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Job losses loom in Chase Bank takeover

A chase bank branch in Nairobi. FILE PHOTO | NMG
A chase bank branch in Nairobi. FILE PHOTO | NMG 

SBM Holdings of Mauritius’ looming takeover of Chase Bank is coming with possible loss of scores of jobs, according to a Central Bank of Kenya (CBK) statement issued Monday.

The proposed transaction will lead to “a transfer of a substantial number of staff and branches” of the existing Chase Bank operation, the CBK said in the statement, signalling that those not transferred will lose their jobs.

SBMH said in a separate announcement that the portion of Chase Bank it will acquire will be merged with its existing operation SBM Bank (Kenya), which previously traded as Fidelity Commercial Bank.

“SBMH, through its subsidiary, SBM Bank (Kenya) Limited, will acquire the carved out assets and liabilities of Chase Bank (Kenya) Limited (In Receivership),” reads the statement from the Port Louis-based lender.

Chase Bank’s total staff count stood at about 1,300, according to a prospectus issued for a corporate bond that raised Sh4.8 billion just before it went into receivership in April last year.

The bank said it had 990 employees on permanent contracts and another 369 on temporary employment.

Chase Bank reopened its doors to customers barely two weeks after its collapse, retaining most of its workforce that is now being considered for transfers or dismissal.

The CBK had not responded to queries on the matter by the time of going to press, but its statement did not indicate what would happen to Chase Bank staff not absorbed by SBMH.

The Mauritian bank is expected to focus on elimination of overlaps between its existing branch network and that of Chase Bank in the integration plan.

SBM Kenya has 10 branches – six in Nairobi and four in Mombasa while Chase Bank has 62 branches in 13 towns -- most of them in Nairobi and Mombasa.

The CBK did not indicate whether there are any other potential bidders for Chase Bank, but was clear in its backing of the proposed deal as a means of resolving the crisis caused by last year’s sudden collapse of the lender.

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