Mwalimu sacco eyes piece of banking pie
What you need to know:
- In what is seen as preparation for the takeover, Mwalimu last month tapped Equatorial Commercial Bank executive director Robert Shibutse as its chief executive.
- “Part of our strategy is to diversify into banking, real estate, insurance and asset management,” Mr Shibutse said Tuesday when reached for comment.
- Mwalimu sacco is ranked Kenya’s largest by assets, which totalled Sh24.5 billion in the year ended December 2013, according to data from the Sacco Societies Regulatory Authority.
Mwalimu National Sacco is in talks to acquire a majority stake in a small bank as part of its diversification strategy.
The deal, said to be in its initial stages, could see the sacco buying more than 50 per cent in the financial institution, whose majority owner is a local business tycoon.
In what is seen as preparation for the takeover, Mwalimu last month tapped Equatorial Commercial Bank executive director Robert Shibutse as its chief executive. He is expected to lead the transformation of the sacco to mainstream banking.
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Mr Shibutse replaced Mr Joshua Ojall, who had stayed at the helm of the sacco for close to three decades.
The transaction would give a boost to the sacco’s strategy of diversifying into alternative revenue streams to boost its bottom line.
“Part of our strategy is to diversify into banking, real estate, insurance and asset management,” Mr Shibutse said Tuesday when reached for comment.
He did not divulge more information about the planned acquisition, only saying he would talk about it later.
The acquisition could also be a plan by the bank to boost its capital ratios in line with new Central Bank of Kenya requirements.
The regulator requires all banks to maintain capital ratios of 14.5 per cent beginning next year yet the small lender had 12.83 per cent as at June this year, meaning the deal could be part of a plan to meet the threshold.
LARGEST SACCO
Mwalimu sacco is ranked Kenya’s largest by assets, which totalled Sh24.5 billion in the year ended December 2013, according to data from the Sacco Societies Regulatory Authority.
Mwalimu’s current membership is 57,521, a majority comprising teachers in high schools and primary and tertiary institutions, as well as employees of education agencies such as the Teachers Service Commission.
It netted Sh1.9 billion in deposits last year to have members’ total deposits stand at Sh18.5 billion.
Mwalimu will be the second to convert to a bank after Jamii Bora, which bought out City Finance.
