The Central Bank of Kenya (CBK) has approved the liquidation of the assets of Chase Bank under receivership that was left out in the SBM Bank buyout two years ago.
The regulator on Friday instructed the Kenya Deposit Insurance Corporation (KDIC) to start the liquidation of the remaining assets, in an exercise that is meant to salvage some money for customers who had more than Sh100,000 in the bank.
“On April 7, 2021, KDIC submitted the receiver’s report to CBK recommending that Chase Bank in receivership be liquidated. The report indicates that considering the weak status of Chase’s financial position, liquidation is the only feasible option,” said CBK.
CBK said it has assessed the KDIC recommendation and concluded that liquidation will be the only option to facilitate the orderly resolution of residual assets and liabilities of the collapsed lender.
KDIC will be hoping to salvage as much value as possible from the remaining 25 per cent assets of the lender that was put under receivership on April 7, 2016.
The agency will be expected to release information about the liquidation and payment of depositors.
Mauritian lender SBM Bank in 2018 carve out 75 per cent of certain assets and liabilities from Chase Bank in what was considered as cherry-picking ‘good assets.’
During the Chase Bank deal, SBM valued the total assets acquired at Sh69.59 billion, with property, plant and equipment assigned a fair value of Sh1.25 billion.
Total liabilities were valued at Sh66.68 billion while deposits from non-bank customers were Sh56.9 billion.
