Imperial Bank clients to get Sh20.3bn more in KCB deal
The Central Bank of Kenya (CBK) has reached a deal with KCB Group #ticker:KCB to carve out part of assets and liabilities from under-receivership Imperial Bank of Kenya (IBLR) that will send total deposits recovery to about Sh20.3 billion.
The regulator in a joint statement with the Kenya Deposit Insurance Corporation (KDIC) said Tuesday the binding offer received from KCB last Friday had been accepted and would pave the way for depositors to get part of their cash.
“The binding offer accepted, includes granting access to 12.7 per cent of eligible depositor balances remaining at IBLR within 14 days of this announcement, subject to account and identity verifications,” said the joint statement.
“Combining this with earlier disbursements will result in a total recovery of approximately 35 per cent of original eligible deposits held at the date of receivership.”
Imperial Bank held Sh58 billion in customer deposits at the end of June 2015, with operations in Kenya and Uganda. It had 52,398 deposit accounts at the end of 2014.
The CBK’s announcement means the KCB deal will help unlock more deposits to customers, bringing the total recovery to about Sh20.3 billion.
In addition, the offer outlines that KCB will complete the loan verification by end of next March.
“The loan verification process is expected to result in further recoveries for eligible depositors of IBLR,” the statement adds.
According to CBK and KDIC, it is expected that the transaction will be concluded upon the implementation of the binding offer, meaning beyond the first quarter of 2019.
In July the two institutions said only KCB had submitted a revised proposal to buy Imperial Bank which went into receivership on October 13, 2015.