Insurer hit by Chase Bank debt

One of the Chase Bank branches after it was placed under receivership (courtesy)

Effects of Chase Bank's placement under receivership continue to be felt in the market as firms come to terms with the loss of their money.

While most companies that bought the lender’s lucrative corporate bond; that was sold for 13.1 per cent have chosen to lie low, disclosures are now revealing those who gave the bank money.

Liberty Life Assurance Kenya impaired Sh187.5 million of the total Sh250 million invested in the lender’s corporate bonds based on its director’s assessment of recoverability.

“The group has an investment (corporate bond) in Chase Bank (In Receivership) amounting to Sh250 million,” Liberty management said in the 2017 annual report.

“The estimation of recoverability of this amount was significant to our audit. Due to the high level of judgment in assessing the level of impairment of the balances, we considered this to be a key audit matter.”

Chase Bank, whose takeover by the State Bank of Mauritius is set to begin on June 24, has left investors smarting with losses over the Sh10 billion bond whose trading was suspended by the Nairobi Securities Exchange in 2016.

It is not clear whether SBM will take up the bond as part of Chase Bank’s liability - although with firms booking the losses, this seems unlikely.