Central Bank of Kenya (CBK) invites investors to take an equity interest in Chase Bank (Kenya) Limited

The Central Bank of Kenya (CBK) together with the Kenya Deposit Insurance Corporation (KDIC) is inviting investors to present an initial Expression of Interest (EOI) to take an equity interest in Chase Bank (Kenya) Limited which is currently in receivership. CBK has appointed KPMG as its Advisors in this process.

CBK and KDIC, the appointed Receiver, are executing their mandates in this matter in accordance with the Laws of Kenya. The Kenya Deposit Insurance Corporation (formerly Deposit Protection Fund Board) provides a safety-net for the savings, banking and payments system in the Republic of Kenya.

Chase Bank (Kenya) Limited was a rapidly developing commercial bank, operating through 62 branches. CBK placed Chase Bank (Kenya) Limited in receivership on April 7, 2016. The following circumstances led to Chase Bank (Kenya) Limited being placed in receivership:

  1. The existence of unsafe/unsound conditions to transact business that threatened the interest of Chase Bank, its depositors, and creditors (Section 43(2)(e) of the Kenya Deposit Insurance (KDI) Act);
  2. Chase Bank’s likelihood of failure to meet its financial obligations (Section 43(2)(g) of the KDI Act);
  3. Violation of certain provisions of the law and/or regulations (Section 43(2)(g) of the KDI Act); and
  4. The existence of substantially insufficient capital in Chase Bank (Section 43(2)(h) of the KDI Act).

The Bank was re-opened on April 27, 2016, albeit with reduced activities, with KCB Bank Kenya Limited appointed as Manager of the Bank. The Bank has continued to operate and has grown its deposits from the date of receivership.

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Notwithstanding the circumstances listed above, the CBK and KDIC have concluded that such activities were not an endemic part of the Bank’s business and that the Bank’s core activities are of merit as a service in Kenya. With improved management, governance and oversight Chase Bank (Kenya) Limited could represent a long term viable banking business.

Consequently CBK/KDIC is initiating a formal process and issuing this invitation for Expressions of Interest (“EOI”) in taking an equity interest in the Bank. Shareholders, as well as funding creditors have been informed of this process, and depositors will be informed shortly. This announcement commences a formal process of selecting a preferred investor for the Bank, which it is hoped may be concluded within the next six months.

Following the receipt of EOIs, CBK will evaluate and shortlist qualifying investors (“Shortlisted Investors”) who will be invited to pursue a more detailed engagement and also be granted access to a comprehensive confidential “Data Room” of financial, legal and business performance information to develop a formal offer to take an equity interest in Chase Bank (Kenya) Limited. A deal closure date of no later than September 30, 2017 is targeted. It is expected that Shortlisted Investors will be contacted on or before Wednesday, May, 3, 2017.

The Central Bank of Kenya (CBK) says that the Shortlisted Investors will be determined in a fair process using appropriate and objective criteria based on, inter alia, regulatory imperatives and prudential guidelines which will ensure a speedy and optimal recovery for depositors, creditors and other stakeholders of Chase Bank (Kenya) Limited, whilst also mindful of seeking to preserve and develop a sound and innovative banking system in Kenya.

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Potential strategic investors interested in taking an equity interest in Chase Bank (Kenya) Limited are hereby invited to provide an EOI, not later than 5.00 p.m. (East Africa Time) on Friday, April 21, 2017. Interested investors are referred to the EOI which can be located at www.chasebankkenya.co.ke, www.depositinsurance.go.ke, or at www.centralbank.go.ke.

Mr. Felix
A Math Nerd and a Computer Geek. Currently a Windows 10 Insider. Interested in AI, big data and AR/VR. Takes a keen interest in developments in the tech, business and social media spheres.

Mr. Felix

A Math Nerd and a Computer Geek. Currently a Windows 10 Insider. Interested in AI, big data and AR/VR. Takes a keen interest in developments in the tech, business and social media spheres.

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