Equity Bank Inks Deal to Purchase Teacher’s Owned Spire Bank
Equity Bank Kenya has signed a purchase agreement for the buyout of certain assets and liabilities of Spire Bank Limited, offering a lifeline to the struggling lender.
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 Sh1.3billion and 3,700 loan customers with a loan book of approximately Sh945 million.
Speaking during the signing of the pact, Equity Group Managing Director (MD) and Chief Executive Officer (CEO) James Mwangi noted that the bank will be honoured to bring onboard additional 20,000 teachers to the existing ones who account for over 100,000 of Equity Bank’s customers countrywide.
He further lauded teachers for the great work they put in mentoring students sponsored by Equity bank through the Wings To Fly program and also their direct transactions with the lender as it disburses a monthly remittance of Sh1.8billion in teacher’s salaries and over 43,000 teachers have borrowed loans valued at Sh33billion with a monthly repayment of Sh800million.
“We take this partnership as our gesture of gratitude and an opportunity to deepen our relationship with the teaching fraternity by ensuring that they continue to enjoy uninterrupted access to banking services.,” James Mwangi.
He further affirmed that Spire Bank’s deposit and loan customers will continue enjoying uninterrupted access to banking services as a result of the pact.
Spire Bank’s unaudited report for the half-year period that ended June 2022 indicated it had total customer deposits liabilities of Sh1.9billion, net loans and advances to customers of Sh1.7billion and statutory loan loss reserves of Sh800million that reduce the net loan and advances after applying statutory loan loss provisions of Sh945million.
“We are pleased to have reached this agreement which on completion will ensure that our esteemed deposit and loan customers will continue to enjoy uninterrupted access to banking services through Equity Bank Kenya Ltd,” William Rahedi, Spire Bank Board Chairman.
The Equity deal marks a major relief for Spire Bank, which has been surviving on emergency loans from the Central Bank of Kenya.
A recent report by the National Assembly’s Finance committee revealed that Spire Bank has largely relied on CBK support through the reverse repo facility to keep its operations going