12 investors put in bids for Chase Bank majority stake

A total of twelve investors have shown an interest in acquiring a majority stake in Chase Bank which has been under receivership for over a year.

The 12 investors are a mix of banks, financial institutions and consortia interested in expanding their presence in the Kenyan banking sector.

According to the Central Bank of Kenya (CBK) three local banks are in the mix to take up a strategic ownership of Chase Bank.

The banking regulator did not however reveal which banks had expressed interest.

“During this period, a total of 12 replies to the EOI were received. The respondents comprised of three Kenyan banks, four foreign banks, and five other financial institutions and consortia,” the central bank said in a statement late on Tuesday.

Chase Bank was initially partially re-opened under the statutory management of the KCB Group which was seen as a front runner to acquire the bank and lit it out of receivership.

KCB has however since dimed its prospects in acquiring Chase Bank only indicating that the bank was back on sound financial standing.

The central bank had in March indicated that it hoped to conclude the sale process in six months.

The CBK is expected to shortlist qualified investors based on their ability to revive the bank and aid in the recovery of deposits.

“The Shortlisted Investors were determined using appropriate and objective criteria based on, inter alia, regulatory imperatives and prudential guidelines which will ensure a speedy and optimal recovery for depositors, creditors and other stakeholders of Chase Bank, whilst also mindful of seeking to preserve and develop a sound and innovative banking system in Kenya,” CBK said.

It was not immediately clear how many of the 12 initial investors had been shortlisted.

“Shortlisted investors and other respondents have been informed of the outcome of this process,” the regulator said.

The shortlisted investors will now be given access to Chase Banks books to help them make a more informed decision on whether they would like to proceed with the buyout.

Interested buyers will have until June 9 to submit their bids.

Chase Bank’s challenges are tied to the discovery of Sh16.6 billion in suspicious insider loans issued to directors and senior managers.

Already the Central Bank and the Kenya Deposit Insurance Corporation have moved to court, suing former chairman and shareholder Zafrullah Khan and top directors for Sh14 billion.