April 24, 2018 / 11:58 AM / in a year

UPDATE 2-Mauritius bank SBM to put $60 mln of extra capital into Kenya's Chase

(Adds background, details, quotes)

By John Ndiso

NAIROBI, April 24 (Reuters) - Mauritius’ banking group SBM Holdings said on Tuesday it aimed to inject an additional $60 million of capital into Kenya’s Chase Bank in a month’s time.

The Central Bank of Kenya has been seeking a strategic investor for Chase, which has been in receivership since April 2016 after failing to meet its financial obligations.

Chase was the third medium-to-small sized bank to be closed in Kenya over a period of nine months, rattling investors in the country, where the level of gross non-performing loans reported by banks rose sharply in 2015.

The central bank said last week that it and state-run Kenya Deposit Insurance Corporation had signed a deal with SBM Bank Kenya Limited for SBM to take 75 percent of certain assets and deposits of Chase Bank, as first agreed in January.

SBM Holdings Chairman Kee Chong Li Kwong Wing told a news conference on Tuesday the deposits SBM is taking on would amount to about $600 million.

Li said SBM had already injected $26 million into Chase Bank after signing an agreement on Monday to take over some of its assets. Under the deal, Chase will be renamed as SBM Bank Kenya Ltd.

In January, Kenya central bank Governor Patrick Njoroge said they had not found a solution for the remaining 25 percent of Chase Bank’s assets and liabilities.

Li said SBM would retain Chase’s property and staff and said the bank would target small and medium sized business seeking to trade with Asian markets.

“This marks also the positive contribution of SBM to regional financial development as Mauritius and Kenya establish themselves as strategic hubs in the Asia-Africa corridor,” Li told Reuters.

The agreement is subject to approval from regulators in Mauritius and Kenya, Li said.

SBM shares closed up 0.3 percent at 7.60 rupees on the Mauritius bourse on Tuesday.

In November 2016, SBM Holdings acquired Kenya’s Fidelity Bank for a token payment of 100 shillings ($0.97) and injected 1.45 billion shillings of fresh capital into it. (Reporting by John Ndiso; Additional reporting by Jean Paul Arouff in Port Louis; writing by George Obulutsa. Editing by Jane Merriman)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below