Central Bank has accepted a Mauritius lender's binding offer for the acquisition of assets and liabilities from Chase Bank.
The lender was placed under receivership in April 2016 after experiencing "liquidity difficulties" and being
unable to meet financial obligations.
Group MD Duncan Kabui and chairman Zafrullah Khan later resigned amid growing public concerns over the health of the bank.
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CBK governor
Patrick Njoroge announced they had accepted the offer by SBM Holdings
in a statement on Friday.
"The binding offer is accepted but still needs to be executed and operationalised," he said, noting the decision was made on Thursday.
Njoroge said the
transaction will ensure transfer of 75 per cent of the value of deposits currently under moratorium.
"It
will also ensure the transfer of staff and branches of the existing CBLR operations.
Non moratorium depositors will continue to have full unrestricted access to their funds," he said.
Njoroge further noted SBM's experience and expertise in Mauritius and other markets and that these will help improve Kenya's sector.
He termed the offer "a viable proposal for the substantial resolution of CBLR" for the sake of depositors and the financial sector.
The two organisations plan to meet depositors on January 10 and 11.
In November, Njoroge said the planned acquisition of Chase Bank by Mauritius Holdings would be completed by the end of December.
He said that despite delays brought about by the extended electioneering period, the transaction process was still in play and would be concluded at that time.
CBK and the Kenya Deposit Insurance Corporation received a non-binding offer from the Mauritius lender
last month. The two offers are similar, Njoroge noted.
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SBM Holdings, through its subsidiary, SBM Bank (Kenya) Limited, has 10 branches in the country, having acquired Fidelity Bank in May 2017. The lender was picked out of 12 suitors that expressed interest in the deal.
SBM is a leading financial services group and the second largest company listed on the Stock Exchange of Mauritius, with a growing international presence currently extending to Madagascar, India and Kenya.
It has a market capitalisation of approximately $600 million, with the Government of Mauritius as a significant shareholder, and total assets in excess of $4 billion. SBM provides all services of a universal bank within a diversified business model.