This archive report was first published on 31 August 2019.
On August 31, 2019, KCB Group announced a revised final offer to depositors of Imperial Bank Limited in Receivership (IBLIR), trimming its payout by Ksh.6.5 billion.
The lender will now take on a lesser 7.5 percent of IBLIR deposits and a similar margin of the performing loans portfolio, down from the initial 19.7 percent offer.
The revised offer follows the disclosure of IBLIR's deteriorating net assets by KCB earlier this month, which partly contributed to the revision.
KCB's re-evaluation of IBLIR's 'good book' at Ksh.5.2 billion ($50 million) from a higher Ksh.10.3 billion ($100 million) 12 months ago pointed to a likelihood of worsening non-performing loans and heightened impairment losses.
Despite the reduction in payout, KCB Chief Executive Officer Joshua Oigara hailed the final offer as historic, given Imperial Bank's prolonged collapse.
'We are paying depositors even before seeing a resolution of the bank. This is a first for the IBLIR custodians and represents a very unique innovation,' he said.
The innovation involves the Central Bank of Kenya (CBK) and the Kenya Deposit Insurance Corporation (KDIC), aiming to protect depositors' and creditors' interests in the pursuit of a quick resolution to the bank's collapse.
The recovery of the additional Ksh.3.98 billion brings the cumulative depositors' payout to 38 percent of all substantiated deposits in the bank, with KDIC having availed one-third of eligible funds to 92 percent of depositors in December 2018.
However, the payout does not include an estimated Ksh.36 billion of depositors' funds stuck in ongoing litigation.
Depositors who have received payments exceeding Ksh.6 billion will receive the revised payout in three tranches, starting with a clearance of Ksh.500 million (12.5 percent) upon the signing of the final binding offer between KCB and KDIC.
