FEATURED STORY

CEO Hints at Job Losses as NBK Shake-up Gathers Steam

Kenya Commercial Bank (KCB) Group CEO Joshua Oigara has allayed fears that the lender will sack a large number of people at National Bank of Kenya (NBK) following its recent acquisition, but stressed that employees who don’t perform will be shipped out.

Speaking during an interview on The Trading Bell on KTN last week, Mr Oigara said that the group has a well crafted strategy that makes it possible to retain all industrious employees.

“The perfomance of our staff is what will determine like anywhere else whether you remain in the organisation going forward,” said Mr Oigara.

“There is a big concern whether people are going to leave. I want to tell my staff that the fear that they are going to lose their job is unfounded,”

Oigara’s comments came after a recent shakeup of senior management that saw KCB insider Paul Russo appointed National Bank CEO and a total purge of the board that saw all previous board members including COTU Secretary General Francis Atwoli sent packing.

Bad Loans

The CEO also opened up on the Non-Performing Loans (NPLs) headache that the bank had to navigate before making the decision to acquire NBK.

“I must admit to you that one of our greatest challenges when acquiring national bank is that we have to put up mechanisms, plans to be able to resolve the recovery of those loans and bringing them back to performance,”

According to Oigara, the new NBK management inherited a 50% NPL level from its predecessor. The bank expects to bring that down to 20% next year and 8% the following year.

Read: KCB Lists More Shares after Acquiring National Bank

“NBK, like any other bank, has its fair share of customers who have not paid their loans therefore this is not a systemic problem,” said Oigara.

“Our experiences to recover those loans, our plan this year is that we have a special asset team which is very much knowledgeable, with capacity, who can be able to go after those loans, have a restructure and have a conversation with the owners. That it is what we will do with NBK,” he added.

Before the recent shakeup, National Bank was a troubled bank making headlines for all the wrong reasons. The bank’s previous managers were exposed putting depositors funds at risk by dishing out large loans to senior managers or companies associated with senior managers.

However, Oigara said everything is on track to resuscitate the bank and expects that NBK will reclaim its former glories.

“We are looking at writing new loans, getting new customers. NBK has 1 million customers of which 600,000 are very active. Our plan is to make sure that we double that number next year,” he added.