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It may not be among Kenya#39’s most prominent banks but for the last six months equatorial commercial bank has caught news headlines in the wake of its proposed majority acquisition by one Kenya#39’s largest savings and credit cooperatives Malema national Sacco forth last two years Kenya#39’s banking sector has witnessed a capital raising frenzy as the central bank requires commercial banks to raise additional capital and for equatorial commercial bank it#39’s need for additional capital seems quite dire if the recent quarterly results are a pointer to go by the close of the nine-month period ended 38September 2014 ECB#39’s untamed profits to that sixty-six point nine million shillings marking a sixty-five percent drop in profitability over the previous year this against the backdrop of athirty-four percent increase in Theban#39’s non-performing loans to slightly over 1.3 billion shillings surpassing the bank#39’s core capital of 1.2 nine billion shillings the quality of the asset burkas quickly deteriorated, and you're talking about NPL ratio fifteen percent think it#39’s more than that and thatthat'’s why approaching a key strategic partner with a view to injecting more capital to fill the holes makes four cents this comes nearly five years since easy be merged with an equally smaller lender southern credit bank in a bid Tories its minimum core capital ahead of the 2012 deadline certain liabilities that ECB to Kampala mite includingnon-performing significant amount nonperforming loans ECB needed to put more capital to fill in these holes Theban#39’s choice of Malema national Sacco a strategic investor appears to also have been informed by its goal of transforming into a leading retail bank by 2018 this is especially considering that Malema socks clientele comprises the teaching community a major consumer of financial services it requires massive investment distribution requires a massive investment sin the systems and also in manpower Done#39’t think they can achieve that in three years but following thegovernment'’s decision to halt mallumasako'’s acquisition of ECB#39’s owner sand the management may have to go back to the drawing board to plot their next move towards additional capital Belladonna citizen business center
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