Category Archives: Equatorial

Kenya’s Top Banks in 2022

Spire (38th in assets), the smallest bank in the country, had been up for sale, and Mwalimu Sacco announced that they would not be putting in any more capital in the Kshs 3.5 billion asset bank to bury a bad investment made in 2015, but still faces resistance from some stakeholders. Equity Group (2) agreed to buy Spire‘s assets in September 2022.

Access, the largest bank group in West Africa, bought Transnational, the 33rd largest bank in Kenya in 2019 and renamed it. Then in June 2022, Access announced that they would take over Sidian Bank (20) with Kshs 43 billion of assets, by buying a majority stake from Centum for Kshs 4.3 billion. 

President William Ruto announced at the Nairobi Securities Exchange in October that Credit Bank (27) along with Bio Foods were on a path to floating their shares at the NSE. He encouraged the private sector to join the new government in working to revitalise the NSE and promised 5 to 10 public listings – and where Development Bank (29) may also feature. 

First Community Bank (26) overcame a mini-run in October and assured panicked depositors that their funds were safe.

Top 10, by assets in June 2022.

10. Bank of Kigali, which is cross-listed in Nairobi. 

9. I&M.

8. Stanbic Bank

7. Diamond Trust

6. Standard Chartered

5. Absa Bank Kenya.

4. NCBA briefly edged ahead of Co-op for 3rd in the assets race this year.

3. Co-operative Bank

2. Equity Bank have a slight edge in group assets over KCB Group (both at Kshs 1.26 trillion) after buying two banks in DRC.

1. KCB Kshs 887 billion assets and Kshs 23.8 billion profit as of June 2022 and then bought into DRC before the end of the year. 

$1 = Kshs 118 in June 2022.

Equity to absorb Spire Bank

Kenya’s smallest bank will wind up banking operations in a deal that transfers most of its business to Kenya’s second-largest bank, by market share.

A notice by Spire Bank states that all its depositors, except its main shareholder, will become customers of Equity Bank Kenya. Spire had 20,000 depositors, with about 3,700 loan customers and an equivalent of Kshs 1.32 billion of deposits will be transferred to Equity along with loans worth Kshs 945 million.

Equity term the transaction as “immaterial” to their group financial statements as it only adds 0.25% to their deposits now at Kshs 522.7 billion, but which will ensure that Spire customers enjoy uninterrupted banking services. Spire will pay Equity a cash amount, estimated at Kshs 468 million, to bridge the difference in the loans and the deposits transferred.

As per the agreement, Spire will cease offering bank services and deal with its creditors and staff. Spire’s parent, the Mwalimu National Sacco, has over Kshs 60 billion in assets but will walk away from the ill-advised venture into banking – that never made a profit from when it was acquired as Equatorial Commercial Bank – confident that the exit decision is in the best interests of its customers and stakeholders.

edit January 24, 2023: Through a notice by the Governor of the Central Bank (CBK), the Government has approved the deal in which Equity Bank Kenya is acquiring certain assets and liabilities of Spire Bank, effective on 31 January 2023.

edit February 1, 2023: Equity and Spire announced the completion of the deal transferring deposits and loans between the two banks and inviting customers of Spire to access their deposits at Equity.

  • Equity published a notice to guide the transfer of customers at 10 branches of Spire to specific branches of Equity.
  • On the same day, Spire issued redundancy notices to all its bank staff. Spire Bank will not continue its banking operations and is offering all its employees one month’s salary for every year worked as severance, payment for leave days not taken, and pension dues. The minimum payout will be Kshs 300,000. Employees will also get a 25% rebate on loans and the medical cover will run for another six months to June 30, 2023.


Spire Bank Capital Injection

Spire Bank shareholders will hold an extraordinary general meeting at the end of November 207 to approve an increase in bank capital that has been eroded by recent losses at the bank.

At the November 27 EGM, shareholders will approve the creation of 100 million new shares, worth Kshs 500 million that will be allocated to Equatorial Commercial Holdings. Kenyan banks are to have a minimum core bank capital of Kshs 1 billion, and as at June 2017, Spire’s capital was down to Kshs 1.6 billion and the bank had a half-year loss of Kshs 307 million coming on the back of a 2016 loss of Kshs 967 million. Spire had Kshs 13 billion assets, Kshs 6.4 billion loans, and Kshs 7.6 billion deposits as at June 2017. But interest income and total income at the half-year was sharply down from that in June 2016 which could point to their performance trend for the end of 2017.

In 2015, Mwalimu SACCO one of the country’s largest credit societies bought out and rebranded the former Equatorial Commercial Bank as Spire. Equatorial had itself been formed from a merger between Southern Credit and Equatorial banks in 2010. 

Mwalimu SACCO has Kshs 37 billion in assets and Kshs 3 billion profit in 2016 and has over 70,000 members as owners.  This is the second bank capital injection by Mwalimu at Equatorial after another with the buyout. The shares will be allocated among Equatorial Commercial Holdings which owns 98% of Spire bank has shareholders including Mwalimu National Holdings (75%), Yana Towers (10%), A.H. Butt (8%), Yana Investments (6.75%, and who also own 11% of CBA) and N.N. Merali (0%).

Bank Mergers & Musical Chairs in 2016

There’s a moratorium on new banks licences, but still a lot happening in the ownership suites.
Who’s In
  • Bank M (of Tanzania) has bought out and rebranded (the former) Oriental Commercial Bank.
  • Sidian Bank: Centum bought out and rebranded (the former) K-Rep bank.
  • Spire Bank: Mwalimu SACCO bought out and rebranded (the former) Equatorial Commercial  bank.
Who’s Hanging On
  • Chase bank now reopened, but yet to resume lending. An ownership decision  is expected soon (process being managed by KCB)
  • Credit bank:  Discussions are ongoing about a sale to  FEP Holdings
  • Imperial bank (assets will be assessed and managed by NIC bank)
Who’s on the Way Out
  • Dubai bank (proceeding into liquidation)
  • Giro bank which has been bought out by I&M bank.
  • edit The CFC brand as CFC Stanbic Bank and CFC Stanbic Holdings (i.e group) becomes Stanbic Bank Kenya and Stanbic Holdings PLC respectively  – this comes about nine years after their merger of CFC and Stanbic banks.

Mwalimu SACCO acquires 51% of Equatorial Bank

EDIT: Jan 27:  The Government has ordered an inquiry into Mwalimu National Sacco’s bid to acquire Equatorial Commercial Bank. The Commissioner of Co-operatives has appointed an inquiry team report to him following a protest by the Co-operative Alliance of Kenya (CAK) 

Last week, Mwalimu SACCO became  the majority shareholder of Equatorial Commercial Bank (ECB), acquiring  51% of the bank for Kshs 1.6 billion (~$18 million). The acquisition was cleared after no objections were received from the Central Bank of Kenya (CBK), Competition Authority of Kenya (CAK) and Sacco Societies Regulatory Authority (SASRA). There was another objection, but not from any of the regulators, who were aware of the issues raised.

Mwalimu with Kshs 24.5 billion of assets (2013), acquired the stake in ECB,  the country’s 27th  largest bank (Kshs 15 billion) which has been boosted by an earlier merger with Southern Credit Bank. Mwalimu will have three (3) seats on the board of ECB, but the Society is not converting into a bank nor merging with ECB. Due diligence of the financial and legal processes was done by Ernst and Young and Mose & Mose Advocates.

This comes two years after the LAPTrust, a pension scheme and the Kenya Tea Development Agency acquired a combined 22% stake in Family Bank – and LAPTrust estimated their stake was worth 1.6 billion in 2013, just two years after paying a 1/4 of that amount.