Be­lea­guered Chase Bank still in the dol­drums

The East African - - THE MARKET WHISPERER -

The ex­tended 18 months re­ceiver­ship pe­riod for Kenya’s trou­bled mid-tier lender Chase Bank is com­ing to an end on Oc­to­ber 6.

But there is still no break­through in terms of iden­ti­fy­ing a strate­gic in­vestor to take over the bank in the in­ter­est of de­pos­i­tors, long term cred­i­tors and share­hold­ers.

Last week, Cen­tral Bank of Kenya gov­er­nor Dr Pa­trick Njoroge told re­porters in Nairobi that the process of ac­quir­ing a strate­gic in­vestor was not go­ing at the pace he had ex­pected it to.

“There is no up­date at the mo­ment on Chase Bank. We did in­di­cate that we will be talk­ing to the se­lected bid­ders or in­vestors, we will be ne­go­ti­at­ing with them look­ing at their pro­pos­als and how they in­tend to deal with this bank (Chase Bank). Yes, that one has taken longer than ex­pected, but we are happy that we have moved this far. Let us be pa­tient, I urge the de­pos­i­tors to be pa­tient as we move this for­ward,” said Dr Njoroge.

In March this year, CBK and the Kenya De­posit In­sur­ance Cor­po­ra­tion (KDIC) ex­tended the re­ceiver­ship pe­riod of Chase Bank by six months, to Oc­to­ber 6, to al­low time for the bank to be sold to a strate­gic in­vestor.

CBK said the for­mal process of pick­ing a new in­vestor would take six months.

Last De­cem­ber, the bank­ing reg­u­la­tor had as­sured de­pos­i­tors that Chase Bank would be re­moved from re­ceiver­ship by the end of March 2017.

As the clock ticks to­wards the ex­piry of the bank’s re­ceiver­ship pe­riod, it re­mains un­clear what would hap­pen on Oc­to­ber 6, given that the bank’s share­hold­ers are also un­happy with the man­ner in which CBK and KDIC are try­ing to sell it.

Last month (Au­gust), the share­hold­ers through their lawyers An­jar­walla & Khanna Ad­vo­cates wrote to CBK and KDIC rais­ing con­cerns that they have not been al­lowed to par­tic­i­pate in the process of iden­ti­fy­ing a strate­gic in­vestor for the bank.

The share­hold­ers claimed that they had been kept in the dark through­out the process and that they plan on con­test­ing the out­come of the process.

Ac­cord­ing to the cor­re­spon­dence seen by The Eastafrican, the share­hold­ers want the process of bring­ing on board a strate­gic in­vestor to be suc­cess­ful by en­sur­ing that de­pos­i­tors’ in­ter­ests are 100 per cent pro­tected and that all re­struc­tur­ing op­tions en­sure full re­cov­ery of de­pos­i­tors’ funds.

They also want the in­ter­ests of long term cred­i­tors to be pro­tected and the bank sold as it is, with­out clas­si­fy­ing it in terms of it be­ing ei­ther a good bank or a bad bank.

Pic­ture:

Chase Bank clients after the bank was put un­der re­ceiver­ship. File

Newspapers in English

Newspapers from Kenya

© PressReader. All rights reserved.