People walk past a Chase Bank branch along Mama Ngina Street in Nairobi. FILE PHOTO | SALATON NJAU | NMG
Summary
- Kenya Deposit Insurance Corporation (KDIC) chief executive Mohamud Mohamud says his team will step up the recovery efforts in the what will remain of Chase Bank under receivership (CBLR) after the SBM deal.
- This will help depositors to gradually access more money through SBM as KDIC said that the decision by SBM to take only certain assets and liabilities did not amount to leaving out a shell portion ripe for immediate write-off.
Mauritian lender SBM Holdings will benefit from additional
deposits that are not currently part of the deal it struck with the
Central Bank of Kenya if the deposits insurer made further recoveries of
bad loans.
Kenya Deposit Insurance Corporation (KDIC)
chief executive Mohamud Mohamud says his team will step up the recovery
efforts in the what will remain of Chase Bank under receivership (CBLR)
after the SBM deal.
“The 25 per cent remains under KDIC
and CBLR. We will now concentrate on that and whatever we collect, we
will pass it over to SBM to add to the 75 per cent of the deposits it is
set to acquire. We believe this will be to the benefit of depositors,”
said Mr Mohamud.
This will help depositors to gradually
access more money through SBM as KDIC said that the decision by SBM to
take only certain assets and liabilities did not amount to leaving out a
shell portion ripe for immediate write-off.
“Whatever loans that have remained, we will pursue more
aggressively through new strategies of collection. We are not writing
off the 25 per cent.”
This is the first deal in Kenya
where majority of an under-receivership bank’s assets are being acquired
but still have the remaining portion of the institution under
receivership.
Data shared by National Treasury in April
during a pitch for setting up Kenya Mortgage Refinance Company showed
that out of the Sh7.5 billion worth of mortgage assets held by Chase
Bank, Sh4.5 billion was non-performing.
In
the current deal, SBM is set to receive 75 per cent of the value of
deposits under moratorium and 100 per cent of non-moratorium deposits
made up all customer account deposits not more than 100,000.
According
to the KDIC, the 30-day transition of the carved out assets and
liabilities from Chase Bank started on Tuesday and will see, among other
things, the transfer of IT systems to SBM.
Mr Mohamud ruled out possibility of downturn in systems due to change over.
“We
have insulated everything and the transaction is going to be seamless.
We don’t anticipate system downturns,” said Mr Mohamud.
No comments :
Post a Comment