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PRESS RELEASE

18th April 2016

Nairobi, April 18, 2016 - We would like to inform our stakeholders  on the ongoing developments in the banking sector affecting the country and its effects on KTDA and its managed factories.

The country has 43 licensed banks that are regulated by the Central Bank of Kenya (CBK). Out of these, KTDA on behalf of its managed factories identifies the banks in which to invest in deposits in based on criteria approved by the Board of Directors.

The criteria include asset base, deposits base, liquidity and other ratios as reported in the banks' financial statements printed in the press quarterly and filed with CBK. To further mitigate risk, limits on deposits are set for each bank. Currently there are 21 banks on our panel out of the 43 banks licensed by CBK.

Chase Bank Kenya Ltd is one of the 21 banks that had been selected by the Board having met the criteria set by the board.

The bank was placed under receivership by the CBK on April 7, 2016. KTDA as agent for tea factory companies was among the affected depositors and in total the Group had KES 1.9 billion when the bank was placed under receivership. The approved limit for Chase Bank was 2 billion. The bank was in the process of financing our small hydro power projects to the tune of USD 8.2 million, which was at the documentation stage

In October 2015, Imperial Bank Limited was also placed under receivership with our Group deposits of KES 2.93 billion. In spite of this, we were able to successfully process farmers' second payment and meet our other financial obligations.

We would like to assure all our staff and factory companies that we will continue to smoothly process farmers’ monthly and final payments as well as other factory operational and financial obligations, as usual.

We have had consultative meetings with the Governor of the Central Bank of Kenya and Senior Government officials from the treasury. They have assured us that  they Chase Bank issue will be dealt with speedily to enable depositors; including ourselves access their deposits.

CBK has announced the establishment of a fund to support any financial institution that may be affected by panic withdrawals as was witnessed last week. This will help restore confidence and stability in the banking sector and we are hopeful that other banks will remain open.

We continue to engage CBK and Kenya Deposit Insurance Corporation, Treasury and other institutions to ensure that our interests are given priority when resolving the issues affecting the two banks. The Board will continue to review exposure in the banks to mitigate against further losses.

                                                                                         -ENDS-

About KTDA

The Kenya Tea Development Agency (KTDA) was incorporated on 15th June 2000 as a private company under (CAP 486) of the laws of Kenya, becoming one of the largest private tea management agencies. The Agency currently manages 66 factories in the small-scale tea sub-sector in Kenya. The agency is mandated with promoting and fostering the growth and development of tea growing among the indigenous tea farmers. Its mandate is to oversee and enhance the end-to-end processes from the cultivation of tea, to the marketing of the same to local and international markets.

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For more information, please contact:

Ndiga Kithae
Group Head Corporate Affairs
Phone : +254-20-322-7918
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

CONTACT US

KTDA Farmers Building, Moi Avenue
P.O Box 30213, 00100 Nairobi, Kenya
info@ktdateas.com    
254 - 020 3227000 - 2 / 2221441 - 4
http://www.ktdateas.com

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