Chase Bank chairman Mr Zafrullah Khan and group managing director Mr Duncan Kabui have stepped aside following concerns over the credibility of the bank’s financial statements.
“Following the publication of the 2015 financial statements, Mr Zafrullah Khan and Mr Duncan Kabui have stepped aside from the positions of Chairman and Group Managing Director respectively,” said the bank, in a statement to the media.
Chase Bank has attracted attention after its earnings dropped from a profit of Sh2.3 billion in 2014 to a loss of Sh742 million in 2015. Insider loans and advances jumped from Sh1 billion to Sh10 billion in the period under review.
Chase Bank's non-performing loans jumped from Sh3 billion in 2014 to Sh11 billion in 2015.
"The above statements and disclosures are extracts of the bank's financials as audited by Deloitte and Touche and received a qualified opinion," the bank said, in the footnotes of its financial statement, meaning the information provided to auditors was limited in scope.
The Central Bank of Kenya (CBK) on Wednesday blamed mounting banking sector woes on weak lending policies and management failure.
The CBK told reporters that the high non-performing loans in the sector could have been as a result of weak lending policies, laced with management failures and interests.
The regulator Wednesday said it will implement stringent checks, including IT audits after National Bank of Kenya managers were sent home following an audit by the board.
However, CBK Governor Dr Patrick Njoroge said he would not comment on individual banks, when asked about social media rumours over the health of Chase Bank.
"We are going for stringent auditing of bank books including IT audits," the governor said.
Dr Njoroge also said that 80 per cent of the country's liquidity was being held by the top seven out of the 42 banks in Kenya.