Kenya's central bank seeks bidders for stake in Chase Bank

NAIROBI: Kenya's central bank on Thursday invited investors interested in buying a stake in Chase Bank to submit their bids, with the aim of concluding the transaction by the end of September.

The mid-sized lender is under receivership and was temporarily closed in April 2016 by the regulator after an unexplained loss of billions of Kenyan shillings.

It is now in the hands of Kenya Deposit Insurance Corporation (KDIC), a state body that protects depositors in the case of a bank failure, and the central bank has said it wants to find a strategic investor for Chase but has not said what size stake it will sell.

KCB Group was appointed its manager and the central bank had promised to return the bank to normal operations by the end of the first quarter of 2017 but this has been pushed back.

Bidders will be required to provide an array of information including an understanding of the local banking industry, details of shareholders, capital available and the preferred transaction mode, by April 21, the central bank said.

"No information beyond what is already available in the public domain will be made available to interested parties and there will be no question and answer process at this stage," the regulator said in a statement.

The temporary closure of Chase, which followed the closure of Imperial Bank, another mid-sized lender, and Dubai Bank Kenya, a smaller lender, knocked confidence in Kenya's banking sector, which has also seen a jump in bad debts.

The central bank suspended issuance of new commercial bank licenses in 2015 but it said this month that it was finalising two licence applications, signalling it was ready to lift the moratorium.