Big banks are projected to hike interbank rates as smaller bank suffer capital flight on sudden sezuire of Imperial bank by Kenyan authorities last week.
A new report by Ratings agency, Moody’s predicts that current low confidence in mid tier banks in the country will likely push up interbank charges and spark deposit withdrawals from small banks.
Larger banks were taking caution on level of their exposure by hiking interbank charges.
“We expect that the wider systemic implications of Imperial Bank’s failure will be limited, although we do see a high likelihood of tougher funding conditions for smaller banks,” said Moody’s.
By June 2015, imperial’s interbank exposures had reached Sh 1.6 billion, while the bank issued unsecured subordinated debt totaling Sh2 Billion in September.
National treasury has assured the matter sorrounding abrupt closure of Imperial bank that has been put under statutory management would be resolved in a fortnight.
Accountants watchdog, Institute of Certified Public Accountants of Kenya(ICPAK) has opened investigations to find out what really happened to Imperial bank.
PKF are the external auditors of the troubled bank and also aided in the bank’s Sh 2 billion bond before it went under.
ICPAK has said it will demand the bank’s internal audit report and management letter, citing non-compliance would lead to suspension of operational certificates for the auditors