June 23, 2017 / 9:48 AM / in 2 months

Kenya central bank to extend receivership of Imperial Bank by 12 months

NAIROBI, June 23 (Reuters) - 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.

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 malpractices.

The Imperial Bank receivership rattled confidence in a financial sector where more than 40 foreign and local banks operate - especially as it came just two months after the liquidation of a smaller bank.

"After initial preparations, the formal process will commence with an invitation for Expressions of Interest from potential strategic investors, and the bank’s shareholders if they so wish, in taking an interest in the bank," the central bank said in a statement.

"Mindful of the concerns by depositors and the need for the process to be fully credible to potential strategic investors in order to maximise the value for depositors, the entire process is anticipated to be about 48 weeks."

The central bank had initially hoped to get Imperial Bank out of receivership by March 2016, but this was delayed after the regulator said it needed more time for investigations to determine Imperial's fate. (Reporting by George Obulutsa; Editing by Alison Williams)

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