Mauritian bank makes offer to acquire Chase Bank

Mauritian bank makes offer to acquire Chase Bank
Customers stand outside a Chase Bank ATM shortly after the bank was placed under receivership

Mauritian baking group SBM Holdings has emerged as the front runner to acquire Chase Bank which has been under receivership since April 2016.

This follows SBM’s move to issue a non binding offer to take over part of the Chase Bank’s assets and liabilities pending the completion of due diligence on the lender.

The deal announced by the Central Bank of Kenya and the Kenya Deposit Insurance Corporation, offers a ray of hope to Chase Bank customers who have limited access to their funds since the bank partially reopened last year.

“Whilst the non-binding offer is still subject to confirmatory due diligence and a binding contract, it is expected that this transaction will inter alia ensure a substantial recovery for depositors currently under moratorium and a transfer of a substantial number of staff and branches of the existing CBLR operations,” reads a joint statement from CBK and the KDIC.

Central Bank of Kenya governor Dr Patrick Njoroge had on Friday met with Chase Bank depositors to inform them of the proposed deal.

Depositors who attended the meeting indicated that a structured draw down of funds had been agreed through the SBM acquisition deal which is set to be concluded by December 31.

One Chase Bank depositor who spoke to Citizen Digital on condition of anonymity indicated that depositors would be able to access 50 percent of their deposits from January while the rest of their funds would be recovered over a three year period.

It is understood that SBM has indicated that it will take over Sh57 billion in deposits held in the bank, with the banking regulator non committal on how depositors will access the remaining Sh19 billion.

The Central Bank has indicated that depositors are responsive to the proposed deal while SBM has also undertaken to retain a majority of the bank’s staff.

The partial access to funds will however not affect new customers who sign up with the bank.

“Non-moratorium depositors will continue to have full unrestricted access to their funds,” the regulator indicated.

SBM made its foray into the country’s banking sector earlier this year when it acquired Fidelity Bank in May.

The banking group however put in a substantive bid to acquire Chase Bank when the CBK called for expressions of interest to acquire the bank.

“Through this potential acquisition, and combined with its other operations in Kenya, SBM will bring its experience and expertise from Mauritius and other markets, to further enhance competitiveness and the resilience of Kenya’s banking sector,” the CBK said.

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