Spire Bank hasn’t published positive results since it was sold to the Mwalimu National cooperative by its former boss Naushad Merali, the late CEO of Sameer Group who died in July. Things have become so dire that the Central Bank of Kenya is making plans to close the financial institution.
Central Bank of Kenya boss Patrick Njoroge is tired of waiting for the powerful teachers’ savings and credit cooperative (SACCO) Mwalimu National to find a new investor to put its Spire Bank back on track. In mid-June, Njoroge’s teams were ordered to prepare for the bank’s closure following repeated requests to find a solution to replenish the bank’s coffers. Spire is also under pressure from the Kenyan parliament, which questioned its director Brian Kilonzo about the bank’s financial health in May.
Mwalimu National has tried unsuccessfully to bring on board four of its competitors, including Cooperative Bank of Kenya, Equity Bank and Kenya Commercial Bank (controlled by President Uhuru Kenyatta’s family). Each were happy to review Spire’s accounts but none were willing to invest in the bank. The requested entry fee is considered too high for a bank that has been stripped bare after eight years of losses.
It was Spire’s former owner, the late tycoon Naushad Merali, who delivered final blow. Days after selling 75% of the bank to Mwalimu National in 2016, Merali, then owner of Sameer Group, withdrew all of his fortune held in the bank, a figure that represented one fifth of Spire’s funds. His withdrawal sparked a wave of departures by other customers. Merali, who died on 3 July, sold the remaining 25% he owned in the company to Mwalimu National in November 2020.
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