KCB now takes over Chase Bank set t re-open on April 27, 2016

The Central Bank of Kenya (CBK)  has announced that all branches of Chase Bank will be reopened on April 27, 2016.

In a press conference on Wednesday April 20, CBK governor Patrick Njoroge said that customers will have immediate access of up to KSh 1 million.
At least 167,290 accounts, equivalent to 97% of accounts, will have their funds available in full.

The online and mobile banking services will also become available. However, branches may initially offer limited banking services, Njoroge has announced.
Kenya Commercial Bank (KCB) has been announced as the institution that will take over majority of the stake in the re-opened Chase Bank and will provide adequate liquidity for the operations.

“We expect the strong management of KCB in Chase Bank to strengthen confidence in market,” Njoroge said.

All employees of Chase Bank have been asked to report back to their stations of duty immediately, and await announcement of new structures within the institution.
While KCB will be the managers of the bank, the independent Kenya Deposit Insurance Corporation will still be in charge in line with the law.
Chase Banks has 180,000 customers at the moment including institutions and non-governmental organisations.

On Thursday April 7, 2016, CBK placed Chase Bank under receivership following a loss of KSh 724 million leading to panic withdrawals from the customers of up to KSh 1 billion within a single day.
This is what brought down the bank.

But CBK unearthed unethical coduct among directors of the bank after it was revealed that one had accessed an unsecured loan of KSh 8 billion.
Chase Bank staff were reported to have borrowed KSh 13.6 billion, an amount that surpassed the lender’s shareholding funds which stood at KSh 11.19 billion.

“As has also been indicated, firm action will be taken against those who have abused their fiduciary duties of managing our financial institutions,” Njoroge added.

Its auditors, Deloitte and Touche, gave a qualified opinion of the bank’s financial records in which non-performing loans increased from KSh 3 billion in 2014 to KSh 11 billion in 2015.
In banking terms, a qualified opinion is a situation in which the auditors receive limited information on the company’s financial performance in a situation where the company does not meet the requisite accounting method standards.
They also found that the numbers did not add up to qualify such results as not much information was given to explain how the figures were arrived at.