Mwalimu Sacco Teachers’ Deposits Trims Spire Bank’s Half-Year Loss
Teachers represented by the Mwalimu National Sacco have alleviated Spire Bank’s capital difficulties by converting their deposits into share capital.
The Sacco converted Ksh.3.4 billion in deposits earlier this year to replenish the bank’s depleting capital basis.
According to the bank’s most recent financial statements for the six months ending in June, spire’s core capital improved from a negative position of Ksh. 3.1 billion to a deficit of Ksh. 1.8 billion.
Spire Bank still violates the Central Bank of Kenya’s (CBK) capital standards, necessitating a further injection of at least Ksh.1.8 billion to meet regulatory requirements.
In the six months following the deposit conversion by teachers, the bank’s deposits decreased by a significant 63.5% to Ksh.1.9 billion, from Ksh.5.2 billion.
Spire Bank nonetheless saved money due to the decrease in deposits, as its total interest expenditures decreased by 61.6 percent in the same time, from Ksh.221.1 million in June 2021 to Ksh.85 million in June 2022.
Spire Bank has realized an operating income of Ksh.70,3 million throughout the quarter, compared to a loss of Ksh.4.5 million previously.
In the same period, the bank’s total operating expenses decreased by 7.3% to Ksh.470.9 million from Ksh.508.8 million due to lower loan-loss provisions and employee costs.
Despite this, Spire’s asset base has decreased by 22.2% to Ksh.3.5 billion as net loans and customer advances have decreased by 26.1% to Ksh.1.7 billion from Ksh.2.3 billion.
In recent months, Mwalimu National Sacco, the bank’s largest shareholder, has considered a number of possibilities, including the possible sale of Spire Bank’s assets, to put the bank back on its feet.
ALSO READ:
Today’s teachers, who control the bank, converted around Ksh 1.7 billion in deposits to fund the bank’s operations.
Spire Bank has previously reduced its six-month operating losses to Ksh.403 million, from Ksh.512.9 million, due to lower costs.
Mwalimu Sacco Teachers’ Deposits Trims Spire Bank’s Half-Year Loss
