By: OTIATO GUGUYU
Panic has hit bank customers as a list of almost half of Kenyan banks made rounds on social media Wednesday claiming they were likely to be closed after news of Imperial Bank’s receivership.
The Central Bank has since Tuesday sent three press releases seeking to reassure depositors and investors of the banking sector stability.
“It has, however, come to the attention of the CBK that there is erroneous information circulating in the social media purporting to identify banks that have failed to meet ‘certain thresholds’,” says CBK’s third press release since Tuesday.
“CBK wishes to assure the financial markets and members of the public that this information and the allegations therein are false,” CBK Governor Patrick Njoroge said Wednesday in the third statement.
CBK released a statement jointly with Capital Markets Authority (CMA) on Tuesday, clarifying the problems at Imperial Bank had been brought to its attention by the bank’s board of directors.
IMPERIAL BANK’s CLOSURE EFFECT
The financial market has also been hit hard as Nairobi Securities Exchange listed banks stocks tumbled for the second day running.
According to the media the decline continued for a second day (Wednesday) with the biggest lender, Equity Group, seeing stocks tumble 6.3 per cent to 40.75 shillings by 10:14 am heading for its biggest drop since September 2014.
Co-operative Bank has slid 3.9 per cent, Barclays Bank is down 2.4 per cent and Kenya Commercial Bank has fallen 3 per cent in today’s trading.
Shares of most Nairobi-listed lenders also closed lower on Tuesday with the entire banking sector recording declines except for I and M Bank- which did not trade.
NIC Bank, Standard Chartered and Housing Finance declined the most; falling 6.7 per cent, 5.5 per cent and 4.4 per cent respectively.
Kenya Commercial Bank (KCB) weakened towards close of the session and touched a 52-week low of Sh40.50 as local investors picked up the stock as it fell, Standard Investment Bank said in a note to clients.