Mwalimu sacco’s deposits-share capital conversion a boost for cash-strapped Spire bank

NAIROBI, Kenya Jan 10-Mwalimu Sacco in an attempt to return Spire bank into profitability, has converted its deposits into share capital worth Sh3.4billion.

In a statement seen by Capital Business, Sacco increased its authorized share capital of Spire bank from Sh5.77billion made up of Sh1.15bilion ordinary share of Sh5 each by adding an additional Sh680million ordinary shares.

Shareholders have converted deposits equal to Sh1.7billion since the acquisition in 2015.

While in a bid to comply with the regulatory requirements of the Central Bank of Kenya(CBK), the capital injection is expected to create solvency in its balance sheet, a move that will see its assets growing more than its liabilities.

The enhanced capital is also expected to make the bank attractive to potential investors/buyers.

Besides getting the bank to stability, the move by the teachers Sacco is also expected to enhance customer confidence and attract more deposits.

Spire bank has been pursuing several strategic initiatives to turn around the business.

Mwalimu National Sacco has supported the operations of the bank over the years through several conversions of deposits to equity.

The giant co-operative, which is the largest in Kenya by assets, bought Spire Bank from the late businessman Naushad Merali in 2015, hoping to gain a foothold in the commercial banking market.