Central Bank invites bids for Chase Bank majority stake as receivership extended to September

Central Bank invites bids for Chase Bank majority stake as receivership extended to September
Customers stand outside a Chase Bank ATM shortly after the bank was placed under receivership

Chase Bank customers will have to wait until September to access their funds still locked in the bank.

This after the Central Bank of Kenya (CBK) and the Kenya Deposit Insurance Corporation (KDIC) extended the receivership period by six months as begins the search for a new strategic investor.

The move comes even as the banking regulator has made remarks in the past that it was close to getting a suitable investor to take up a majority stake in the bank.

In a statement, the central bank said the formal process of picking a new investor will take six months.

“Following the receipt and evaluation of EOIs, a shortlist of qualifying investors (“Shortlisted Investors”) will be granted access to a comprehensive confidential data room to develop a formal proposal to acquire Chase Bank (Kenya) Limited,” the bank said in a statement.

Prospective bidders will have until April 21 to show interest in acquiring the bank.

The central bank has not made it clear what percentage of the  bank will be up for sale.

Chase Bank was placed under receivership on April 7, 2016 after the emergence of questionable insider lending practices.

The revelation led to a run on the bank that saw the central bank move to place it under receivership to protect depositor funds.

The bank was subsequently partially reopened 20 days later under the joint receiver management of KDIC and the KDIC.

“The Bank has continued to operate and grow deposits from the date of receivership,” the central bank said in an Expression of Interest to investors.

Chase Bank customers can currently only access Sh1 million of their funds but can continue making deposits.

Large Chase Bank customers have over the receivership period called for quick resolution of the bank’s status.

Kenya’s banking sector was rocked after several banks were placed under receivership over poor management.

Dubai Bank which was placed under receivership in August 2015, is already up for liquidation while Imperial Bank remains under receivership.

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