The Central Bank of Kenya. FILE PHOTO | NMG
Mauritian state bank SBM has to publish audited accounts of its
Kenyan operations and disclose financials of Fidelity Bank, which it
took over two years ago, so as to get the confidence of depositors and
the public.
Assets managers Fusion Capital say SBM
Kenya has not yet put out details of the financials of its local
operations due to issues relating to lack of auditing of Fidelity before
takeover.
The analysts said this raised the spectre
that the Central Bank of Kenya (CBK) might not have approved the
auditors of the bank.
“The CBK has, apparently, not
yet approved their Kenyan auditors, and prior to the takeover, the
previous management at Fidelity had not published accounts.
"We
have no reason to believe that this points to trading problems with
their Kenyan acquisition but it remains a reason for caution in
assessing their strength and prospects. SBM will have to publish this
information soon, in order to engage with Kenyan depositors,” said
Fusion Capital.
The report was released by Fusion Capital executive director for asset management Michael Kimondo.
Audited financials
It said the management must put the audited financials in mind even as they complete the Chase Bank transaction.
Chase
Bank, which collapsed two years ago, was also recently acquired by SBM
Holdings. SBM is seeking to use its Kenyan acquisitions as its entry
into the rest of Africa.
Fusion
Capital notes, however, that the buyout of Chase Bank was a shrewd one
as it represented low risk for the Mauritian entity.
“In
this latest offer, which is expected to be concluded by Q1 of 2018,
they have done a shrewd deal on Chase, effectively buying Chase, in a
very low-risk way for nothing, an indication of very smart management.”
Detailed analysis
Mr Kimondo said the asset management company had carried out a detailed analysis of the bank.
“We
believe this deal is good for depositors as it will guarantee access of
75 per cent of their deposits over a period of three years,” he added.
The
Fusion report says SBM injected Sh1.5 billion into Fidelity as the bank
was below statutory minimum capital requirements of Sh1 billion
required for a bank operating in Kenya.
“The entry into Kenya to them would operate as a gateway to the rest of Africa,” said the report.
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