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Mwalimu Sacco plans to liquidate loss-making Spire Bank by the end of the month after an unnamed local financial institution showed interest.

Mwalimu Sacco chief executive  Kenneth Odhiambo said yesterday the move will see them exit the banking business following a decision that was also ratified during the Annual Delegates Meeting held on Saturday.

“During the meeting, we looked at issues in terms of business model were from the current strategy and set up, identify some of those areas we can reengineer and be able to generate more value to our money,” said Odhiambo, who spoke in Mwalimu Sacco offices in Nairobi.

Apart from troubled Spire Bank, other issues raised include investments in subsidiaries dealing in asset management and risk insurance brokerage that Sacco is currently undertaking a resolution mechanism in terms of dealing with it.

Senate Committee

The Senate Committee on Finance and Budget investigated the transaction last year seeking to know why teachers seemed to have been duped into an investment that failed to generate revenue.

The board blamed the controversial Sh3 billion sale of the troubled Spire Bank to Mwalimu National Sacco (MNS) on Naushad Merali for withdrawing all of his deposits amounting to Sh1.7 billion immediately he sold his shares in the bank.

The CEO said yesterday that the board has already initiated a discussion with a local entity in terms of how the assets and liabilities of the bank can be taken up.

“We engaged a local entity and we have made progress in terms of engaging transaction advisors, cleared their work and done due diligence and the other entity has also engaged the transaction and legal advisors well cleared their work,” assured Odhiambo.

He also said they have held a meeting with the principal personalities interested in Spire bank and are now good to go in terms of concluding the agreement.

“Our approach was to protect the depositor’s interest so that we have a quiet exit, you know financial service industry is very sensitive and if you do not protect the depositors’ interests and manage it in a way that does not preserve some confidence, it may have a contagion effect on the Sacco,” he explained.

Areas of concern

“The progress is gone to almost the tail end so we are waiting for the two regulators to now okay in what we have agreed and moved on with that,” he added.

On Mwalimu asset management, which is dealing with investments in real estate like Kisaju, he said measures were discussed in terms of in-flows of the asset properties like selling them off and having the money transited to members. Mwalimu Sacco has a membership of over 106,000.

“This year, we are looking at the economy rebounding in terms of growth… the asset base last year was about Sh61 billion and want to move it by another Sh3.5 billion this year. We are looking at a situation where we grow our loan books because that is the most key asset we have and leverage on technology,” the CEO said.