Nairobi — Equity Bank Kenya is set to commence the acquisition of certain assets and liabilities of Spire Bank Limited following approvals from the Central Bank of Kenya and the National Treasury.

The acquisition effective January 31, is set to offer a lifeline to the struggling lender.

In the deal Equity Bank (Kenya) Limited, a subsidiary of Equity Group Holdings, will acquire Spire Bank's 20,000 existing depositors whose deposit is approximated to be Sh1.3billion and 3,700 loan customers with a loan book of approximately Sh945 million.

The regulators' approvals come after the shareholders of Spire bank approved the acquisition on September 8 last year.

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 with effect from 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.

Mwalimu has lost billions of shillings at Spire Bank forcing teachers to call for a stop of further losses by offloading the lender and withdrawing the Sacco letter of support.

In January 2022, the national teachers' Sacco pumped Sh3.4 billion into the lender in a bid to stabilise it.

The acquisition will end Spire bank's woes of defaulting on all CBK ratios on capital and liquidity following years of erosion through losses.

Spire Bank's unaudited report for the half-year period that ended June 2022 indicated it had total customer deposits liabilities of Sh1.9billion, net loans and advances to customers of Sh1.7billion and statutory loan loss reserves of Sh800million that reduce the net loan and advances after applying statutory loan loss provisions of Sh945million.

The lender posted a Sh403million net loss in the period.