NAIROBI (Reuters) – Kenya’s central bank said on Thursday the remainder of Imperial Bank will be liquidated following an external audit that found it was the only feasible choice given the bank’s weak financial position.
The Central Bank of Kenya (CBK) ordered the privately owned bank to be put into receivership in October 2015 after the board of the mid-sized lender alerted it to suspected malpractice.
At the time, putting Imperial Bank in receivership shook confidence in Kenya’s financial sector which has more than 40 foreign and local banks. The appointment of receivers, who have operated the bank for the past six years, followed soon after the liquidation of a smaller bank.
“KDIC (Kenya Deposit Insurance Corporation) will release information about the liquidation … and payment of depositors in due course,” the bank said in a statement.
KDIC is a state body that protects depositors in the case of a bank failure.
In June last year, KCB Bank Kenya acquired some Imperial Bank assets worth 3.2 billion shillings ($28.37 million) and took responsibility for liabilities of a similar amount, the central bank said.
The central bank said an external audit on the remainder of Imperial, now known as Imperial Bank Limited in Receivership (IBLIR), concluded the a liquidation was the only feasible choice.
“Liquidation would facilitate the orderly resolution of IBLIR … to protect the interest of IBLIR depositors, its creditors and the wider public interest,” it said.
($1 = 112.8000 Kenyan shillings)
(Reporting by George Obulutsa; Editing by Lincoln Feast.)
