A retail bank in Kenya has been placed under receivership after running into financial difficulties.<\/p>\n
Panic withdrawals on Wednesday, caused by “inaccurate” rumours on social media, led to a run on Chase Bank, said the Central Bank of Kenya (CBK).<\/p>\n
Its branches were shut on Thursday. The bank is the third to be placed under the CBK’s control in the past year.<\/p>\n
Chase had recently released two conflicting financial statements, a BBC reporter says.<\/p>\n
A subsequent audit showed it had hidden loans to its directors, adds the BBC’s Ferdinand Omondi in the capital, Nairobi.<\/p>\n
In a statement, the CBK said it would appoint a team to run the bank.<\/p>\n
The team would be given 12 months to come up with an “appropriate resolution strategy”, said a CBK statement.<\/p>\n
One depositor told the BBC that he had $100,000 (\u00a370,000) at Chase, and he had no idea whether he would get the money back.<\/p>\n
Chase is a mid-sized bank with a mixture of clients<\/p>\n
Hundreds of customers flocked to Chase branches and ATM machines countrywide to withdraw their cash on Thursday, only to find them closed, our reporter says.<\/p>\n
All 62 of its branches would remain closed until new management was put in place, said CBK chief Patrick Ngugi Njoroge.<\/p>\n
He insisted that the banking sector in Kenya, East Africa’s biggest economy, was stable, despite the banks going into receivership.<\/p>\n
Chase is a mid-sized bank with a mixture of low- and middle-income customers, as well as wealthy businessmen who trade with firms in the Middle East.<\/p>\n
It also has a unit which specialises in Islamic finance.<\/p>\n
On Wednesday, Chase dismissed its chairman and group managing director following the release of two conflicting financial statements.<\/p>\n
One of them had downplayed the bank’s internal loans, says our correspondent.<\/p>\n
An audit later showed the bank had loaned its directors $80m, and its bad debts had skyrocketed to $100m.<\/p>\n
The bank posted a profit of $23m in 2014, only to record a loss of $7m the following year.<\/p>\n
The African Development Bank, which last week agreed to lend Chase $50m for onward lending but had not disbursed the funds, said the receivership would not stop it from supporting the sector.<\/p>\n
“The African Development Bank remains confident about the stability of the financial sector in Kenya,” its regional boss for East Africa, Gabriel Negatu, told Reuters news agency.<\/p>\n
–<\/p>\n
Source: BBC<\/p>\n","protected":false},"excerpt":{"rendered":"
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