By Otiato Guguyu The new owners of Chase Bank had to increase insurance for bad loans 22 times to accommodate a growing loan book after the lender’s acquisition deal.
The State Bank of Mauritius (SBM), which took up some of Chase’s assets and liabilities in August said in its financial results published yesterday that loan loss provisioning jumped from Sh53 million to Sh1.17 billion in the nine months to September this year.
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The Indian Ocean island banker, however, grew its net profit to Sh1.8 billion for the period under review, up from a loss of Sh330 million last year, mainly on other income that rose from Sh211 million to Sh3.8 billion.
“SBM acquired certain assets and assumed certain liabilities of Chase Bank through a carve-out transaction that was successfully completed on August 17, 2018,” said the bank’s chief executive, Moezz Mir. After taking up Chase Bank’s customers, SBM’s deposits increased from Sh6.4 billion to Sh53.6 billion. Separately, Family Bank, which felt the aftershock of Chase Bank’s collapse, posted a net profit of Sh187.7 million in the nine months to September, up from a loss of Sh743 million in a similar period last year.
Revamped app Acting Managing Director and Chief Financial Officer Charles Njuguna said this was largely driven by digital banking that has seen growth in credit uptake through the bank’s revamped PesaPap application.
He also cited continued improved operation efficiency that has resulted in cost containment for the bank. Stay informed while on the go by subscribing to the Standard Group SMS service. Text the word 'NEWS' to 22840. Staff costs significantly reduced by 19.3 per cent to Sh1.3 billion compared with Sh1.6 billion recorded in September last year. “The strategy continues to improve our bottom line,” said Mr Njuguna.
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