Category Archives: NIC

Receiver to salvage Imperial Bank

Today the Receiver Manager of Imperial Bank, the Kenya Deposit Insurance Corporation and the Central Bank of Kenya issued a notice of, and a timeline for, the recovery of Imperial Bank.

This is a suprising about-turn from the perception for much of period since Imperial Bank was suddenly closed in October 2015, in which there appears to have been a leaning by the receiver-manager that Imperial was beyond recovery and that it should be liquidated. Today’s notice comes exactly a year after NIC Bank was appointed to liquidate Imperial bank assets and pay off Imperial’s depositors.


Now, the envisioned recovery process is similar to one being used for Chase Bank which is open, but still in receivership. Expressions of interest are invited from strategic investors. They will be evaluated and the short-listed ones will be given further confidential data to enable them to do due diligence and come up with formal offers that they will present to the to the receiver-manager to decide on. The process will take about a year.

This is a nice sign, but is it one that should have happened earlier? In the same period the fate of other troubled banks in the region has been concluded – in Uganda (Crane and Imperial) and in Rwanda (Crane, which was bought by Kenya’s CBA last week from DFCU of Uganda.

Relief for Imperial Bank Depositors – Part III

This week, depositors at the closed Imperial Bank got some welcome news with the announcement that a third payment was going to be paid to them.

This comes after a first payment last December of up to Kshs 1 million per depositor that was paid through KCB and Diamond Trust banks and another one earlier this year of up to Kshs 1.5 million that was paid out by NIC bank.

This third payment is unique in that it targets the remains depositors many of who are believed to be large depositors.  After the first payment, the CBK had expressed concern that some  depositors had not bothered to claim the funds offered. But assuming that someone has funds of ~Kshs 50 million to Kshs 100 million at the bank, they were unlikely to be elated to received 1 million in the first or second rounds.

This time depositors can access up to 10% of the deposits, so the people above would get Kshs 5 or 10 million – still small, but much better- and depositors have a month to file claims at any NIC bank branches to receive the payments  (deadline 31 Jan 2017).

The news also comes after a few days after newspaper stories that revealed the names and evidence of correspondence of CBK officials  who may have benefited inappropriately from the largesse of the management of the bank that they were supposed to have supervises.

$1= Kshs 102

 

Imperial Bank: The End?

The Central Bank of Kenya (CBK) announced that today that the closed Imperial Bank (IBL), will not reopen. In fact it will be liquidated by NIC Bank, Kenya’s 9th largest bank.

This all started 9 months ago, on 15 September 2015, when the Imperial Bank group managing director (GMD), Abdul  Janmohamed passed away.  The bank directors then discovered fraudulent transactions that the GMD has orchestrated at the bank. They presented their findings to the CBK, who then shut the bank.

While the CBK blames the board and shareholders, the, the shareholders/directors say they were innocent of the wrong-doing perpetrated by the GMD; they had a hands-off role (complying with CBK rules for non-executive directors), and that their external auditors and the Central Bank were lax and should have flagged the 13 year fraud. The shareholders of the bank were optimistic that a strategic investor would buy the bank within 12-18 months of reopening. But it’s not clear if NIC has been selected to do that by the Kenya Deposit Insurance Corporation (KDIC). NIC will also assume the majority of IBL staff and branches, and announcements on the way forward will be made in the near future. 

Imperial Bank logo

  • NIC will pay Kshs 1.5 million to all depositors. Thereafter, it is expected that at some point, NIC will pay any remaining depositors about 40% of their proven deposits (there are individuals and institutions who had tens or hundreds of millions of shillings as deposits) (Last year, KDIC used KCB and Diamond Trust banks to refund Kshs 1 million to each depositor at Imperial Bank)
  • NIC will get access to operate the 26 branches in Kenya. But the 2015 bond information memorandum noted that Imperial owned no property. The Bank owns no Properties. It leases all the premises used for its business operations. In Uganda, the 5 branches there were disposed of in a sale.
  • It’s not clear how many of the 600 employees at Imperial are still around, waiting for jobs
  • The CBK statement notes that a forensic audit is almost complete. This is an exercise that the directors of the bank began after the GMD died to determine the extent of the hole in the bank.
  • Court cases will continue and KDIC will retain other assets of the bank (..cash, collateral, government securities, loans..)
  • If it heads to liquidation, the name Imperial Bank (name) will disappear.

