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Chase Bank customers to access 75 percent of deposits

About Sh76 Billion in deposits have been held by the bank which has been under the management of the Kenya Deposit Insurance Corporation – a Government entity that protects the deposits of customers/FILE

NAIROBI, Kenya, Jan 12 – Chase Bank Kenya depositors will in the next few weeks have access to 75 percent of their deposits that have been held by the bank after it was placed under receivership in April 2016. 

Central Bank of Kenya (CBK) Governor Patrick Njoroge says the 75 percent will be given in three tranches.

Depositors will get 18.7 percent in a current account once the Mauritius-based bank SBM Holdings Ltd (SBM) finalizes its acquisition of Chase Bank.

Another 18.7 percent of customers deposits will be put in a savings account earning 7 percent interest.

The rest of the deposits – 37.5 percent – will be available in a fixed deposit which will mature over the next three years earning 7 percent.

“I cannot tell you the exact time SBM will open, but I can be certain it will be in the next few weeks,” Njoroge told Journalists in a news conference about the new deal.

CBK has approved the acquisition of Chase Bank Kenya by SBM a move that has seen 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.

“This was the best deal set for the bank. I want to assure Chase Bank depositors that 25 percent of the deposits under moratorium will not be lost but will remain under Moratorium,” she added.

About Sh76 Billion in deposits have been held by the bank which has been under the management of the Kenya Deposit Insurance Corporation – a Government entity that protects the deposits of customers.

The regulator met with the depositors on Wednesday and Thursday who have agreed to the deal.

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Chase Bank was placed under receivership in April 2016 following revelations of financial mismanagement that led to a bank run.

The 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 according to a 2014 annual report.

So far, Njoroge says there are about 35,235 new accounts that have been opened at Chase Bank since it was put under receivership with deposits totaling Sh6 billion.

SBM Holdings won the bid against 12 shortlisted financial contenders for the acquisition including Kenya’s tier one banks who see Chase Bank as a salvageable and lucrative financial institution catering for the SME market.

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 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.

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