Equity Bank (Kenya) Ltd, a subsidiary of Equity Group Holdings, has today signed an Assets and Liabilities Purchase Agreement with Spire Bank Limited for the purchase of certain assets and liabilities of Spire Bank Limited.
In its un-audited half year financial report as at June 2022, Spire Bank reported total customer deposits liabilities of Sh. 1,938 million and net loans and advances to customers of Sh.1, 745 million together with additional statutory loan loss reserves of Sh. 800 million that reduce the net loan and advances after applying statutory loan loss provisions of Sh. 945 million.
In this transaction, Equity Bank Kenya Limited is acquiring approximately 20,000 deposit customers holding deposits of approximately Sh. 1,322 million which represents approximately 0.25% of EBKL’s customer deposits of Sh. 522,753 million and approximately 0.14% of Equity Group’s consolidated customer deposits of Sh. 970,943 million, as reported in their un-audited half year financial statements as at 30 June 2022.
Similarly, Equity Bank Kenya is likely to acquire approximately 3,700 loan customers that have outstanding loan balances reported at a net carrying value after statutory loan loss provisions of KES 945 million by Spire Bank in its un-audited half year financial statements as at 30 June 2022.
This represents approximately 0.23% of EBKL’s reported net loans and advances to customers of Sh. 417,482 million and approximately 0.15% 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 that 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.
Currently Equity processes a total monthly remittance of Sh. 1.8 billion in teachers’ salaries. 43,000 teachers have borrowed loans valued at Sh. 33 billion with a monthly repayment of Sh. 800 million.
In addition, Equity is home to over 24,000 ECDE institutions and primary schools, and over 4,000 secondary schools.”
“We 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.
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Speaking after signing the agreement, Spire Bank Board Chairman, William Rahedi said Spire’s deposit and loan customers will continue to enjoy uninterrupted access to banking services through Equity Bank Kenya Ltd.
“In view of Spire Bank’s current market position, the board of directors is of the view that this development is in the best interest of Spire Bank’s customers and shareholders,” he said.
The Chairman of Mwalimu National Sacco, Joel Gachari added that 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.