Kenya | NIC of Kenya to Acquire Assets of Collapsed Lender Imperial

NAIROBI, Kenya, Capital Markets in Africa: NIC Bank Limited, Kenya’s ninth-biggest lender by market value, will acquire the deposits and some of the assets of collapsed lender Imperial Bank Ltd., central bank Governor Patrick Njoroge said.

The Nairobi-based bank will conduct due diligence on Imperial, which was placed under statutory management in October, and will absorb most of its branches and staff, Njoroge told reporters Tuesday in the capital, Nairobi. The acquisition of the assets was agreed with the state-owned Kenya Depositors Insurance Corp. after Imperial failed to provide assurances on how to reopen the bank, he said.

“Subject to a due diligence and contract review, and following negotiations, KDIC will dispose of, and NIC will assume, a portion of the remaining verified deposits along with certain other assets and liabilities,” the central bank said in an e-mailed statement. “It is expected that depositors will be granted access in a structured manner to about 40 percent of the remaining amount of verified deposits above 2.5 million shillings.”

Kenya’s banking industry is consolidating after the collapse of three lenders over the past year and as the government tightens capital requirements for the industry. The $61 billion economy is over-banked, with 42 banks serving more than 40 million people, compared with 22 banks in Nigeria, which has a population of 180 million and gross domestic product that is nine times bigger, according to Cytonn Investments Management Ltd., a Nairobi-based money manager.

Imperial was taken over by regulators after former Managing Director Abdulmalek Janmohamed died and the central bank was alerted by directors of the bank to inappropriate business practices.

Source: Bloomberg Business News