Key facts
- Turkana Trust has been taken into administration by regulators.
- Horizon Bank has acquired Turkana Trust for KES 200 million.
- Regulators cited asset quality problems and the need for an immediate capital injection.
- Depositors of Turkana Trust are now clients of Horizon Bank.
- Erik disclosed a $12 million loan disbursement to EcoRail and potential delays in the East Africa Rail project to regulators.
Erik, having returned to Nairobi, initiated a plan to address regulatory issues at Turkana Trust. He arranged an urgent meeting with Daniel Wanaina from the Central Bank of Kenya's Office of Bank Supervision. During the meeting, Erik disclosed that Turkana Trust had disbursed a $12 million loan to EcoRail, a subsidiary in Mauritius, to revitalize its business and refinance a previous loan with Standard Bank. This disbursement occurred in July, contradicting previous Central Bank guidance against new disbursements. Erik also revealed that EcoRail was facing temporary delays in supplying rolling stock for the East Africa Rail project due to FX market disruptions in Zimbabwe, which could potentially trigger a lengthy project review by the IFC and a pause in loan payments to Turkana Trust. Following this disclosure, regulators from the Office of Bank Supervision and Horizon Bank teams arrived at Turkana Trust's offices. The next morning, news broke that Turkana Trust had been placed into administration and sold to Horizon Bank for KES 200 million (less than $2 million) due to asset quality problems and the need for an immediate capital injection. Depositors were assured their funds were safe with Horizon Bank.