CBK invites bids for Chase Bank

Customers are served at Chase Bank. Central Bank of Kenya has advertised the Expression of Interest (EOI) to take up equity in the bank. PHOTO | FILE 

By ALLAN OLINGO

In Summary

• CBK has extended Chase Bank's receivership by a further six months.
• In December, however, CBK Governor Patrick Njoroge reassured depositors that Chase Bank would be placed out of receivership by the end of March 2017.

Kenya’s Central Bank has advertised the Expression of Interest (EOI) to take up equity in Chase Bank (Kenya), barely an hour after extending its receivership by a further six months.

CBK said that the move effectively starts a formal process of selecting the preferred investor for the Bank. Central Bank hopes the process will concluded within the next six months.

“Following the receipt and evaluation of EOIs, a shortlist of qualifying investors will be granted access to a comprehensive confidential data room to develop a formal proposal to acquire Chase Bank (Kenya) Ltd. 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) Ltd whilst also mindful of seeking to preserve and develop a sound and innovative banking system in Kenya,” CBK said in a statement.

The move, however, will be seen as backtracking from CBK Governor Patrick Njoroge's sentiments in December, when he met with depositors at the Crowne Plaza in Nairobi and reassured them that Chase Bank would be placed out of receivership by the end of March 2017.

In a previous interview, Dr Njoroge was optimistic that the sale process will sail through smoothly. He said that phase three of the receivership had begun, and that the lender's books are looking good with more than 13,000 new accounts having been opened since the receivership was lifted. He also said that only a tenth of the money expected was withdrawn when the bank reopened in May last year.

“We are looking for serious investors who have the right resources and plan to support the bank and make it thrive. We want Chase Bank to be a perfect case study on how to turn around a lender in distress from receivership back to profitability,” Dr Njoroge said then.