The Ailing Spire Bank Has Been Sold

Mwalimu National Sacco has acquired a 100 percent stake of the ailing Spire Bank from tycoon Mr. Naushad Merali.

Spire Bank says the share sale by the tycoon to Mwalimu National Sacco gives it an opportunity to offload the shares to a strategic investor.

Spire has been surviving on deposits with customers always taking money away from it with the fear that it might collapse at any moment.

At the end of the month of November, Spire Bank was found to have breached the Central Bank of Kenya limit with its core capital falling to negative 2.4 billion shillings.

This means that even if Spire Bank was to be sold, together with all its assets, it will still have a hole of at least 2.4 billion shillings.

Spire Bank’s liquidity position also remains below CBK’s requirement of 20 percent. For the year to November, the bank sunk into losses of 783.6 million shillings.

The four times acceleration in loss making from 212 million shillings has come on the back of the bank’s extended break to the Central Bank of Kenya (CBK) thresholds. Will the bank survive the turbulent uncertainty of Covid-19?

Spire bank’s operating income has sunk into negative territory returning a 47.8 million shillings loss from a profit of 363 million shillings last year.

The woes of Spire Bank come at the time data showed that Kenyans have little trust in small banks and used 2020 to move their cash to big banks.