NAIROBI, Kenya, Jan 5 – The Central Bank of Kenya (CBK) has approved the acquisition of Chase Bank Kenya by Mauritius-based bank SBM Holdings Ltd (SBM).
The move will see SBM Holdings acquire certain assets and matched liabilities that include the transfer of 75 per cent of the value of deposits currently under moratorium and the transfer of all staff and branches of the existing Chase Bank Kenya operations.
Non-moratorium depositors will continue to have full unrestricted access to their funds.
“Though this 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,” CBK says.
The Central Bank of Kenya plans to meet Chase Bank Kenya depositors on Wednesday and Thursday next week.
The holding company acquired Fidelity Bank a tier three bank in May 2017 through a subsidiary, SBM Bank Kenya and plans to merge it with the newly acquired Chase Bank.
“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,” the group’s Chairman K.C Li Kwong Wing had announced in October last year.
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.
Chase Bank which has been in receivership following its collapse has a network of 62 branches across the country with total assets over $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 $700 million as at 31 July 2017 and total assets of over $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 on 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.