Equity Bank (Kenya) Ltd, a subsidiary of Equity Group Holdings has acquired Spire Bank, in a move meant to ensure the bank does not collapse.
In the acquisition, fashioned as part of Equity’s Plan to support the recovery of the economy post-COVID-19, Equity Bank Kenya Limited is acquiring approximately 20,000 deposit customers holding deposits of approximately Ksh1,322 million which represents approximately 0.25 percent of EBKL’s customer deposits of Ksh522,753 million and approximately 0.14 percent of Equity Group’s consolidated customer deposits of Ksh970,943 million, as reported in their un-audited half year financial statements as at 30 June 2022.
In its un-audited half-year financial report as at June 2022, Spire Bank reported total customer deposits liabilities of Ksh1,938 million and net loans and advances to customers of Ksh1, 745 million together with additional statutory loan loss reserves of Ksh800 million that reduce the net loan and advances after applying statutory loan loss provisions of Ksh945 million.
Similarly, Equity Bank Kenya is acquiring approximately 3,700 loan customers that have outstanding loan balances reported at a net carrying value after statutory loan loss provisions of Ksh945 million by Spire Bank in its un-audited half-year financial statements as at 30 June 2022 which represents approximately 0.23 percent of EBKL’s reported net loans and advances to customers of Ksh417,482 million and approximately 0.15 percent of Equity Group’s reported consolidated net loans and advances to customers KES 650,556 million as at 30 June 2022.
Speaking when announcing Equity Group’s decision at the partnership signing ceremony, Dr. James Mwangi, Group Managing Director and CEO said, they feel honored to extend a hand of partnership to teachers with whom they have had a long and strong relationship. “With the 20,000 teachers who we will be inheriting from Spire bank, Equity will become home to over 100,000 teachers spread throughout the country and accessing our services through our branches, our agent network and digital banking channels. Currently Equity processes a total monthly remittance of Ksh1.8 billion in teachers’ salaries. 43,000 teachers have borrowed loans valued at Ksh33 billion with a monthly repayment of Ksh800 million. In addition, Equity is home to over 24,000 ECDE institutions and primary schools, and over 4,000 secondary schools.”
Dr. Mwangi said that they commit to work with Mwalimu Sacco to achieve their dreams of a Front Office Services Activities (FOSA) by offering tailor-made products, services and relationship that will make Equity the teachers’ bank of choice and a platform for shared prosperity.
Dr. Mwangi added, “The proposed transaction will mean that Spire Bank’s deposit and loan customers will enjoy uninterrupted access to banking services. By delivering this, Equity Bank Kenya is taking a thought leadership role in enhancing the stability of the Kenyan banking sector. This transaction is in line with our vision of championing the socio-economic prosperity of the people of Africa,” concluded Dr. Mwangi
Speaking after signing the agreement, Spire Bank Board Chairman, William Rahedi said, they are pleased to have reached this agreement which on completion will ensure that their esteemed deposit and loan customers will continue to enjoy uninterrupted access to banking services through Equity Bank Kenya Ltd.
The Chairman of Mwalimu National Sacco, Joel Gachari said, “On completion of the proposed transaction on 30th November 2022, all existing depositors of Spire Bank (other than remaining deposits from Mwalimu National Sacco) will become customers of Equity Bank Kenya and enjoy a wide range of products and services through Equity’s extensive infrastructure and channels including branches, agent network and digital self-service channels. We shall also explore other areas of collaboration for the benefit of both institutions and their members.”