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CBK makes large Chase Bank depositors wait as cash injection stalls

Large depositors at Chase Bank will have to wait a little bit longer to access their money after the Central Bank of Kenya (CBK) pushed the bank’s full reopening to the next quarter. The Standard has learned that negotiations are still ongoing on plans to inject new capital from a strategic investor even as CBK’s quarter-one timeline expires. Last year, CBK Governor Patrick Njoroge said the bank would open its doors within the first quarter in a move that would have seen Kenya Commercial Bank (KCB) exit as receiver managers. KCB Chief Executive Joshua Oigara said the regulator would make a decision in a matter of weeks after an assessment at the end of the month. “As you are aware, last year we carried out a successful assignment on Chase Bank and it is awaiting CBK’s resolution on March 31 this year,” he said recently during the bank’s investor briefing. Several co-operatives, fund managers, chamas (investor groups) and other lenders have had their money locked up in the troubled bank for almost a year now since the bank was put under receivership in April last year. The receiver managers set a Sh1 million withdrawal limit while some services such as electronic funds transfer, credit cards, loan applications, overdraft, forex trading, foreign currency accounts, issuance of letters of credit and guarantees remained frozen. At the time, Shelter Afrique had Sh424.4 million in the bank while the Law Society of Kenya, the United Nations Sacco and betting company SportPesa had at least Sh2 billion withheld by the bank. The bank became the third to be put under statutory management under Governor Njoroge after a run on its deposits raised fears it would be unable to repay customers. Imperial Bank, another mid-tier bank, was put under receivership in October 2015 over fraud. Two months earlier, smaller lender Dubai Bank was also put under receivership. Unlike the two, CBK managed to reopen Chase Bank the same month after KCB Group was appointed to manage it. The KCB Group said it was still interested in becoming Chase Bank’s shareholder, which it has been managing so long as the process is above board. Governor Njoroge said there was also interest from other local and foreign banks, although no details have ever been provided. SBM Holdings of Mauritius, one of the said suitors, has since acquired Fidelity Bank. Efforts to reach the Central Bank on the update were not fruitful as the regulator only confirmed receipt of our queries.
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