Spire Bank sinks further with Ksh.784M loss

Spire Bank has sunk further into the hole with its nine months of operations in the year leaving it with a widened Ksh.783.6 million loss.

The four times acceleration in loss making from Ksh.212 million has come on the back of the bank’s extended break to the Central Bank of Kenya (CBK) thresholds.

Spire bank’s operating income has sunk into negative territory returning a Ksh.47.8 million loss from a profit of Ksh.363 million last year.

This is as the bank’s total interest income plunges to Ksh.268.2 million from Ksh.421.7 million.

Spire Bank is now paying more to hold customer deposits than it is earning from lending activities as it books an increased interest expense of Ksh.343.3 million, surpassing interest income.

Further, Spire bank has continued to represent a weakened asset quality profile as its stock of gross non-performing loans top Ksh.2.7 billion or an equivalent 93.1 per cent of its total loan book of Ksh.2.9 billion.

Subsequently, Spire has widened its breach of CBK limits with its core capital falling further to negative Ksh.2.4 billion against a Ksh.1 billion regulatory requirement.

Moreover, the lenders liquidity position remains below CBK’s requirement of 20 per cent at 10.8 per cent in spite of increasing slightly from 7.5 per cent last year.

Teachers represented in Mwalimu Sacco hold a 75 per cent stake in the bank having acquired the controlling majority in 2015 for a Ksh.2.4 billion fee while business man Naushad Merali holds the remaining 25 per cent stakes.

The two shareholders have been in talks to sell their respective stakes with an aim of saving the lender from going under.

A new investor is expected to provide the bank with much needed capital and smoothen out inefficiencies that sees Spire incur an alarming cost of funds to meet operations.