Spire Bank, a lender owned by Mwalimu Sacco, has been wound up by its members following a resolution passed at an extraordinary general meeting (EGM) on December 22, 2023.
The members have asked the Central Bank of Kenya (CBK) to appoint the Kenya Deposit Insurance Corporation (KDIC) as the liquidator to oversee the dissolution of the bank.
However, the shareholder’s approval is ‘subject to any applicable regulatory approvals.”
The decision to liquidate Spire Bank comes after several attempts to sell it to other local banks failed.
The lender had been struggling with financial and operational challenges for years, posting losses and failing to meet regulatory requirements.
In January 2023, CBK announced the acquisition of certain assets and liabilities of Spire Bank by Equity Bank Kenya Limited, but the deal was later challenged in court by a group of petitioners.
Equity Bank Kenya Limited was to acquire approximately 20,000 deposit customers with deposits totaling Kshs 1.3 billion and 3,700 loan customers with outstanding loan balances at Kshs 1.7 billion, with a net carrying value of Kshs 0.9 billion after adjusting for statutory loan loss provisions of Kshs 0.8 billion.
According to Gazette Notice No. 209 dated January 5, 2024, by Mr. William Rahedi, Board Chairperson, published on the bank’s website, the winding up of Spire Bank is a voluntary liquidation pursuant to Section 393(1)(b) of the Insolvency Act, Chapter 18 of 2015, Laws of Kenya.
The notice also states that the liquidator will be responsible for settling the claims of the creditors and distributing the remaining assets of the bank to the members.
Spire, formerly known as Equatorial Commercial Bank Limited (ECB), started operations in 1984 as a non-bank financial institution and converted into a commercial bank on December 13, 1995.
ECB and Southern Credit Banking Corporation Limited merged their respective businesses on June 1, 2010, and retained the name ECB.
In December 2014, Mwalimu National Cooperative Savings and Credit Society Limited (Mwalimu National) acquired a majority stake in ECB. On May 20, 2016, the bank changed its name to Spire Bank Limited.
However, the bank failed to achieve its objectives and suffered from poor performance and governance issues.
