Mauritian bank acquires Kenya's cash trapped Chase Bank

Mauritian lender SBM Holdings will acquire Kenya’s cash trapped Chase Bank.

This is after it received the green light from Central Bank of Kenya (CBK) to take over troubled bank.

Chase Bank owners had sought CBK assurances of fairness in sale.

“The offer still needs to be executed and operationalised, and it is expected that this transaction will inter alia ensure the transfer of 75 per cent of the value of deposits currently under moratorium and the transfer of staff and branches of the existing Chase Bank operations,” said CBK in a statement Friday.

As part of the deal, SBM will acquire the lender's carved out assets and liabilities.

The deal will also see the Mauritius-based lender absorb Chase Bank’s staff estimated at 1,300 and about 62 branches.

Chase Bank was placed under receivership in April 2016 after it encountered liquidity problems, occasioned by mismanagement by its top officials.

Central bank said it will jointly with the deposit insurer, the Kenya Deposit Insurance Corporation (KDIC), meet Chase depositors next week on Wednesday and Thursday over the takeover.

“CBK and KDIC reiterate their commitment in keeping with their respective mandate and in accordance with the laws of Kenya, to protect the interest of depositors, creditors and the wider public interest,” said CBK.

The Central Bank green light comes even as two other foreign banks are in the High Court seeking to stop Mauritius SBM Holdings from acquiring Chase Bank over a Sh1.1 billion debt.

United Bank Limited (UBL) of Dubai and its London-registered subsidiary United National Bank Limited (UNBL) claim that Chase Bank owes them the money in favour of two separate letters of credit they issued on its behalf in 2015 and 2016, a few months before it was placed under receivership.

SBM is Mauritius' second largest bank and acquired full ownership of bottom-tier lender Fidelity Bank in 2016, and rebranded it to SBM Kenya earning itself, through the deal, a presence in Kenya and the region.

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