KCB targets portion of Imperial Bank loan book

Kenya Deposits Insurance Corporation (KDIC) CEO Mohamud Ahmed Mohamud with KCB Group CEO Joshua Oigara addressing the press at KDCI offices. (photo credit; David Njaaga, Standard)

Imperial Bank depositors will get access to a total of Sh8 billion under the proposed deal with Kenya commercial Bank.

Kenya Deposit Insurance Corporation (KDIC) Chief Executive Mohamud Mohamud said the depositors will get a further disbursement early next year when they cut a deal with KCB over Sh35 billion loan book which the latter is interested in.“The Sh35 billion is the total loan book minus the toxic ones especially those tied to litigation so we are hoping to convince them to take even 50 per cent,” he said.KDIC and Central Bank of Kenya had announced that Imperial Bank customers are expected to get access to 12.7 per cent of their cash through KCB.

CBK estimates that, coupled up with previous payments, the money will clock 35 per cent.The bulk of Imperial Bank customers were initially allowed to withdraw up to Sh1 million when the lender first opened under the management of KCB and Diamond Trust Bank.NIC Bank was later given reins of the lender and made two disbursements totaling Sh10.78 billion to over 5,500 depositors on behalf of KDIC.

Mr Mohamud said the current payout will clear about 95 per cent of the deposits by December 24.“By the time we announced the pay, we saw KCB had already transferred Sh100 million to accounts and from Wednesday KCB had pitched tents in temples and Imperial branches opened were registering hundreds of new accounts,” he said.

All KCB branches and a select 12 Imperial Bank branches including Mombasa, Upper Hill, Parklands, Malindi, Industrial Area, Watamu, Diani, Kilifi, Westland, Thika and Eldoret are being used to effect the payout.

When KDIC tried to sell Imperial Bank, only two lenders – KCB and Diamond Trust Bank – applied in what the KDIC boss said was discouragement by too much litigation.

KCB had presented a binding offer to CBK in respect to release of depositors funds and verification of loans, which the regulator accepted.

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