Imperial Bank sale raises hopes for big depositors
Imperial Bank Likoni branch in Mombasa. FILE PHOTO | NMG
What you need to know:
- Imperial Bank was reported to have been holding more than Sh80 billion in customer deposits at the time of its collapse in 2015.
- The sale announced on Friday could revive hopes for large depositors of the bank, who included wealthy business people and institutional investors.
The impending sale of the collapsed Imperial Bank has raised hopes for big depositors who stood to lose billions of shillings had the lender gone into liquidation.
Imperial was reported to have been holding more than Sh80 billion in customer deposits at the time of its collapse in 2015.
About Sh6.4 billion is said to have been paid out to 16,955 small and huge depositors who came forward after the Central Bank of Kenya (CBK) decided to pay Sh1 million or less through the KCB Group and Diamond Trust Bank in December 2015.
In June 2016, the regulator appointed NIC Bank as a consultant for Imperial, with the key task of separating the clean and toxic books of the fallen lender.
The arrangement, which saw NIC process payments to depositors and collect loan repayments came to an end in May.
NIC made disbursements worth Sh10.78 billion to more than 5,500 Imperial Bank depositors and collected Sh5 billion from loan repayments in that period.
The sale announced on Friday could revive hopes for large depositors of the bank, who included wealthy business people and institutional investors.
The CBK last week said Imperial Bank’s sale kicks off next month with an invitation to potential buyers to express their interest.
The CBK and the Kenya Deposit Insurance Corporation, which is the statutory manager of the collapsed lender, say the sale will take about 48 weeks, following a similar path to the one the CBK is taking in selling Chase Bank.
Imperial was placed in receivership on October 13, 2015, after the CBK uncovered fraud at the lender that saw an estimated Sh34 billion of depositors’ cash embezzled by top management and shareholders.
“The formal process will commence with an invitation for Expressions of Interest from potential strategic investors, and the bank’s shareholders if they so wish, in taking an interest in the bank,” said CBK in a statement on Friday.
