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The Rebirth of Chase Bank Kenya

BY David Indeje · April 27, 2016 08:04 am

The Oxford Business Group (OBG) says with more banks per head than other major African markets, Kenya is a world leader in mobile money technology.

“Key to success in Kenya is the ability to create and grow products – and institutions – that respond to the needs of Kenyans for convenience and efficiency through alternative banking channels such as mobile, internet and agency banking,” according to OBG’s Growth opportunities for Kenya’s banking sector.

Kenya has 42 banks and analysts say ‘Kenya is overbanked’ serving 44 million people compared to Nigeria’s 22 for 100 million and South Africa’s 19 for 95 million.

Cytonn Investments in their 2015 banking report defined the baking industry as ‘A sector in volatile transition’.

Currently, it is being described as a sector that is facing its ‘worst crisis of confidence’ with three institutions being placed in receivership since last June – Dubai Bank and Imperial Bank – due to liquidity, and claims of managerial mismanagement.

The biggest development in the Kenyan banking sector was the placing of Chase Bank Kenya under receivership on April 7 after a run on deposits after it was revealed that some directors had issued larger unsecured loans to themselves than the bank’s working capital. The problem was further, escalated with the Bank’s chairman and group managing director resigned shortly after announcing restated earnings with a qualified audit opinion.

The central bank of Kenya blamed social media for the bank run.

“Chase Bank Limited experienced liquidity difficulties, following inaccurate social media reports and the stepping aside of two of its directors. Consequently, it was not able to meet its financial obligations on April 6, 2016,” Central Bank of Kenya had said in a statement.

Central bank Governor Dr. Patrick Njoroge, last week announced that The Kenya Commercial Bank (KCB) will take over the management of Chase Bank.

In selecting KCB, Central Bank Governor Dr. Patrick Njoroge, “In selecting the suitable bidder of Chase Bank, we looked at Speed, Liquidity, credibility & strong Management.”

“KCB’s credentials as a strong bank with a solid brand, adequate human resources and wide experience in the country, will facilitate safeguarding the interests of CBL’s depositors and creditors and the wider public interest.”

He added that, “We believe that with KCB Group Management, we have the best plan towards stability in the Banking Sector. KCB will undertake a detailed due diligence review of CBL. This will inform decisions relating to KCB’ interest in a majority stake.”

According to Dr. Patrick Njoroge, Chase Banks has 27,000, SME customers, 431 Non-Governmental Organizations, 147,000 saccos as its depositors, and customers.

As KCB opens the bank’s branches Wednesday April 27th its depositors will have access to their deposits of up to Kshs 1 Million.

However, “Deposits in excess of KSh1 million will be made available in a structured manner, details of which will be released in the near future.”

In selecting KCB, Central Bank Governor Dr. Patrick Njoroge, “In selecting the suitable bidder of Chase Bank, we looked at Speed, Liquidity, credibility & strong Management.”

“KCB’s credentials as a strong bank with a solid brand, adequate human resources and wide experience in the country, will facilitate safeguarding the interests of CBL’s depositors and creditors and the wider public interest.”

He added that, “We believe that with KCB Group Management, we have the best plan towards stability in the Banking Sector. KCB will undertake a detailed due diligence review of CBL. This will inform decisions relating to KCB’ interest in a majority stake.”

“KDIC remains as the receiver manager for Chase bank, KCB will be the managers.”

On Sunday, the Central Bank governor took his enthusiasm online by tweeting, “The Chase at Chase Bank Kenya is definitely on! Chase is back, stronger, and here to stay!!.”

Monday, the bank assured its customers that it is ready to serve,  “We are here to stay – and pretty much optimistic in enabling our clients achieve what matter most to them.”

KCB’s CEO Joshua Oigara on Monday during a tweet chat online session, said, “Our role is to build confidence in Chase Bank Kenya and encourage depositors to stick with Chase.”

Indeed, with the bank’s twenty years of existence, it continues to be a darling and a favorite to great initiatives in order to reach its vision of being the Pan African Relationship Bank, it has set its mission as enabling people achieve the things that matter to them most. Chase Bank has invested a lot of time and money into creating a great technological experience for its customers.

David Indeje is a writer and editor, with interests on how technology is changing journalism, government, Health, and Gender Development stories are his passion. Follow on Twitter @David_Indeje David can be reached on: (020) 528 0222 / Email: info@sokodirectory.com

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