Spire bank is a financial institution owned by teachers' Sacco mwalimu national having been bought from the late businesmam Naushad merali.
Since it's acquisition over five years ago, the bank has just been struggling to stay afloat having flouted all central bank capital requirements designed to ensure financial stability.
Reports by busines daily indicate that the bank's defaulted loans have overtaken it's net loan book.
This signifies the lender's meltdown which now needs at least Ksh 4.14 billion to stabilize it's operations.
According to the paper, gross non-perfoming loans stood at Ksh 2.64 billion in the half year ended June which is a drop from Ksh 2.69 billion a year earlier.
Spire bank last made a profit eight years ago when it was Operating under equitorial commercial Bank (ECB). Ever since, it has been accumulating loses to the high of Ksh 8.92 billion.
The lender has a negative core capital of Ksh 3.14 billion meaning that it requires Ksh 4.14 billion to meet CBK minimum capital of Ksh 1 billion.
In April this year, spire reported of having been involved in talks aimed at getting potential investors.
The four investors are conducting due diligence on spire bank which is one of the banks that are in breach of CBK minimum capital and liquidity requirements.
The liquidity ratio of the bank stood at 4.33 percent against the required minimum of 20 percent, marking a drop from December’s 7.66 percent.
Three previous potential investors including UK- based crypto lender block bank, backed out of the deal.
Teachers will be holding their fingers crossed to see if their desire to sell the bank which has become a financial sink hole will be fulfilled.
Its widely believed that because of the troubled bank, members of mwalimu sacco who are mostly high school teachers got low rebates ladt year on their deposits at 9% which was the lowest in the recent past.
The trend isn't likely to get Different based on this revelations. Last year, teachers didn't get dividends on their share capital.
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