Equity supports Spire bank in recovery-post COVID-19

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Dr. James Mwangi, Equity Group Managing Director and CEO (centre), William Rahedi, Spire Bank Board Chairman (right) and Joel Gachari, Mwalimu National Sacco National Chairman (right) during the partnership signing ceremony.
Dr. James Mwangi, Equity Group Managing Director and CEO (centre), William Rahedi, Spire Bank Board Chairman (right) and Joel Gachari, Mwalimu National Sacco National Chairman (right) during the partnership signing ceremony. PHOTO/COURTESY

Equity Bank has signed an Assets and Liabilities Purchase Agreement with Spire Bank Limited for the purchase of certain assets and liabilities of Spire Bank Limited.

The transaction is anchored in Equity’s Plan to support the recovery of the economy post COVID-19.

In this transaction, Equity is acquiring approximately 20,000 deposit customers holding deposits of approximately Ksh.1.3 million which represents approximately 0.25 percent of the group’s customer deposits of Ksh.522.7 million and approximately 0.14 percent of Equity Group’s consolidated customer deposits of Ksh. 970.9 million, as reported in their un-audited half year financial statements as at 30 June 2022.

Similarly, Equity  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 by Spire Bank hit Ksh.945 million in its un-audited half year financial statements in the aforementioned review period.

This represents approximately 0.23 percent of EBKL’s reported net loans and advances to customers of Ksh.417.5 million and approximately 0.15 percent of Equity Group’s reported consolidated net loans and advances to customers worth Ksh.650.5 million as at 30 June 2022.

 “We feel honoured to extend a hand of partnership to teachers with whom we have had a long and strong relationship. 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 and accessing our services through our branches, our agent network and digital banking channels,” Equity CEO Dr. James Mwangi said at the partnership signing ceremony.

“Currently Equity processes a total monthly remittance of Ksh.1.8 billion in teachers’ salaries. 43,000 teachers have borrowed loans valued at Ksh.33 billion with a monthly repayment of Ksh.800 million. In addition, Equity is home to over 24,000 ECDE institutions and primary schools, and over 4,000 secondary schools.”

Dr. Mwangi similarly appreciated the commitment that teachers have shown to Equity’s partnership in moulding the future generations through its Wings to Fly program where they continue to serve as mentors and champions to over 47,000 secondary school scholars with an annual completion rate averaging 97 percent with 82 percent attaining university entry grades and 86% taking up leadership roles.

“We take this partnership as our gesture of gratitude and an opportunity to deepen our relationship with the teaching fraternity by ensuring that they continue to enjoy uninterrupted access to banking services. 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,” he said.

Speaking after signing the agreement, Spire Bank Board Chairman, William Rahedi noted that the partnership will allow esteemed deposit and loan customers to continue enjoying uninterrupted access to banking services through Equity Bank.

“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.

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