Kenya Post Office Savings Bank (Postbank) has put on sale its multibillion-shilling developed property in Muthaiga as it seeks to shore up its cash position ahead of planned transformation into a commercial lender.
The State-owned savings bank, which is keen on venturing into issuance of loans subject to fresh capital investment and approval from the Central Bank of Kenya (CBK), has issued a notice inviting prospective buyers to bid for the Postbank Training Centre.
The property comprises buildings, a water reservoir, a swimming pool and other developments, sitting on 15.45 acres along Coffee Garden Road, off Kiambu Road in Muthaiga North.
The loss-making Postbank may earn about Sh2.15 billion from the sale of land alone without the developments on it, going by the average market value of Sh139.3 million per acre in Muthaiga, taking into account property surveys regularly released by HassConsult.
“The parcel of land is being offered for sale on “as is, where is” basis and the bank makes no representation and gives no warranty whatsoever to the adequacy of services, soil conditions, land use, absence or presence of environmental contamination, or state of the development of the subject land for any intended use of the purchaser,” the bank said in the notice.
Unlike other banks that are regulated by the CBK, the 104-branch Postbank is governed by the Kenya Post Office Savings Bank Act. Interest earned by its depositors is exempted from 15 per cent income tax.
The bank has since 2013 made clear its plan to operate a new commercial banking subsidiary or launch a deposit-taking microfinance institution. This will require approval from the CBK after fulfilment of stringent requirements, including fresh capital injection.
An institution must maintain at least Sh1 billion core capital to operate as a commercial bank and between Sh20 million and Sh60 million as a microfinancier depending on the scale of its operations.
CBK rules do not also allow a commercial lender to hold more than 20 per cent of its capital in real property.