• Spire Bank has announced a turnaround move from loss-making position to post Sh106.34 net profit in the three months ended March 31, helped by debt collection.
• The bank has already identified a strategic investor under their recapitilisation programme, and the transaction is at an advanced stage awaiting regulatory approval.
Spire Bank is on a rebound after a losing making streak and yesterday announced a net profit of Sh 106.3 million in the three months ended March 31.
It attributed the positive performance to an aggressive debt collection which saw it shrug off a Sh 195.49 million loss over the same period last year.
However, the bank's net interest income declined by 72 per cent to Sh16.97 million from Sh61.40, attributed to low loan disbursements and investment in government securities.
The loan book grew to Sh123.04 million from Sh180.72 million over the period. Purchased Treasury's bonds also dropped slightly by 6.4 per cent to Sh51.21 million.
Non-performing loans rose to Sh1.18 billion from Sh709.74 million last year, with a decline in provisions to Sh1.35 billion from Sh1.55 billion.
Non-interest income increased to Sh194.7 million from Sh15.5 million from the recovered loans.
Managing director Norman Ambunya said the bank had opted to focus on loan collections before expanding its balance sheet.
Operating expenses remained low with cost containment being a key initiative to turning around the business.
“The bank is shedding its historical years’ stagnant performance and is well on its way to an upward trend into profitability,” Ambunya said.
The bank has been struggling over years and in 2018 posted a Sh2.25 billion loss. Shareholders have been pushing for and increase in capital investment and change of ownership.
Spire Bank is majority owned by Mwalimu National Sacco, after it increased its stake to 75 per cent from 51 per cent stake.
The bank previously operating as Equatorial Commercial Bank (ECB) was majority-owned by Kenyan businessman Naushad Merali who sold a majority stake to the teachers sacoo.
The sacco plans to buy out Meralli and offer the state to a new investor.
Ambunya said the bank has identified a strategic investor under their recapitilisation programme, and the transaction is at an advanced stage awaiting regulatory approval.
“The equity partnership process is still ongoing and the shareholders have taken measures to strengthen the bank’s capital position," he said.
The shareholders have resolved to convert their Sh950 million deposits into equity to shore up its financial position.