In an unexpected turn of events, Central Bank of Kenya (CBK) announced that they are looking for an investor for Chase Bank and increasing the period the bank is under receivership for another 6 months.
This announcement for an Expression of Interest (EOI) has commenced a formal process of selecting a preferred investor for the bank. Once CBK receives and evaluates the EOIs, a shortlist of qualified investors will be given access to confidential data that will enable them to develop a formal proposal for the acquisition of the bank. According to CBK, it is their hope that the process would be concluded within the next six months.
Initially Chase Bank was placed under the Kenya Deposit Insurance Corporation (KDIC) for a period of 12 months commencing from April 7, 2016 and was expected to end on April 7, 2017. With the announcement, the bank will continue being under receivership till September 7, 2017. This is clearly not good news to the individuals and corporates who still have their funds stuck in the bank. These customers had been expecting that they would be able to access their funds once the period under receivership had ended but clearly CBK had other ideas. Though it could be that they want to get a strategic investor on board before they can lift the receivership.