Default rates were particularly worse at its subsidiary National Bank of Kenya (NBK) at 24.5 percent, and KCB Bank Kenya at 19.8 per cent.
Mr Russo says he has initiated a restructuring of the business to accelerate recoveries and improve the group’s asset quality.
“Relationship teams are designed to grow business, they are not necessarily competent in matters regarding recoveries, restructuring and nursing struggling borrowers,” Mr Russo said.
“Also, they are conflicted because they were involved in building the relations and are, therefore, not able to make tough calls on recoveries. So, I have separated these two teams and created a special assets team reporting directly to me.”
The team is mandated to chase recoveries to the tune of Sh120 billion across the group constituting legacy debt from NBK, government agencies whose loan facilities have been downgraded and corporate entities that have been placed under receivership.
Mr Russo says KCB has also de-coupled the roles of Group CEO and Managing Director Kenya in a bid to infuse more impetus into the Kenya business.
In the first half of 2022 subsidiaries outside Kenya accounted for 27 percent of KCB Group’s Sh1.21 trillion asset base, up from 24 percent in the similar period in 2021.
“I am passionate about separating the role of the group and subsidiaries. So, I split the Group CEO and managing director Kenya role because you have got to hold KCB Kenya, which is a critical entity, to account like any other business,” Mr Russo said.
