Mauritius-based SBM Holdings Limited, one of the largest banking and financial services institutions, through its Kenyan subsidiary has finalized takeover of Kenyan bank, Chase bank Limited which has been in receivership. This comes months after it acquired yet another bank, Fidelity Bank in 2017.
This was confirmed after the Central Bank of Kenya and the Kenya Deposit Insurance Corporation (KDIC) signed off on the acquisition. The financial institution was able to win the bid against 12 other strong financial competitors, including several tier one banks in the country, which viewed Chase bank as a lucrative financial institution catering to the small and medium enterprise (SME) market.
The acquisition allows SBM Kenya to take over selected assets and liabilities such as the transfer of 75% of the value of deposits currently under moratorium (temporary prohibition) at Chase Bank (Kenya) Limited (In receivership). In addition, SBM Kenya will also acquire all 62 branches of the existing Chase Bank Kenya operations as well as all their existing staff.
With 75% of the value of deposits under moratorium going to SBM Kenya the rest of the 25% is to remain in Chase Bank (Kenya) Limited (In receivership). On the other hand, non-moratorium depositors will also be transferred and will continue to have fully unrestricted access to their funds.
For the 75% transferred to SBM Kenya, 25% of each one of the transferred deposits will be held in a current account with SBM Kenya, with unrestricted usage and without interest being payable. In addition, another 25% of each of transferred deposit will also be held in a savings account with SBM Kenya as well at an interest of 6.65% per annum with no restriction in terms of usage.
The remainder of each of the transferred deposits will moved to a fixed term deposit with SBM Kenya and will attract an interest rate of 6.65% per annum. According to the CBK, Such deposits (together with the interest thereon) will mature, as to one-third of such remainder, on the first, second and third anniversaries of the transfer respectively. This will be a welcome relief for the affected Chase Bank depositors who will soon be able to access their deposits.
Already having operations in the country thanks to the acquisition of Fidelity Bank, SBM Kenya aims at growing its presence in region by combining the two acquisitions to further enhance the competitiveness and resilience of Kenya’s banking sector.
