Equity Bank to restructure Spire Bank’s Sh945mn loan book: James Mwangi

NAIROBI, Kenya, Feb 1 – Equity Bank has unveiled plans to restructure the Sh945million loan book it has acquired from Spire Bank in a bid to price risk as the lender seeks to grow its asset base to Sh2 trillion.

Speaking during a press briefing on the acquisition, Equity Group CEO James Mwangi said they are willing to enter into discussions on restructuring with the 3700 Spire Bank customers who have loans, to allow them to settle their dues and retain their securities.

“We are amicable to sitting with you(Spire bank loanees) and entering new loan repayment structures that speak to you and enable you to pay your loan and get back your securities,” said Mwangi.

As for the 20,320 Spire Bank depositors with deposits worth Sh1.3billion, Mwangi told them their money is available as they need it and without restrictions.

The difference between Spire bank’s loan book and deposits leaves Equity Group with a Sh377million liability which they have offset in the transaction.

Mwangi noted that the restructuring will allow the lender to match assets and liabilities acquired to offset customer obligations.

The Equity Group CEO’s announcement comes after the completion of the bank’s acquisition of certain assets and liabilities of Spire Bank.

As part of the transaction, customers holding deposits in Spire Bank, other than remaining deposits from Spire Bank’s controlling shareholder, and specified loan customers have transitioned to become Equity Bank Kenya customers.

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 Sacco has lost billions of shillings at Spire Bank forcing the teachers to call for a stop of further losses by offloading the lender.

On his part, Spire Bank Chairman, William Rahedi thanked Equity bank for allowing them to finish well what they had started through the acquisition.

“Equity bank has stepped up to help us finish well in a project it started with one major shareholder who was Mwalimu Sacco. It has not been an easy walk because Mwalimu had big plans to do great things with Spire bank, regardless, we are grateful that Equity opened up its doors and took us home,” said Rahedi.

Rahedi applauded Spire bank’s directors for approving the liquidation and the staff who withstood the tough period and would talk to depositors who wanted to withdraw their money and go to different banks.

“I really want to applaud the staff, those discussions were not always easy to do, we always had to end up postponing their expectations or giving them hope that we will get a solution soon,” he said.

While thanking Mwalimu Sacco Rahedi: “Some of the solutions we got are because of our major shareholder, Mwalimu Sacco we thank you for allowing us exist to this point. We thank you for walking the tight rope with us.”

Mwalimu National Sacco National Chairman, Joel Gachari said the transaction will strengthen operations efficiency of the sacco as it will cut down future losses and enable the Sacco to utilise its capital to provide enhanced credit facilities to our Members at competitive rates.