Reuters) – Kenya’s banking regulator missed possible “malpractice” at Imperial Bank Ltd before it was taken over by a government agency, exposing larger problems in the sector, the central bank governor said on Wednesday.
The central bank this month appointed the Kenya Deposit Insurance Corporation (KDIC) to manage Imperial for 12 months after Imperial’s board alerted it to “inappropriate banking practices that warranted immediate remedial action”.
“It is clear that we need to strengthen our bank supervision dramatically,” Patrick Njoroge told a news conference.
Imperial is the second bank in Kenya to be put under the management of a government agency since August, when Dubai Bank Kenya Ltd was put in receivership after liquidity problems.
Privately held Imperial, which appointed a new managing director in September after his predecessor died, was ranked 19th out of Kenya’s 45 lenders at the end of 2014. On June 30 this year, it reported assets of 70.3 billion shillings ($688.54 million).
Njoroge also said that there was ample liquidity in Kenya’s financial markets and the banking sector was “safe and sound”.
($1 = 102.1000 Kenyan shillings)