Kenya

Kenya's central bank said on Friday it planned to extend the receivership of Imperial Bank by a year to help finalise a deal with a strategic investor to take a stake in the bank, Reuters reported. The regulator also said it had granted a licence to a new locally owned bank, Mayfair Bank Limited, the second such licence since 2015, when it imposed a moratorium on approving new lenders.

Kenya’s government agreed to swap loans it provided to Kenya Airways Ltd. for equity, a conversion that may give the state a controlling stake in the national carrier, Treasury Secretary Henry Rotich said. The government will also guarantee 77 billion shillings ($745 million) of the airline’s debt to lessors and domestic banks, enabling Kenya Airways to extend its loan repayments to 10 years, Rotich told reporters Tuesday in the capital, Nairobi, Bloomberg News reported. The government has yet to decide what amount of loans it will swap, he said.

Kenya Airways expects to unveil a big capital restructuring in the next two months as part of its turnround strategy after returning to operational profitability following four years of losses, the Financial Times reported. Mbuvi Ngunze, who steps down as chief executive next week, said the airline, which slashed its loss before tax by 61 per cent in the year to March 2017, “is not out of the woods yet”.

Kenya Airways is about to conclude its capital restructuring, its chairman said on Wednesday, edging closer to putting past financial woes behind it, the carrier's chairman said, Reuters reported. The airline, part-owned by the state and AirFrance KLM, sank into the red four years ago after tourism slumped following a spate of attacks in Kenya by militants from the Somalia-based al Shabaab Islamist group. Last year the carrier had negative equity of 35 billion shillings ($339 million), Reuters data showed, and the business was sustained by shareholder loans.

Barclays Bank of Kenya will focus on growing its non-interest income after a jump in bad debts and a government cap on lending rates cut its 2016 pretax profit by 10 percent, it said on Wednesday. The cap on lending rates, introduced last September, was expected to squeeze margins and profits at Kenyan banks, the International New York Times reported on a Reuters story. The cap limits commercial bank lending rates at 400 basis points above the central bank rate, which stands at 10 percent. The government brought in the cap because it said lending rates were too high.

Kenya Airways needs to extend debt repayments and make other changes to restructure its balance sheet, which would take priority over finding a strategic partner, the new chairman of the loss-making airline told Reuters. Shares in the carrier, 27 percent-owned by Air France KLM , have surged 68 percent this month on hopes of a turnaround after four straight years of losses. The appointment of veteran telecoms executive Michael Joseph as chairman has also lifted sentiment.

The Central Bank of Kenya (CBK) has extended the appointment of Kenya Deposit Insurance Corporation as receiver of the bank for a further six months. The regulator says the move follows a request by KDIC for an extension as the 12 months’ receivership term nears end. KDIC was appointed to take over the management of the bank on October 13, 2015 due to unsafe and unsound practices. KDIC will maintain the management and control of the bank and advise CBK of a resolution strategy as soon as it is practicable and not later than six months from October 13, 2016.

Chase Bank has received Central Bank of Kenya’s (CBK) approval to start taking fixed deposits and resume lending, CAJ News reported. The move marks a major milestone in the turnaround efforts of the bank signaling that most of the major issues under resolution have been addressed, paving the way for full resumption of banking services to all customers. Kenya Depositors’ Insurance Corporation (KDIC) placed the bank under receivership by in April, with KCB Bank Kenya Limited appointed as the Receiver Manager.

Kenya's NIC Bank has been appointed as a consultant to assess the assets and liabilities of Imperial Bank, which was put into receivership in October after fraud was uncovered, the central bank said on Tuesday, Reuters reported. The appointment of NIC Bank, a mid-tier bank, would ensure customers receive more of their deposits after the closed bank's shareholders failed to support a proposal for swiftly reopening Imperial, the central bank said in a statement. Three small or medium-sized banks in Kenya have been closed in less than a year, unnerving investors.

Kenya's Uchumi Supermarkets Ltd is on the verge of insolvency as efforts to negotiate a cash injection hit a snag in the first quarter of 2016. Its debt to suppliers has skyrocketed to Ksh3.6 billion ($36 million), double the Ksh1.8 billion ($18 million) quoted last year, according to the management, AllAfrica.com reported. "Settling a significant part of this debt requires funds outside our normal operating activities. We are working on this through disposal of land and sourcing for an investor.