The lending of Sh4.7 billion by SBM Bank Kenya to its parent firm in Mauritius sends the wrong signal about the way the institution is dealing with the question of resolving outstanding payments to depositors.
It is to be expected that the bank, which took over the collapsed Chase Bank, will continue to do business that drives it towards stability and liquidity. However, it is still worth bearing in mind that those adversely affected by the collapse of Chase Bank in 2016 are yet to be fully paid. That means SBM Bank Kenya needs to re-examine its priorities and be mindful of the welfare of depositors.
The institution is giving the impression that it is more interested in making money from the cash it holds instead of dealing with the problem that brought down Chase Bank. One would have expected that the priority would be to pay the depositors, whose money is still held by the bank, instead of lending the money to its parent company so soon after making its first nine-month profit.
The bank made Sh1.8 billion in net profit in the third quarter that ended September 30 last year. Before that, it had made a streak of losses after entering the Kenyan market through the buyout of Fidelity Bank in May 2017.
That is quite a good start and points to high chances that good management will see the bank stabilise with time. However, the tens of thousands of depositors who have had to go for nearly three years without fully accessing their money are still waiting.
Of these, over 3,000 large depositors still have well over Sh10 billion locked in the lender and anticipate that they will be paid the money over a period of three years. This process can be quickened if the bank were to prioritise the payments.
After Chase Bank collapsed, it came to light that a major shareholder had taken out about Sh8 billion without proper collateral. Recovering this money should be the other top priority for SBM Bank Kenya as well as the Central Bank because this money should form part of what will be used to refund long-suffering depositors. SBM Bank Kenya ought to always be alive to the fact that the collapse of Chase Bank led to the suffering of thousands of families and small and medium enterprises.
Youth, women and SMEs were major customers of the institution before it fell and these groups are also some of the drivers of economic growth in the country. They need to see that the bank is taking tangible measures to ensure they get their money back.
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