CBK had also granted a six-month extension back on October 4, last year for the lender that was put under receivership on October 13, 2015.

The decision means that on October 19, 2017, KDIC which is the receiver manager, will as required by the law confirm to CBK whether or not the bank can be revived. Both outcomes carry different implications for depositors.

On December 2, 2015, CBK confirmed that 44,300 depositors or 89 per cent of the account holders had up to Sh1 million in their bank accounts.

Of these, KDIC confirmed that by March 31, 2016, 39,866 depositors had received their money back, in a Sh6.8 billion refund plan. To them, they only stand to lose the attachment they may have had with the bank should it be liquidated.

However, for the remaining about 5,700 depositors or 11 per cent who had more than Sh1.5 million, they will be crossing their fingers that liquidation of the bank will not be the eventual verdict as opposed to recapitalisation.

Liquidation would mean selling assets and letting depositors share out the proceeds, leading to possible losses if the amount collected will not be enough to compensate all their deposits.