$1 – Kshs 101

Kenya Bank Rankings 2015: Part I

Ranked by assets (and placing in 2014)

1 (1) KCB [Assets of Kshs 467 billion ($4.59 billion), and profits of Kshs 23.44 billion ($230 million)]

2 (3) Equity Bank

3 (2) Cooperative

4 (4) Barclays

5 (5) Standard Chartered

6 (7) CFC Stanbic Bank

7 (6) Commercial Bank of Africa

8 (8) Diamond Trust

9 (10) NIC

10 (9) Investment & Mortgages

==

Two banks in the news over their FY 2015 results

11 (12) Chase: Assets of Kshs 143 billion ($1.4 billion), and a pre-tax loss of Kshs 1.1 billion ($10.8 million)

12 (11) National: Assets of Kshs 125 billion $1.22 billion) and a pre-tax loss of Kshs 1.68 billion ($16.5 million)

$1 = Kshs 102

 

Chevrolet Tembea Kenya – Part II

The Chevrolet TrailBlazer that is being used to support for the Tembea Kenya Maina Kageni Road Trip Tour is a 2015 model, new vehicle, that General Motors is showcasing around the country. In line with the current Chevrolet theme of finding new roads, the Trail Blazer caravan has been to many place likes Lamu, Lukenya, Amboseli, Nyeri, Baringo, Nakuru.

Chevrolet Trailblazer in Mbuinzau

And while new highways and roads are built around the Kenya, the reality is that there are many parts of the country still unpaved and road maintenance is poor as it’s only done every few years. This means that drivers  often encounter potholes, mud, wet roads, and high bumps in Nairobi and other towns all the time, and a tough vehicle with a high clearance is ideal.

Chevrolet is a strong brand world-wide for GM which remains the USA’s largest auto maker with 18% in 2015. In Kenya, General Motors East Africa (GMEA), was started in 1975 as a joint venture between the Government of Kenya and General Motors Company, and is one that is currently 18% owned by Centum, and which is a leading exporter of new vehicles to countries in the greater East Africa region.

And while, in Kenya, it seems that every other car is a Toyota, GMEA is actually leading supplier of new vehicles into the Kenya market with about 6,700 new vehicles (33%) supplied in 2015. GMEA  assembles, markets and sells Chevrolet, Opel and Isuzu vehicles and parts in Kenya and the Eastern Africa region. In Kenya, their Isuzu brand is strong, dominating the bus, truck, and pickup market, but they don’t want to rest on their laurels – hence the introduction of the Chevrolet Trailblazer in the growing SUV category.

 The 2.8 litre diesel, automatic model Chevrolet Trailblazer used in the Tembea Kenya campaign retails for about Kshs 5.1 million ($50,000) [but can be had for much less for embassies and government offices who don’t have to pay Kenya’s hefty new vehicle taxes].

The Trail Blazer is available in 8 different colours, and has 7 seats spread over three rows. Some of the nice features it has include individual overhead lights & A/C setting for each row, side steps, leather seats, rearview view camera with parking assist (useful at Nairobi malls), anti-theft /  immobilizer system,  a touch screen infotainment system that links to the phones via bluetooth or USB,  multiple, charing ports, steering wheel controls, and two setting of four-wheels drive (4WD) that the driver can adjust by simply twisting a knob.

Chevrolet Trailblazer in Mbuinzau 2The TrailBlazers come with a 5-year service plan or over the first 90,000 kilometers which is virtually the life of a typical car owner in Kenya. Servicing is set for every 15,000 kilometers, and owners also have the comfort of a warranty and roadside assistance over the first 120,000 kilometres.

Last week, GMEA signed a deal with Kenya’s leading asset financier, NIC Bank, to enable buyers of Chevrolet and Isuzu vehicles to get up to 95%, at an interest rate if 15.5% which can be repaid over 6 years . This promotion lasts till end of March 2016 and is available at all GMEA locations across the country.x