Mauritius-based SBM Holdings makes offer for troubled Kenyan bank

Mauritius’ SBM Holdings has given a non-binding offer for the acquisition of certain assets and liabilities belonging to Kenya’s Chase Bank

The Central Bank of Kenya(CBK) on Monday said it had received an offer from Mauritius’ SBM Holdings for the acquisition of certain assets and liabilities belonging to Chase Bank.

The Bank said it had received a non-binding offer from SBM setting stage for a due diligence process set for this week.

“Central Bank of Kenya and Kenya Deposit Insurance Corporation announces that they have received a non-binding offer from SBM Holdings Limited with respect to Chase Bank (Kenya) Limited (In Receivership) (CBLR),” the central bank said in a statement.

The non-binding offer is however subject to confirmatory due diligence and a binding contract. If agreed, it is expected that the proposed transaction will be concluded by the end of 2017.

In May, CBK said 12 parties - including local and foreign banks - had expressed interest in the bank. It is also in the same month when SBM Holdings said it was bidding to buy a stake in Chase Bank.

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.

SBM is a leading financial services group and the third largest company listed on the Stock Exchange of Mauritius, with a growing international presence currently extending to Madagascar, India, and Kenya.

The firm has a market capitalisation of approximately $700 million (Sh72.2 billion), with the Government of Mauritius as a significant shareholder, and total assets in excess of $5 billion (Sh516 billion).

Chase Bank was placed under receivership in April 2016 following a bank run after reports of its liquidity hurdles gained traction online.

KCB later took over management of the bank with a plan to fine-tune the modalities of an acquisition.

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