Kenya's Chase Bank takeover begins
Saturday July 07 2018
A Chase Bank branch in Nairobi. The lender's is Mauritius SBM's second acquisition in Kenya after Fidelity Bank. PHOTO | NMG
The Central Bank of Kenya has announced that Mauritian lender SBM Holdings has began acquiring Chase Bank (Kenya) through its Kenyan subsidiary SBM Kenya.
"This follows CBK’s approval on June 13, 2018, for SBM Kenya to acquire certain assets and liabilities of Chase Bank as provided under Section 9 of the Banking Act and under the Central Bank Prudential Guidelines. Subsequently, approval was granted by the Cabinet Secretary, National Treasury on June 28, 2018," CBK said in a statement.
The acquisition and assumption process will be completed on August 17, giving SBM Kenya 75 per cent ownership and the transfer of staff and branches of the existing Chase Bank operations.
“SBM’s binding offer represents a viable proposal for the substantial resolution of Chase Bank, for the benefit of depositors and the strengthening of the Kenyan financial sector,” CBK said in a statement, after it accepted it accepted SBM Holding’s offer early this year.
Receivership
Chase Bank was placed under receivership when it failed to meet its financial obligations. The Kenya Deposit Insurance Corporation was appointed as the receiver manager.
SBM Holdings Ltd is the third largest listed company on the Stock Exchange of Mauritius and had an asset base of over $.5.6 billion as at December 2017.
It has operations in India, Madagascar and Kenya. It owns the second largest commercial bank in Mauritius (SBM Bank Holdings Ltd).
With this transaction, SBM Kenya’s market share has increased from 0.23 per cent to about 2.4 per cent, and it has moved from being a small to a medium-sized bank. The deal is SBM’s second acquisition in the country after Fidelity Bank.