Bank of Africa taps Marambii son as its first Kenyan head

New Bank of Africa managing director Ronald Marambii. PHOTO | FILE
New Bank of Africa managing director Ronald Marambii. PHOTO | FILE 

Bank of Africa (BoA) has appointed Ronald Marambii the first Kenyan holder of the managing director position as it seeks to reverse falling profits.

Mr Marambii, a son of the late National Bank of Kenya CEO Reuben Marambii, was appointed in November to replace Anis Kaddouri, a Moroccan whose term expired.

The 45-year-old previously served as managing director of BoA Uganda and deputy managing director in Ghana. He has been credited with cleaning up of bad loans and growing profits in the two countries he served. In Uganda, he turned around the unit from losses to record profits last year.

“My appointment was on October 1 but I had to go through the proper and fit testing by Central Bank of Kenya. I got my certificate at the end of October so my term is effective beginning of November,” said Mr Marambii.

In the nine months to September, Bank of Africa posted a 45 per cent drop in profit attributed to expansion costs and higher loan loss provisions. The bank reported an after-tax profit of Sh155 million compared to Sh283 million recorded in a similar period last year.

BoA’s loan book rose to Sh41.1 billion from Sh38.6 billion in June while customer savings grew to Sh42 billion from Sh41.3 billion three months earlier.

The bank has been transforming into a retail lender a move that has seen it increase its branch network to 39 with six outlets opened this year. It aims at 50 branches in the next three years.

Mr Marambii said the branch expansion was yet to reflect on higher deposit levels as the bank was at the same time letting go off expensive deposits.

BoA reduced its shareholding in Uganda after it failed to participate in a rights issue called earlier this year. The dilution saw BoA’s shareholding in the Ugandan operation fall below 50 per cent resulting in the unit being demoted to an associate from a subsidiary.

Mr Marambii said BoA’s decision not to participate in the rights issue was in line with the group’s strategy of consolidating ownership across subsidiaries under a holding company to simplify its ownership structure.

Currently the Kenyan unit owns majority stakes in Uganda and Tanzania and unwinding of those positions is expected to boost the local unit’s capital position giving it muscle for aggressive expansion.

Majority shareholders, BMCE Bank of Morocco, have continued to show optimism in the Kenyan unit with additional capital injection of Sh1.7 billion in the first half of the year accompanied by a Sh1.3 billion subordinated loan.

BoA’s non-performing loans (NPL) have more than doubled in the last year leading to South African rating agency GCR according the bank a negative outlook. The bad book stood at Sh3.2 billion in September up from Sh1.3 billion.

Mr Marambii attributed the NPL growth to a clean-up exercise meant to ensure the bank had adequate cover against defaults.