Kenya Commercial Bank to Sell 93 Chase Bank vehicles Worth Sh230 Million

Image: www.chasebankkenya.co.ke

KENYA: Kenya Commercial Bank has announced that it will sell 93 Chase Bank vehicles worth Ksh. 230 Million in what was said to be a bid to recover loans that were blamed for the collapse of Chase Bank.

A total of 93 motor vehicles including cars, tractors, trucks and tippers are set to be auctioned, with prospective buyers expected to place their bids by Friday.

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KCB in April took over the management of Chase Bank which had been placed under receivership for two weeks after a run on deposits.

KCB was appointed to run Chase Bank and manage its assets and liabilities on behalf of the Kenya Deposit Insurance Corporation (KDIC)

The Central Bank of Kenya (CBK) in late April seized Sh8 billion from disgraced Chase Bank directors who awarded themselves hefty interest-free loans.

CBK said the directors had awarded themselves 15-year interest-free loans under the guise of Islamic banking.

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The prime assets forcefully seized include a business park in Karen, a three-acre parking lot in Nairobi, some 240 acres of land on Mombasa Road, a three-acre plot next the German Embassy on Riverside Drive and various high-end properties in Dubai.

The auction comes at a time when loan defaults in the banking sector have hit a 10-year high. Bad loans stood at eight per cent of the total loans issued by banks in April, up from 6.1 per cent in December and 4.6 per cent in June.

The last time bad loans were more than eight per cent of total loans issued by banks was in October 2005.

An increasing number of Kenyans are taking up bank loans to buy vehicles with the cars used as collateral which can be auctioned in the event of a default.