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November 20, 2018

SBM Holdings finalises purchase of 75% of Chase bank assets

Closed Chase Bank Ltd Wabera Street branch in Nairobi on April 7, 2016./FILE
Closed Chase Bank Ltd Wabera Street branch in Nairobi on April 7, 2016./FILE

SBM Holdings has finalized the acquisition of 75 per cent of certain assets and deposits with regards to Chase Bank which is under receivership.

SBM Bank Kenya acquired the value of deposits, a majority of staff and branches of the existing CBLR operations.

Twenty-five per cent of the value of moratorium deposits will remain in CBLR.

For the 75 per cent of moratorium, deposits to be transferred to SBM, 25 per cent of each transferred deposit is to be held in a current account with SBM Kenya, with unrestricted usage and without interest being payable thereon.

A further 25 percent of each transferred deposit will be held in a savings account with SBM Kenya at an interest rate of 6.65 percent per annum, with unrestricted usage.

The remainder of each transferred deposit will be held on fixed term deposit with SBM Kenya at an interest rate of 6.65 per cent per annum.

"Such deposits (together with the interest thereon) to mature, as to one-third of such remainder, on the first, second and third anniversaries of the transfer respectively," CBK Patrick Njoroge said.

Central Bank of Kenya and Kenya Deposit Insurance Corporation announced the signing of the agreement between on Tuesday.

This concludes the discussions between SBM, KDIC and CBK on the CBLR transaction that was announced on January 5, 2018.

The customary conditions that apply to current and savings accounts, and term deposits, respectively, will apply to these deposits.

The date these deposits will be available, and the details under which the customer accounts will be managed, will be announced shortly.

Through this acquisition, and combined with its other operations in Kenya, SBM will bring its experience and expertise from Mauritius and other markets, to further enhance the competitiveness and resilience of Kenya’s banking sector.

On January 13, about 35, 235 Chase Bank deposit accounts opened during the period it has been under receivership was transferred to SBM Bank accounts.

Njoroge said the depositors of such accounts will work with SBM when their accounts are moved over.

More on this: Chase Bank depositors to shift to SBM Bank in a few weeks

The central bank of Kenya had accepted a binding offer from the SBM holdings that will cover a portion of assets and liabilities of Chase bank, which has been in receivership since April 6, 2017.

The bank which boasts of assets in excess of $4 billion (Sh412 billion) entered Kenya by taking over Fidelity bank in May last year.

 

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