Chase Bank depositors cautiously optimistic despite rosy relationship

April 21, 2016
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NAIROBI, Kenya, Apr 21 – The news of Chase Bank Kenya reopening was received with joy and relief by both depositors and the market.

CBK announced on Wednesday that the lender will reopen next week under the management of Kenya Commercial Bank (KCB) with plans to acquire the bank in the near future.

Some of the customers who spoke Capital FM Business expressed mixed reactions on whether to bank with the lender again when they reopen on Wednesday next week.

Alpheta Wawira, a customer with the bank, says the banks offered the best customer care services she has ever experienced.

“I have been banking with Chase bank for the last one year. I have never experienced any bad customer relationship,” Wawira said.

The Salon Manager in Nairobi, however, says she was really inconvenienced when the bank went under.

“Banking with them again will be tricky,” she explained when asked whether she will remain in the bank once it reopens.

However, John Seno, co-founder and Director OTB Africa has a different opinion. He seems to have a deeper relationship with the bank.

“I have been with the bank since August last year. I opened two business accounts and one personal account. The customer service was amazing and it’s not just that the women are pretty which everyone emphasizes, they actually attend to you with a smile and are very responsive,” Seno explains the relationship, adding that : “Once, the branch manager even helped me process a transaction and they actually remembered my name.”

He says if Chase Bank came back as a subsidiary of KCB with better corporate governance structures he would still bank with them.

“I’m one of the 3 percent of depositors with more than Sh1 million so I have significant exposure. The thing is not everyone at Chase Bank was or is a crook or did something wrong or illegal, many of them were caught up in this mess just like the depositors,” he said.

He says the culture and the services are the best he has experienced from a banking perspective.

“I have been in a relationship with Chase Bank Kenya for over one year. I would say Chase is the best banker I could ever ask for, very timely responses and the mobile app was the best. They really cared. They even called some time back to check how I was doing,” said Martin Macharia, Associate Consultant at an investor relations firm in Nairobi.

Macharia said it was unfortunate that such a good bank would go under receivership.

“However, I think it was in our best interest. I look forward to the reopening. After I establish everything is safe and I am catered for I will definitely bank with them because Chase Bank is just different and their customer service is top notch,” Macharia told Capital FM Business.

On his part, Senior Vice President, Financial Risk at Riyad Bank, Mohamed Wehliye says the Central Bank of Kenya’s  (CBK) move shows that the regulator can act with speed to resolve issues and a bank going under receivership does not necessarily mean death to the institution.

“Of course, this depends on the circumstances but CBK’s quick turnaround should be lauded. Finally, it looks like a strong domestic institution will be taking over Chase bank and that creates confidence in the market,” he stated.

Another depositor, Jane Mukami, says she will not rush to withdraw her funds when the bank reopens under KCB.

“But I will not make deposits as yet until the situation stabilizes. At least we are seeing efforts to salvage the bank, and the fact that a big bank like KCB has taken over is good news for depositors,” adds Mukami.

The regulator endorsed an agreement with KCB yesterday morning at 8.30am that essentially agreed Chase Bank’s management and operations will be taken over by KCB and open for business on Wednesday next week.

This is the first time a bank in receivership has been reopened. Chase Bank went into receivership two weeks ago after panic withdrawals following alleged mismanagement reports emerged in the public domain.

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CBK said Chase Bank has an interesting DNA focusing on women, youth, SME and small investment groups. It has 170,000 customers spread across 62 branches depositing Sh73.9B with over a half of its clientele being corporate (53 percent).

About 167, 000 (97 percent) accounts hold lower than Sh1 million and their full deposits will be available once the lender reopens.

The lender has about 27, 000 SME customers and about 431 Nongovernmental organisations hold accounts with the lender.

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