NAIROBI, Kenya, Oct 10 – SBM Holdings Ltd (SBM) has announced plans to consolidate Chase and Fidelity Banks if an offer by the Mauritius-based bank to acquire Chase Bank (under receivership) gets the green light by regulators.
SBM, while confirming that Central Bank of Kenya has accepted a non-binding offer to take over Chase Bank, has said the proposed transaction accelerates the bank’s plan to expand in East Africa.
The Holding company acquired Fidelity Bank a tier three bank in May 2017 through a subsidiary, SBM Bank Kenya and with the acquisition of Chase Bank, the group’s Chairman K.C Li Kwong Wing now says there is an opportunity to grow Fidelity Bank “inorganically.”
“The acquisition of certain assets and matched liabilities of the Chase bank confirms the realisation of SBMH Africa strategy. With this proposed transaction, SBMH aims at consolidating its presence in East Africa and at gearing up the operations of SBMK, with the ambition of becoming a tier 1 bank in Kenya in the medium to long-term.”
SBM Holdings won the bid against 12 shortlisted financial contenders for this acquisition including Kenya’s tier one banks who see Chase Bank as a salvageable and lucrative financial institution catering for the SME market.
It is expected that the proposed transaction will be concluded by the end of 2017.
The transaction will also ensure a substantial recovery for depositors currently under moratorium and a transfer of a substantial number of staff and branches of the existing Chase Bank operations.
Chase Bank which is still in receivership following its collapse has a network of 62 branches across the country with total Assets over USD 1 billion and employing around 800 staff based on its 2014 annual report.
SBM Group is one of the largest banking and financial services institutions listed on the Stock Exchange of Mauritius with a market capitalization of approximately USD 700 million as at 31 July 2017 and total assets of over USD 5 billion as at 30 June 2017.
It has a Moody’s Ratings of Baa3 and is ranked among the top 1,000 banks in the world by The Banker.
SBM Group is building its strategic focus of being a strong regional player mirroring the national strategy and building its strength to stimulate growth in Mauritius, India and East Africa.
The regulator had earlier planned to complete its acquisition by the end of March after eight potential buyers expressed interest including Kenya Commercial Bank.
Chase Bank was placed under receivership in April 2016 following revelations of financial mismanagement that led to a bank run.
KCB later took over management of the bank with a plan to fine-tune the modalities of an acquisition.