Kenya’s central bank expects to lift Chase Bank out of receivership soon by bringing in new shareholders, the governor of the central bank, Patrick Njoroge, said.
The mid-sized lender was temporarily closed by the regulator in April after an unexplained loss of billions of shillings. KCB Group was appointed its receiver and the central bank promised to return it normal operation by the end of the first quarter of 2017.
Njoroge declined to say if it would meet its self-imposed deadline of resolving receivership by the end of this quarter.
“We have started the process of putting the bank back in the regular field, means identifying a strategic investor…, identifying business models that will be supported,” Njoroge told Reuters on the sidelines of a conference in Switzerland, late on Monday.
The temporary closure of Chase, which followed the closure of Imperial Bank, another mid-sized lender, and Dubai Bank Kenya, a smaller lender, dented confidence in the industry, which has also seen a jump in bad debts.
The central bank froze issuance of new commercial bank licenses in 2015 but it signaled earlier this month it was ready to lift that moratorium, when it said it was finalising two license applications.
Njoroge reiterated earlier remarks that a surge in inflation to 9.04 percent last month was temporary, since it was caused by shortages of some food commodities due to drought.
“The risk is much smaller,” he said, adding that it was up to the central bank’s monetary policy committee, which is scheduled to set rates on March 27, to decide if the inflation jump warranted a policy adjustment. Njoroge chairs the MPC.
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Kenya’s main rainy season usually starts in April and Njoroge said some of the commodities that drove up inflation, such as green vegetables, could be widely available in markets in June if all went well, reducing the pressure on prices.
“It is less of a concern if rains come,” he said.
Source; Reuters
