Following the receivership of Chase Bank Kenya over financial trouble, the Central Bank of Kenya (CBK) has announced that the bank will reopen on April 27 under the Kenya Commercial Bank’s (KCB) management.
Customers will have immediate access to their deposits up to a maximum of Sh1 million, CBK says.
167,290 accounts, equivalent to 97 per cent of accounts or 6 per cent of total deposits, will have their funds available in full.
The deal with Kenya Deposit Insurance Corporation, signed at 8.30am on Wednesday, will see the bank’s 62 branches reopened by next Wednesday, April 27 2016.
The CBK had received nine proposals, including six from local investors, two foreign and one from existing Chase Bank shareholders. The bank’s shareholders had proposed to inject more cash for its revival.
KCB was chosen for their offer to re-open the bank immediately as well as their credibility and cash to support operations. The reopening will be followed by their eventual acquisition of a majority stake in the bank.
Other announcements from the acquisition are as follows
- Deposits in excess of Ksh.1 million will be made available in a structured manner, details of which will be released in the near future.
- The moratorium on payments to creditors and lenders remains in place. However, the Manager will correspond with them in the near future with details of how these would be dealt with.
- Ongoing efforts to collateralize existing loans and recover funds that were obtained irregularly or are non-performing will be stepped up. Existing borrowers are required to continue servicing their facilities.
- CBK and KCB will ensure that Chase Bank Ltd (In Receivership) will have adequate liquidity for its operations.
- KCB will make available a management team that will assist in the receivership.