Spire Bank seeks lifeline to remain afloat as cash crunch bites
Spire Bank is scouting for a partner to inject substantial capital to keep its operations afloat.
According to sources, the tie-up is expected to save the institution from insolvency due to poor financial performance that has seen the bank fall short of Central Bank of Kenya (CBK) guidelines for lenders to maintain a core capital of more than Sh1 billion.
The institution has a negative capital after losses wiped out the bank’s capital in the year ended December 2018. Net losses doubled to Sh2.2 billion during that period compared with Sh1.1 billion the previous year.
As the bank gears to make public half year before August 31, as per CBK requirements, shareholders are eagerly waiting to crunch the numbers just two months after an internal audit.
Acting Managing Director Onesmus Muia confirmed the bank is set to file returns with the CBK. “As expected by the regulator we will be issuing our half-year results from which you will be able to see the bank financial position,” Muia told People Daily.
Mwalimu National Sacco acquired majority stake in Equatorial Commercial Bank owned by Naushad Merali before rebranding to Spire Bank after Sh2.4billion injection by the teachers’ sacco.
The Sacco controls a majority stake of 75 per cent of the bank while businessman Naushad Merali owns 25 per cent.
The board appointed Muia to serve as the managing director in an acting capacity last month following the resignation of his predecessor Namaan Ambunya.
“I am in doubt that there’s sufficient shareholder capacity to rebuild the bank afresh. With this background understanding, I offer to resign from the position of managing director,” Ambunya said in his resignation letter dated June 27.