Mwalimu National SACCO has fully acquired Spire Bank from Naushad Merali for undisclosed amount.
The deal to sell off Spire Bank begun in 2014 when the Competition Authority (CA) gave Mwalimu National SACCO a nod to acquire a 50% of the then Equatorial Commercial Bank (ECB) office space in Upper Hill, Nairobi. for KSh 500 Million..
Then Mwalimu National SACCO signed an agreement on 10th October 2014 to buy the banking and investment arm of ECB.
Mwalimu National SACCO then became the majority shareholder in ECB, having acquired a 75 per cent stake in the bank at the cost of KSh 2.6 billion. The financial plan involved Mwalimu National Holdings Limited acquiring 51% of Equatorial Commercial Holding (ECH) in the first and 24% stake in the next phase.
ECB was to offload a 51% stake at the cost of KSh 1,663,321,806 and a further 24% at KSh 782,739,673.00.
Clean Bill of Health
After receiving a clean bill of health from parliament and the Commissioner for Co-operatives, Mwalimu went ahead with its ECB acquisition.
Interestingly, a Government probe into the Mwalimu National SACCO-ECB transaction has been kept under wraps to this moment.
At the time of its acquisition, ECB was already in the red with a pre-tax loss of KSh 326.4 Million in the year ending December, 31st 2014, weighed down by bad loans made ahead of the controversial buyout by Mwalimu SACCO.
Recent unaudited results show that Spire Bank made a net loss of Ksh 556 million for the first six months of 2020 compared to a net profit of Ksh 81.48 million in the same period last year.
Also Read; Spire Bank Records KSh556 Mn Half Year Loss as Loan Default Rate Hits 90%
Spire Bank turnaround plan
Spire Bank has a network of branches located in Nairobi and across major towns in Kenya. Spire Bank says the share sale is a tactical move to offload the shares to a strategic investor.
The lender’s acting CEO Brian Kilonzo said the transaction, which was completed at the end of November 2020, opens the door for a strategic investor to come on board.
Spire Bank is in dire need of capital injection to meet statutory regulations and recover from its loss-making position.
Mwalimu SACCO bought out Naushad Merali from the third tier lender in a share purchase deal.
History of Spire Bank
Established as a Finance Company in 1983, the Equatorial Commercial Bank Limited (ECB) commenced operations as a fully-fledged commercial bank in 1995.
In June 2010, Equatorial Commercial Bank merged with Southern Credit Banking Corporation, creating a new enlarged bank under the Equatorial Commercial Bank brand.
The merger gave ECB critical mass to further develop & grow in a dynamic & competitive market place. In 2016 ECB rebranded to Spire Bank.
