Chase Bank has today announced a shake up in its board which saw the exit of Zafrullah Khan as the Chairman and Duncan Kabui as the Group Managing Director. The two were replaced by Mrs. Muthoni Kuria as the board chair while Paul Njaga will continue serving as CEO while taking on the extra role of Group Managing Director. Mrs. Kuria is a career banker and a certified public accountant and has served on the board for over three years. Whereas Mr. Njaga is the current CEO a position he has held since 2014. He is a career banker having worked with BNP Paribas and as Chief Finance Officer at Equity Bank. The duo’s exit comes after the bank’s financial results issued last week were apparently restated to show loans to directors quadrupled to 10.5 billion from the previously stated amount of 2.6 billion. The difference of about 8 billion is what is believed to have led to the exits.
The board changes I have to say have done very little to calm the nerves of customers at the bank which were already on edge given the messages which have been circulating on Whatsapp. The messages seems to insinuate that the bank is facing closure something which has led to panic withdrawals. A visit to one of their express branches revealed that they did not have adequate funds due to the panic withdrawals. As a matter of fact, there was a long line something which is unusual. This will be a second time unlucky for the bank after suffering a similar run mid last year due to messages on social media and whatsapp. The messages back then consisted of a list of banks purportedly facing imminent closure, this after Central Bank announced that it would put Dubai bank under receivership. However, this was cleared up when CBK came out and assured the public that the list was fake.
A look at the history of Chase Bank reveals that it started out as United Bank (Kenya) which was headquartered in Kisumu. United Bank had been put under receivership and under statutory administration by the Central Bank of Kenya. Its paid-up capital, then, was approximately US$970,000 and it had an asset base valued at approximately US$1.9 million. In 1995, several business people acquired a 60% stake in United Bank (Kenya), after paying approximately US$1.23 million (Kenya Shillings 95 million). In 1996, the bank opened for business under the new owners who rebranded to its present name Chase Bank. In 1997, a decision was made to relocate the bank’s only branch at the time, from Kisumu to Nairobi. Over the years, Chase Bank (Kenya) has progressively improved its bottom line by growing its customer base and increasing its profitability.
Being a loyal customer of the bank it is my hope that it does not go back to where it started out. However, with the backing of its strong shareholders who include Amethis Finance of France, German Investment Corporation among others I do not think this will be the case.