Equity is faced with a hurdle in its efforts to acquire Spire bank as earlier commenced in its plans after High Court makes move to freeze the deal.

This is after employees of Spire Bank through the Bank Insurance and Finance Union sued the bank disrupting the acquisition plans.

The suing by employees was alleged of being left in the dark over the acquisition hence an unknown fate amongst the employees.

According to Employment and Labor Relations Court judge Maureen Onyango, lenders are directed to maintain their status quo till a deal is agreed upon with the employees.

“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.

With the case set to be mentioned and heard on October 31st for affirmation on whether the lender and Union shall have agreed, this dispute is most likely going to delay the regulatory approvals from the Central Bank of Kenya (CBK) and the Competition Authority of Kenya (CAK).

If the deal of acquisition goes through, Equity that has Sh1.3 trillion asset base will take over sh945 million in loan assets from the straining Spire Bank and deposit liabilities of Sh1.3 billion.

Equity had hoped to inherit over 20,000 depositors and 3,700 loan customers in the teachers-owned Spire Bank by November after signing a buyout deal last month.

Giving Equity a new foothold in the race for the teachers’ client base, as the purchase is set to make it home to over 100,000 teachers who will access its services across the country.

Mwalimu Sacco, owned by teachers acquired a 75 percent stake in the lender, which was then operating as Equatorial Commercial Bank in December 2014 and in 2020 the remaining 25 percent.

Hence Mwalimu Sacco the majority shareholder in Spire Bank, will pay Equity Sh1.7 billion to cover liabilities.

Based on Union’s first deputy general secretary, Tom Odero, the employees weren’t involved in the acquisition plans which is a huge mistake owing to the fact that some of them might be jobless upon the striking of a deal.

“It is quite clear that the lender is being acquired without stating the fate of the union members, which is a bad labour practice to ignore the employees,” he said.

Bank of Kigali has signed a deal with MTN that is set to digitize most services as it offers new digital products accessible by smartphones to the clients.

The products include The BK mobile app — Internet banking 2.0, BK digital HQ, a mobile app aimed at allowing several transactions inclusive of transfers and scheduling advance payments.

According to Diane Karusisi, the chief executive of BK, the future is mainly digital hence the urgency and need to offer services on a smartphone and thereby enable clients a variety of choices.

The mobile app currently having 57,000 active users, has raised the Banks hopes of getting more users especially with the financing deal with MTN Rwanda as it eases buying of mobile phones on credit as well.

“Smartphones is currently the biggest barrier; most people are in a coverage area but overcoming the hurdle of connectivity is really about the smartphone. Once you have a smartphone you are able to remove that barrier, then you are able to access the consumers you want,” said Mapula Bodide, the new Chief Executive Officer, MTN Rwanda.

MTN Rwanda recently introduced an extended warranty of 12 months to customers who have owned the smart-phone less than three years upon the purchase of a screen protector and/or phone case for that existing phone and repair services for all customers that purchase smartphones from any MTN Service Center.

In the first quarter of this year, BK reported a 44.4 percent growth of profit before tax while total assets increased by 22.4 percent while deposits expanded by 21.7 percent.

The bank had Rwf22.8 billion profit thus expanding its loan book-net loans and advances increased by 10.6 percent year on year to Rwf1013.4 billion as of June 30th, 2022. The bank’s net income increased by 24.5 percent year on year while total assets increased by 16.8 percent year on year.

Central Bank Governor John Rwangombwa said in emphasis that the regulator is keen on promoting partnerships in the sector to facilitate financial inclusion.