Beleaguered Chase Bank still in the doldrums
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.
Chase Bank clients after the bank was put under receivership. File