Equity Bank Kenya is set to commence the acquisition of certain assets and liabilities of Spire Bank Limited following approvals from the Central Bank of Kenya and the National Treasury, effective January 31st.
In the deal Equity Bank (Kenya) Limited, a subsidiary of Equity Group Holdings, will acquire Spire Bank’s 20,000 existing depositors, whose deposit is approximated to be KES 1.3 billion and 3,700 loan customers with a loan book of approximately KES 945 million.
The regulators’ approvals come after the shareholders of Spire bank approved the acquisition in September last year.
Spire, formerly known as Equatorial Commercial Bank Limited (ECB), started operations in 1984 as a non-bank financial institution and converted into a commercial bank on December 13, 1995.
ECB and Southern Credit Banking Corporation Limited merged their respective businesses with effect from June 1, 2010, and retained the name ECB.
In December 2014, Mwalimu National Cooperative Savings and Credit Society Limited (Mwalimu National) acquired a majority stake in ECB. On May 20, 2016, the bank changed its name to Spire Bank Limited.
Mwalimu has lost billions of shillings at Spire Bank forcing teachers to call for a stop to further losses by offloading the lender and withdrawing the Sacco letter of support.
In January 2022, the national teachers’ Sacco pumped KES 3.4 billion into the lender in a bid to stabilise it.
The acquisition will end Spire bank’s woes of defaulting on all CBK ratios on capital and liquidity following years of erosion through losses.
Spire Bank’s unaudited report for the half-year period that ended June 2022 indicated it had total customer deposits liabilities of KES 1.9billion, net loans and advances to customers of KES 1.7billion and statutory loan loss reserves of KES 800million that reduce the net loan and advances after applying statutory loan loss provisions of KES 945 million.
The lender posted a KES 403 million net loss in the period.
Read also; Equity Bank Inks Deal to Purchase Teacher’s Owned Spire Bank.