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The Central Bank of Kenya, alongside Kenya Deposit Insurance
Corporation have agreed to KCB’s offer to take over five branches of Imperial
Bank. According to a joint statement by CBK and the deposit insurance
corporation, KCB’s offer “….represents a viable proposal for the further
resolution of Imperial Bank Limited, for the benefit of depositors and the
strengthening of the Kenyan financial sector.”
Following the acceptance, Imperial bank customers will recover 19.7 per cent of the remaining deposit balances still held by the collapsed bank. As of December 2018, Imperial Bank customers had recovered approximately 35 percent of the amount of deposits held by the bank at the time of receivership.
The outstanding customer deposits will be availed at intervals
of one year. 12.5 percent of the balances will be released at the signing of
the takeover agreement. A similar amount will be released during the first
anniversary of the agreement. The remaining 75 percent of funds will be paid out
in portions of 25 percent for the next three consecutive years.
KCB’s takeover deal does not include an estimated KSh36
billion of the loans held by Imperial bank clients. CBK and KDIC will help
recover the funds which are still held by borrowers in an effort to protect the
interest of Imperial bank depositors and creditors.
At the time of collapse, Imperial Bank had 27 branches
spread out through the East African region. Kenya’s largest bank, KCB group, has
acquired five of its branches. The Central Bank and the Deposit Insurance
Institution will continue the search for suitable investors for the remaining
22 branches of the recovering bank.
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