Several international banks, which have recently been showing interest in Kenya, are among those eyeing the stake in Chase Bank — hoping to use it as their route to the region.
The CBK is seeking to sell Chase as part of a restructuring plan meant to speed up its recovery.
To come up with the final shortlist, the CBK said it ensured candidates have the capacity to facilitate a speedy and optimal recovery for depositors, creditors and other stakeholders in Chase.
The scramble to take over a controlling stake in troubled Chase Bank has entered the homestretch after the Central Bank of Kenya said it had shortlisted some suitors out of the 12 that expressed interest in the deal.
The mix of interested buyers included three local banks, four foreign financial institutions and five other financial institutions and consortia, according to a CBK statement released on Tuesday night.
The Business Daily has since learned that several international banks, which have recently been showing interest in Kenya, were among those eyeing the stake in Chase Bank — hoping to use it as their route to the region.
The CBK is seeking to sell Chase as part of a restructuring plan meant to speed up its recovery.
“The evaluation of the EOIs has now been completed and a shortlist of qualifying investors has been identified,” the regulator said in the update to interested parties, including depositors whose money is still stuck with the bank.
Kenya’s biggest bank by assets, KCB #ticker:KCB, is among the local lenders that had initially expressed a strong desire for a piece of Chase. KCB has been managing the Chase having been contracted by the receiver managers, the Kenya Deposit Insurance Corporation (KDIC).
It was, however, not immediately possible to establish whether KCB Group is among the contenders who have made the final cut. KCB chief executive Joshua Oigara said last July that his bank had no exclusive right to buy Chase and “neither was it going to be the only buyer.”
The CBK said the shortlisted investors will be granted access to “comprehensive confidential data” that will allow them to develop a formal proposal for taking an equity interest in Chase.
The shortlisted investors must submit their formal proposals by June 9.
To come up with the final shortlist, the CBK said it ensured candidates have the capacity to facilitate a speedy and optimal recovery for depositors, creditors and other stakeholders in Chase.
The regulator expects to seal a deal with the successful bidder by the end of the first quarter of the next financial year, which begins in July.
Chase was placed under receivership in April last year following a run on the bank that was precipitated by reports that it was facing a serious liquidity problem and that its directors had stolen large sums of money through unsecured insider lending.
It is expected that the sale will reduce Chase’s principal shareholders, including former chairman Zafrulah Khan, into minority owners.
“The process and timing beyond June 26, 2017, will be informed by the structure proposed in the preferred investor proposal, but it is currently intended that any resultant transaction will be completed before September 30, 2017,” said the CBK in an earlier statement.
The selected investor will be expected to inject the capital required to raise bank’s equity to levels desired by the regulator.
New York-based lender JPMorgan Chase had earlier expressed interest in setting up a representative office in Nairobi, while Qatari National Bank (QNB) has been advertising its financial results in local dailies for the third year in a row — signalling their interest in the Kenyan market.
Kenya has 43 commercial banks.
The CBK early this month lifted the moratorium it had imposed on the licensing of new banks since November 2015 following the collapse of Imperial Bank and Dubai Bank under the weight of banking malpractices.
“We have nine banks from different jurisdictions that have expressed interest in coming to Kenya,” CBK governor Patrick Njoroge told the press late March.
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