Central Bank approves acquisition of Spire Bank by Equity

Tuesday, January 31st, 2023 06:50 | By
Central Bank approves acquisition of Spire Bank by Equity
Central Bank approves acquisition of Spire Bank by Equity

Central Bank of Kenya (CBK) has approved the purchase of Spire Bank by Equity Bank. According to the regulator, Equity Bank only purchased a portion of the teacher-owned bank’s assets and liabilities.

A statement by CBK said the acquisition takes effect today January 31, 2023.  “This follows approval by CBK on January 23, and the Cabinet Secretary for the National Treasury and Planning on January 24, 2023, pursuant to Section 9 of the Banking Act,” the statement reads in part. “As was announced earlier, CBK welcomes this transaction which will enhance the stability of the Kenyan banking sector,”

The buyout is aimed at getting the teachers-owned bank out of a financial crisis. Earlier reports noted that Mwalimu Sacco, the owner of Spire Bank, would pay Equity Bank an additional Sh506 million to settle debts.

Spire Bank began operations in 1984 as a non-bank financial entity and changed its name to Equatorial Commercial Bank Limited (ECB) on December 13, 1995.

On June 1, 2010, it combined with Southern Credit Banking Corporation Limited while keeping the name ECB.The bank’s name was changed to Spire Bank Ltd in December 2014 after Mwalimu National Co-operative Savings and Credit Society Ltd (Mwalimu National) bought the majority of the institution.

Kenyan lender

In another deal, CBK and the Central Bank of Egypt (CBE) gave the nod to Commercial International Bank (CIB) for the purchase of the remaining 49 per cent of Mayfair CIB. With the Sh4.9 billion ($40 million) transaction, the Kenyan lender Mayfair CIB would become a fully owned subsidiary of the Egyptian company CBE. In April 2020, CIB acquired a 51 per cent stake in Mayfair Bank, which began operations in 2017.

Through the acquisition, CIB is the first lender with a base in Egypt to join the Kenyan market.

The transaction was a component of CIB’s plan to grow in East Africa while expanding business and economic ties between Egypt and Kenya. CIB provides services to individuals, small and medium-sized businesses (SMEs), organizations, and corporations.

Mayfair CIB executive director Hossam Rageh said: “Kenya offers great opportunities, and we are excited to be part of the country’s business life and future. We will grow this bank as we continue to provide a first-class service to all our clients.”

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