with a robust IT platform. You could
get a loan on the go. The staff was
well trained and had a close grasp
of their duties. You could do and
complete a lot of banking on your
phone and at their reception.
Unlike the traditional banks, their
managers were empowered to meet
your banking needs. Very few people
may disagree that banking experience
at Chase Bank was awesome. There
are always exceptions though.
In my opinion, Chase was a
marketing jewel. A case study of a
well executed marketing plan. Their
rapid growth from a single branch
in 1995 to over 50 branches is a
testimony to the fact that there was
something they were doing right. It’s
no surprise that International lenders
and investors were lining at their
doorstep to invest with them.
How the Cookie crumbled
Vultures
Chase banks growth was
phenomenal. In a span of ten years,
it had curved out a niche and was
16 MAL 12/16 ISSUE
sprinting to join the big boys.
With this growth, more funds were
required. They initially went to the
bond market where their request was
overwhelming endorsed. They got
more than they asked for.
The runaway success obviously
invited vultures to the party.
Remember not everybody celebrates
your success. Private investors were
angling for the pie.
Speculation has it that a private
investor tried unsuccessfully to force
the top management to cancel the
bond and take his money in exchange
for stake in the bank.
We can never dismiss the hands of
hyenas from the Chase Bank debacle.
Never before in the history of this
country has a bank collapsed and in
a record two weeks, bids to buy it are
pouring in from all corners. Who is
that foolish investor who wants to
take over a dead bank!
Unstable Niche
Unlike Equity Bank, Chase Bank
targeted young professionals and
‘‘Was the regulator
overzealous or
mesmerized with
accounting figures
to the extent that
they lost the big
picture in maintaining
confidence in the
banking sector?’’
formal startups. They insisted on
those businesses with proper books of
accounts. Now, a majority of Kenyans
startups are the jua kali types that
rarely keep proper books. This niche
was invariably small and unstable.
Chase thus had a very small target
group from the word go. To expand
therefore, they had to lower their
requirements and take on board more
risky ventures. Naturally therefore,
the more they grew, the more risk
they had to take on board.
Text Book Thinking
We are told that the auditors failed