Teachers Eye Sale Of Spire Bank By March

 

By Kepha Muiruri For Citizen Digital

Teachers represented in the Mwalimu National Sacco are eyeing the disposal of its banking unit Spire Bank by the end of March this year.

In a communique to members on Wednesday, the Sacco’s Chairman John Ochieng says details of the proposal will be clear by the end of the quarter as the teacher’s Cooperative seeks to take the bank out of its hands by way of sale of liquidation.

“The Sacco is currently engaging both regulators, the Central Bank of Kenya and SASSRA as well as potential entities to take over Spire Bank completely off Mwalimu National’s ownership,” he said.

Further, the Sacco says it has not and will not inject any additional funds into the bank in terms of cash flows from the Cooperative.

With regards to its recent deposit to capital conversion, Mwalimu says the move does not afford the bank a new lease of life but is rather a process allowing for the voluntary liquidation of the bank.

“The end game of the strategy is to take the bank off the Sacco’s hands by March 2022 so that Mwalimu National Sacco can focus on its core business of mobilising members’ savings and offering access to credit. It's time for the Sacco to cut its losses emanating from the Spire bank venture and that must be done now,” added Mr. Ochieng.

Earlier this week, documents seen by Citizen Digital revealed the Sacco had converted deposits held in the bank to capital equivalent to Ksh.3.4 billion, moving the lender closer to meeting CBK statutory requirements.

The capital release is expected to make the lender attractive to a potential buyer or investor.

Spire Bank has been majority-owned by Mwalimu National Sacco since its 2015 acquisition from businessman Neushad Merali.

In years following the purchase, however, the bank has been stuck in a loss-making spree making it a sour investment for the teachers who are now keen to cut their losses.

The bank has since drained all of its shareholder funds after accumulating more than Ksh.9 billion in losses across six years.