Chase Bank Kicks Off Diligence Process in its New Phase

Chase Bank has recorded improved inflows in excess of Sh.10 Billion since April and has been able to sign up 3,200 new customers since its re-opening.

Since it reopened, Chase Bank has been able to among other things allow small depositors to access up to Sh.1 million, activating automated teller services, real-time gross settlement, limited lending for trade finance services up to Sh.5 million, VISA services and the restoration of correspondent banking by Deustsche Bank.

KCB Kenya Limited has today announced that it has entered a crucial phase that is going to determine the future ownership and funding of Chase Bank Limited that is currently in receivership.

“The new phase of Chase Bank’s recovery journey will focus on having a framework that will allow the bank to deal with maturing deposits, taking in new deposits, opening up new lending and conducting a due diligence on Chase Bank,” said Joshua Oigara, the CEO and MD of KCB Group Kenya.

Oigara further disclosed that KCB Bank, who were appointed to be the receiver managers for Chase Bank by the Kenya Deposit Insurance Corporation (KDIC) said that CBK has appointed an independent international firm that will conduct the due diligence and valuation of Chase Bank.

“We have received tremendous support from customers, depositors and other stakeholders to give Chase the firm standing that it is now grounded on which we believe will usher it out of receivership,” added the Mr. Oigara.

Read: Chase Bank Resumes Card Payments

The CEO and MD noted that the Chase story is not only being closely monitored by Kenyan banks but also by the banking community across the world thus its successful survival is an endorsement of the Kenyan Banking sector’s ability to effectively deploy globally benchmarked solutions to solve local market challenges.

According to Mr. Oigara, KCB Group still remains to be an interested party in Chase and that a conclusive decision will be made after the due diligence is completed. He reiterated that they are intending to close that in the shortest time possible so as to be able to relieve pressure from customers.

“We are now keen on looking deeper into the business to determine the next step of action in as far as bringing Chase Bank in full operations is concerned, this will help settle the question of how the balance sheet of Chase Bank will be funded going into the future, and who will be the owner.” said Oigara.  

KCB alongside Chase Bank has now tabled two legal frameworks to KDIC and CBK aimed at bringing more legal and regulatory clarity to allow the roll-over of matured fixed deposits. It will also provide an option for fixing call deposits to a longer tenure and provide a basis for offering interest rates.

To reopen, Chase Bank received Sh.3.5 billion in April in liquidity line from Central Bank. KCB said that the Bank has not sought additional liquidity support from CBK and remains self-funding, a strong indicator of the potential to get back into full-flight banking.