The bank has informed the Capital Markets Authority (CMA) that Munir Ahmed will assume the role of managing director on August 1—a pointer that Mr Marambii could proceed on leave in the last quarter of the year pending his retirement in December.
Mr Munir has worked at Standard Chartered Bank for the last 16 years, mainly in South Africa, where he was director in charge of regional transaction banking for Africa’s operation. His appointment signals that the bank is keen to diversify from consumer lending, which accounts for 85 per cent of its loan book, to corporate lending, investing banking and insurance to support its future growth.
It also marks the first time the government role in appointing the head of NBK was diminished since the board—which is in the firm grip of National Social Security Fund (NSSF)— shepherded the search and made the final appointment of the MD without seeking the blessings of the Treasury.
‘‘Mr Munir Sheikh Ahmed has been appointed by the board as the managing director of NBK,” said a notice to the CMA signed by Mr Marambii.
“Mr Munir brings with him some rich banking experience from the Standard Chartered Bank. He will take up his duties effective 1/08/2012,” added the notice. The bank signalled its intention to hire expatriates and Kenyans in the diaspora after it placed the job search advertisement in the latest edition of The Economist magazine.
The bank relies heavily on consumer lending that has seen its rivals like Co-operative and Equity banks race ahead of it in recent years Banks such as Equity have tapped Kenyans in the diaspora in the race for a larger share of the corporate lending market that is dominated by big banks like Barclays, Kenya Commercial Bank and Standard Chartered.
Hiring Kenyans in diaspora
Last year, Daniel Odong’o joined Equity as head of corporate risk from Bank of America, while Henry Kimani, from Standard Chartered Bank (South Africa) was hired as general manager for corporate banking. It also hired Paul Njaga from BNP Paribas as finance director.
The hiring of executives from international banks is in line with its plan to replicate their business model in what could raise the stakes in the lending market.
Human capital has become the most sought-after resource for market share growth in the local banking industry in which business ideas are being copied with speed, sparking a talent war.
NBK— ranked Kenya’s eighth largest bank by asset size— is also seeking to lend more to companies and big projects in the property market to grow its loans book and push it to the top tier of the country’s banking sector. In the three months to March, the bank made before tax profit of Sh486 million compared to Sh467 million a year earlier—which pales in comparison to quarter three performance of its peers like NIC Bank (Sh1.03bn) and DTB (1.33bn).
Its share has lost 41 per cent in the past year to drop to Sh19.85 on the bearish run at the Nairobi Securities Exchange (NSE) and the below analysts performance.
For decades, the State has leveraged on the NSSF shareholding to push its agenda in NBK. There is no recent precedent on the appointment of the head of NBK—whose boss used to be hired with the blessing of the former President Moi. Treasury owns 22.5 per cent and NSSF has a 48.05 per cent stake in the bank.
Mr Marambii took the helm in 1998 from John Simba —who was executive chairman — with the approval of the then Finance minister Simeon Nyachae to turn around the bank that was on the brink of collapse under the weight of bad debts.
Mr Marambii was tapped from Central Bank of Kenya where he was the chief manager of banking and was instrumental in returning NBK to the profit territory, which culminated in the bank paying its first dividend in 12 years in 2010.
This time round, the NSSF was keen to flex its muscle in picking Mr Marambi’s successor having gained higher representation in the bank’s board after toppling government appointees last year.
It replaced Jennifer Riria, Paul Ngumi and Alfred Juma—all government appointees—with Mohammed Hassan (now chairman), Sylvia Kitonga and Erastus Mwongera.
Other NSSF directors sitting on the bank’s board are Francis Atwoli (Cotu boss) and NSSF managing trustee, Alex Kazongo, giving the fund five of the bank’s eight voting rights.
