Blow to Equity after court freeze its acquisition of Spire Bank
Equity Bank Group’s bid to acquire struggling Spire Bank has faced a headwind after High Court froze acquisition bid of the troubled lender as row with its employees escalates.
Labour Relations and Employment Court Judge Maureen Onyango said the lenders should maintain their status quo until a deal is agreed upon with the employees who argued they were not informed about the winding up of Spire Bank.
“That in the meantime, status quo as of the date of this court’s orders to be maintained until either party agrees on suitable undertaking, and is signed by the respondent (union),” Justice Onyango said.
The case will be mentioned on October 31.
Through the Bank Insurance and Finance Union (BIGU), Spire Bank’s employees sued to block the acquisition, arguing their employer had kept them in the dark over the acquisition.
Equity announced that it had entered into an Assets and Liabilities purchase agreement with Spire Bank Limited to purchase certain assets and liabilities.
Equity will acquire Spire Bank’s 20,000 existing depositors whose deposit is approximated to be Sh1.3billion and 3,700 loan customers with a loan book of approximately Sh945 million.
Speaking during the signing of the pact, Equity Group Managing Director (MD) and Chief Executive Officer (CEO) James Mwangi noted that the bank will be honoured to bring onboard additional 20,000 teachers to the existing ones who account for over 100,000 of Equity Bank’s customers countrywide.
Spire Bank’s unaudited report for the half-year period that ended June 2022 indicated it had total customer deposits liabilities of Sh1.9 billion, net loans and advances to customers of Sh1.7 billion and statutory loan loss reserves of Sh800 million that reduce the net loan and advances after applying statutory loan loss provisions of Sh945 million.
