Imperial Bank placed under receivership
The Central Bank of Kenya (CBK) on Tuesday placed Imperial Bank Limited under receivership over what it terms as unsound and unsafe business conditions.
In a statement on their website, CBK said that it had put Imperial Bank under the management and control of the Kenya Deposit Insurance Corporation (KDIC) for a period of 12 months.
CBK is allowed by law to place an institution under receivership if, in its opinion, there exist unsafe and unsound conditions for transacting business.
“KDIC is working closely with the Board of Directors of Imperial Bank Limited for a resolution mechanism,” read the statement in part.
Imperial Bank Limited was founded in 1992 and has operations in Kenya and Uganda.
It is the second bank in Kenya to be put under management since August, when Dubai Bank Kenya Ltd, a small lender, was put under receivership after facing liquidity problems.
Imperial Bank, which appointed a new managing director in September after his predecessor died, was ranked 19 out of Kenya’s 45 lenders at the end of 2014. On June 30 this year, it reported assets of Sh70.3 billion ($683.85 million).
“Given the size of Imperial Bank, I don’t think it will have a knock-on effect on the entire industry,” said Francis Mwangi, head of equity research at Standard Investment Bank, noting the case had followed swiftly after the Dubai Bank Kenya incident.
“It raises the question of whether CBK has now become more vigilant and aggressive and whether we will see CBK raise more questions which could lead to more banks being put under the spotlight,” he added.
Imperial Bank could not immediately be reached for comment.
Additional reporting by Reuters
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