State bank of Mauritius completes Chase Bank takeover

SBM now acquires the assets and liabilities of the bank that was placed under receivership in 2016 by the Central Bank of Kenya due to financial hiccups.

Kenya Deposit Insurance Corporation will retain the remaining 25 percent stake.

The state bank of Mauritius was selected in December last year to buy the assets of Chase Bank Kenya which is under statutory management since 2016.

A statement from the Central Bank of Kenya says SBM has concluded a buyout agreement with the Kenya Deposit Insurance Corporation for the acquisition of some assets and liabilities of the Kenyan bank.

The agreement state that there will be a transfer of 75 percent of the value of deposits currently under suspension at Chase Bank, and the transfer of the majority of staff and branches of the existing operations.

However 25 percent of the value of frozen deposits will remain in Chase Bank.

For the 75 percent of moratorium deposits to be transferred to SBM, 25 percent of each transferred deposit is to be held in a current account with SBM Kenya, with unrestricted usage and without interest being payable thereon, the CBK statement says.

The statement further says depositors will have 25 percent of their deposits held in a savings account with SBM Kenya at an interest rate of 6.65 percent per annum, while the remainder of each transferred deposit will be held on fixed term deposit with SBM Kenya at an interest rate of 6.65 percent per annum.

The Mauritius based bank acquired another Kenyan lender Fidelity bank last year, making its foray into the east African market.

It is the third biggest lender in the Indian Ocean Island.