KCB Group CEO & also the Chase Bank MD Kenya, Joshua Oigara addresses the Press during a Media Briefing on the New Phase of Operation for Chase Bank.
By JAMES NGARE
The new face of Chase Bank’s recovery process from receivership will focus on having a framework that will allow the bank deal with maturing deposits among other issues KCB Group CEO and MD Kenya Joshua Oigara, has revealed.
Mr Oigara said opening up new lending and conducting a due diligence on the bank was other key issues in its recovery plan.
“We have received tremendous support from customers, depositors and other stakeholders to give Chase the firm standing that it is now grounded on which we believe will usher it out of receivership,” Mr Oigara said.
KCB Bank Kenya—the receiver manager appointed by the Kenya Deposit Insurance Corporation (KDIC—said that the Central Bank of Kenya (CBK) has appointed an independent international firm to conduct the due diligence and valuation of Chase Bank (IR).
“The Chase Bank story is being watched closely in the banking community around the world. The successful revival of Chase Bank is an endorsement of the Kenyan banking sector’s ability to effectively deploy globally benchmarked solutions to solve local market challenges,” he added.
Mr Oigara said since April, Chase Bank has recorded improved inflows in excess of Sh 10 billion – a clear indication of the level of support the bank enjoys from the public and the lender has signed up 3,200 new customers.
“Some of the milestones that Chase Bank hit since reopening on April 27, 2016 include: allowing small depositors to access up to Sh1million and activating automated teller services,” he added.
Others include real-time gross settlement, limited lending for trade finance services up to Sh5 million, VISA services and the restoration of correspondent banking by Deutsche Bank, one of the largest banks in the world.
Deutsche Bank’s decision, Mr Oigara said, demonstrates global confidence in the Chase Bank brand.
He added that KCB remains an interested party in Chase Bank and noted that a conclusive decision will be made after the due diligence is completed.
“We intend to close this in the shortest time possible to relieve pressure from customers. We are now keen on looking deeper into the business to determine the next step of action,” he said.
Mr Oigara said the plans they are working on will then help settle the question of how the balance sheet of Chase Bank will be funded going into the future, and who will be the owner.
KCB Group CEO & also the Chase Bank MD Kenya, Joshua Oigara addresses the Press during a Media Briefing on the New Phase of Operation for Chase Bank. Also present was, KCB Head of Corporate and Regulatory Affairs, Judith SidiOdhiambo and KCB Group HR Director and Chase Bank appointed Receivership Manager, Paul Russo.
“The ownership, of which KCB will be one of the interested bidders, will be determined independently by Central Bank of Kenya,” he noted.
He added that the second phase is crucial in order to enable customers to start unlocking part of the billions of shillings in deposits, which are frozen by law.
The KCB boss said at the moment, the receiver manager is working with KDIC and CBK to untangle several regulatory and legal ambiguities that do not make it clear whether big depositors can have earlier access to their money, or whether they can offset their loans.
“These challenges have been borne out of the fact that the laws of placing banks in receivership never envisaged the receiver managing the firm to re-open them for business,” Mr Paul Russo, the Receiver manager appointed by KCB said.
Mr Russo added that in order to overcome such hurdles, the teams at Chase Bank (IR), KCB, KDIC and CBK have been working on a number of regulatory and legal innovations to rewrite policy and therefore Kenya’s financial history.
KCB alongside Chase Bank (IR) has now tabled two legal frameworks to KDIC and CBK aimed at bringing more legal and regulatory clarity to allow the rollover of matured fixed deposits.
It will also provide an option for fixing call deposits to a longer tenure and provide a basis for offering interest rates.
“As the bank progresses beyond its receivership status, there is undivided attention focused on guarding the priorities and interests of the customers and stakeholders,” Mr Russo said.
He added that they are pursuing opportunities for our existing clients to earn limited interest rates on their matured deposit contracts while their funds are held in the accounts.
“We will be loyal to those who have stood by us as we strengthen our presence in the market as the Relationship Bank,” Mr Russo said.
To reopen, Chase Bank received Sh 3.5 billion on April 27, 2016 in a liquidity line from Central Bank.
KCB said the bank has not sought additional liquidity support from CBK and remains self-funding, a strong indicator of the potential to get back into full-flight banking.
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