KCB Group has been authorised to take over part of the liabilities and assets of the collapsed Imperial Bank, including Ksh 31.7 billion worth of deposits.
The Competition Authority of Kenya (CAK) approved the transfer of assets and liability in a Kenya Gazette notice dated September 8, 2020.
“The Competition Authority has authorised the proposed transaction which entails the transfer of various listed assets, including outstanding deposit balance amounting to Sh31.7 billion, loans and security portfolios together with all rights, titles and interests thereto to KCB Bank Kenya Limited,” said CAK’s Director-General Wang’ombe Kariuki in the notice.
Rather bizarrely, KCB Bank only used Ksh 10 to acquire part of the Imperial Bank’s business.
This shows the price bank owner can pay for running down their institutions to the point of being forced to sell for almost nothing under the supervision of the Central Bank of Kenya (CBK)
Imperial Bank was shut down by CBK in 2015 after a large-scale fraud running into billions of shillings came to light. Imperial Bank’s management and third parties were accused of siphoning cash out of the company.
KCB’s deal to acquire Imperial Bank cheaply is almost like that of Mauritius’ SBM Holdings which paid Sh100 to take over Kenya’s Fidelity Commercial Bank. SBM also promised to inject additional capital into the small lender.
Unlike other businesses, banks are heavily regulated and failure to comply with conditions laid out in their operating licences can force their closure and sale to third parties.
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