Mauritian state bank SBM has to publish audited accounts of its Kenyan operations and disclose financials of Fidelity Bank, which it took over two years ago, so as to get the confidence of depositors and the public.
Assets managers Fusion Capital say SBM Kenya has not yet put out details of the financials of its local operations due to issues relating to lack of auditing of Fidelity before takeover.
The analysts said this raised the spectre that the Central Bank of Kenya (CBK) might not have approved the auditors of the bank.
“The CBK has, apparently, not yet approved their Kenyan auditors, and prior to the takeover, the previous management at Fidelity had not published accounts.
"We have no reason to believe that this points to trading problems with their Kenyan acquisition but it remains a reason for caution in assessing their strength and prospects. SBM will have to publish this information soon, in order to engage with Kenyan depositors,” said Fusion Capital.
The report was released by Fusion Capital executive director for asset management Michael Kimondo.
It said the management must put the audited financials in mind even as they complete the Chase Bank transaction.
Chase Bank, which collapsed two years ago, was also recently acquired by SBM Holdings. SBM is seeking to use its Kenyan acquisitions as its entry into the rest of Africa.
Fusion Capital notes, however, that the buyout of Chase Bank was a shrewd one as it represented low risk for the Mauritian entity.
“In this latest offer, which is expected to be concluded by Q1 of 2018, they have done a shrewd deal on Chase, effectively buying Chase, in a very low-risk way for nothing, an indication of very smart management.”
Mr Kimondo said the asset management company had carried out a detailed analysis of the bank.
“We believe this deal is good for depositors as it will guarantee access of 75 per cent of their deposits over a period of three years,” he added.
The Fusion report says SBM injected Sh1.5 billion into Fidelity as the bank was below statutory minimum capital requirements of Sh1 billion required for a bank operating in Kenya.
“The entry into Kenya to them would operate as a gateway to the rest of Africa,” said the report.