SBM Holdings Ltd has completed the last step of the acquisition of carved out assets and assumption of specific liabilities of Chase Bank Kenya Ltd (in receivership) (CBLR) through its subsidiary SBM Bank (Kenya) Ltd (SBM Kenya).
The transaction follows the Central Bank of Kenya’s (CBK) approval through Gazette Notice No. 6833 published on 6th July 2018.
The handover to SBM Holdings Ltd was conducted at a ceremony at the Riverside branch presided over by Central Bank of Kenya Governor Dr. Patrick Njoroge and Kenya Deposit Insurance CEO Mohamud A. Mohamud.
At hand to receive the symbolic key were Kee Chong Li Kwong Wing – Chairman of SBM Holdings Ltd, Moses Harding John – Chief Executive Officer India and East Africa and Jotham Mutoka, acting CEO of SBM Bank Kenya.
This successful transaction of SBM Group delivers a first of its kind landmark deal that will stand as a reference for future resolutions in Kenya. The SBM Group has committed an additional capital infusion of $60 million for this portfolio purchase, taking its total investment to $86 million in Kenya. SBM Kenya moves up the ladder from a tier 3 bank to a top tier 2 bank with a significant asset base.
The completion of this transaction comes as a great relief for depositors and borrowers with the bank offering a full range of banking products and services from Monday 20th August 2018. Depositors will have access to 50% of the funds transferred to SBM Bank (Kenya) Ltd through Savings and Current Accounts. The remaining 50% of the transferred moratorium deposits will be available equally over the next 3 years and will earn interest during this period.
Customers will also have the option of moving available funds to either savings accounts or fixed deposits as per their choice. SBM Bank (Kenya) Ltd will offer attractive negotiated deposit rates for clients wishing to hold their funds in fixed deposits. The existing relationship touchpoints in the bank will be retained and will continue to be a strong relationship bank.
The group chairman presided over the opening of the newly rebranded SBM Bank (Kenya) Ltd, with the new brand identity of SBM, which will be rolled out in a phased manner across countries.
“It is a moment of great pride for us as a Group to have completed this landmark transaction slightly more than a year after we first entered the Kenyan market with the acquisition of the Fidelity Commercial Bank and it confirms our will to engage more in the Kenyan’s economy and society”, said the Group Chairman of SBM Holdings Ltd, Mr. Kee Chong LI KWONG WING, GOSK.
Dr. Njoroge described the transition as a sign of financial stability and thanked the staff of the bank for holding fort throughout the turbulent times since the initial closure of Chase Bank (IR) in 2016.
“The objective here was to maximize the returns for the depositors, creditors and other stakeholders. That to me is another first. The resolution of Chase is a major vote of confidence in the financial sector so what happens now is there is a huge stability that is a shot in the arm for the financial sector,” said Dr. Njoroge.
This transaction marks a significant step for the SBM Group, both in its international expansion strategy and its stabilization and integration process on the Kenyan market. It also highlights SBM Group’s contribution to the Kenyan financial sector and in particular, restoring confidence in a sector that thrives on stability.
The transaction will have a positive impact on the Kenyan financial sector. Customers will have access to new and innovative banking services offered by SBM Bank (Kenya) Ltd and on a broader basis will benefit from cross-selling opportunities provided by the different clusters of SBM Group.
Borrowers will have access to full banking operations on their accounts with SBM Bank (Kenya) Ltd. The normal operations on the transferred loan accounts will resume and will be informed accordingly. Borrowers will also have access to a full bouquet of credit facilities, trade finance lines, and non-credit services. SBM Bank (Kenya) Ltd will also offer a revamped customer service at the branches with added products on Retail, SME and Corporate segments.