Banking

Mauritius-based SBM Holdings makes offer for Kenya’s Chase Bank

The Central Bank of Kenya (CBK) and Kenya Deposit Insurance Corporation (KDIC) have received a non-binding offer from SBM Holdings Limited (SBM) with respect to Chase Bank Kenya, currently under receivership.

This is part of the Expression Of Interest process announced on March 30, 2017.

The non-binding offer includes the acquisition of certain assets and matched liabilities from CBLR, a move the CBK has termed positive for the financial sector.

“CBK and KDIC assess that SBM’s non-binding offer represents a viable proposal for the substantial resolution of CBLR, for the benefit of depositors and the strengthening of the Kenyan financial sector,” CBK said in a statement.

If agreed, it is expected that the proposed transaction will be concluded by the end of 2017.

“Whilst the non-binding offer is still subject to confirmatory due diligence and a binding contract, it is expected that the transaction will inter alia ensure a substantial recovery for depositors currently under moratorium and a transfer of a substantial number of staff and branches of the existing CBLR operations,” the regulator said.

Non-moratorium depositors will continue to have full unrestricted access to their funds, CBK said.

The regulator together with KDIC met with CBLR depositors and shareholders on October 6, 2017, who it says were supportive of the non-binding offer.

SBM is a leading financial services group and the third largest company listed on the Stock Exchange of Mauritius, with a growing international presence currently extending to Madagascar, India and Kenya, where SBM acquired Fidelity Bank in May 2017.

 SBM has a market capitalization of approximately $700 million (about Ksh 72.3 billion) with the government of Mauritius as a significant shareholder, and total assets in excess of $5 billion (about Ksh516.3 billion).

SBM provides all services of a universal bank within a diversified business model. Lines of business include, inter alia: Retail, SME and Corporate Banking.

“Through this potential acquisition, and combined with its other operations in Kenya, SBM will bring its experience and expertise from Mauritius and other markets, to further enhance competitiveness and the resilience of Kenya’s banking sector,” CBK and KDIC said in a joint statement.

CBK had earlier planned to complete Chase bank’s acquisition in the first quarter of this year after eight potential buyers expressed interest including Kenya Commercial Bank.

Chase Bank was placed under receivership in April 2016 following liquidity problems.

KCB took over management of the bank with a plan to fine-tune the modalities of an acquisition.

So far Chase Bank has been allowed to do all transactions including foreign exchanges and issuance of loans.

By Martin Mwita

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