The conversion increases the bank’s authorised share capital to Ksh9.2 billion while lifting the bank’s core capital from a deficit of Ksh4.4 billion. The lender is however yet to achieve core capital requirements by the Central Bank of Kenya (CBK) and requires an additional Ksh1 billion.
The new cash injection adds to Ksh1.7 billion in teachers’ deposits that have been converted into share capital since 2015.
Mwalimu Sacco acquired the lender from businessman Neushad Merali in 2015, and has never found footing since then, making a series of losses over the years.
For instance, in the nine months to September 2021, Spire Bank posted a loss of Ksh818.8 million. In a similar period in the preceding year, the lender recorded a Ksh783.6 million loss.
Spire Bank Limited, formerly known as Equatorial Commercial Bank (ECB), was established as a finance company in 1983.
Mwalimu Sacco bought the lender amid expert warnings after it recorded a pre-tax loss of Ksh436 million in the year ending December 31, 2014.
The current asset size of Spire Bank is Ksh4.2 billion including Ksh.2.1 billion in net loans and advances to customers.
Mwalimu Sacco is mulling disposing the lender or ceding majority stake after years of loss-making.
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