Treasury Cabinet Secretary John Mbadi has secured his choice to lead Consolidated Bank of Kenya after staging a boardroom coup in a row that entangled the regulator.
The bank announced on Friday that Dominic Murage, a lecturer at the University of Nairobi, would serve as the interim CEO of the State-backed bank.
Mr Mbadi backed Dr Murage's appointment after rejecting the board's recommendation to offer the lender's Chief Executive, Sam Muturi, a second term from October 11.
Before tapping Mr Muturi's replacement, on October 8, Treasury CS fired three directors of the incomplete board on October 3 after the directors insisted on Mr Muturi's second term and rejected Mr Mbadi's push for the recruitment of a new CEO.
Mr Mbadi advised the remaining two of the seven-member board to hire Dr Murage, forcing Mr Muturi to petition the court for his reinstatement or compensation of Sh76 million, as the Central Bank of Kenya (CBK) faulted the initial hiring of the lecturer.
“The board of directors of Consolidated Bank of Kenya Limited is pleased to announce the appointment of Dr Dominic Murage as the acting Chief Executive Officer, effective October 12, 2025,” said Consolidated Bank in a notice issued on Friday.
“Following his appointment, the requisite regulatory vetting process was undertaken by the Central Bank of Kenya, culminating in formal approval and clearance.”
Dr Murage’s appointment in October came days after he stepped down from the race for the hotly contested Mbeere North constituency by-election set for November 27 in favour of the UDA candidate.
However, his appointment landed Consolidated Bank in trouble after the CBK said the lender had breached its rules, which demand executives pass a fit and proper test before their appointment.
CBK noted that Dr Murage was yet to be vetted by the banking regulator.
Dr Murage's hire came as his brother and another contestant for the Mbeere North seat, Charles Njagagua, was removed as chair of Consolidated Bank and is said to work as an adviser to President William Ruto.
Mr Njagagua also stepped down for the UDA candidate in a seat that President Ruto's party won in a close fight with a candidate fronted by his impeached Deputy President, Rigathi Gachagua.
Consolidated Bank's board, in a letter to Mr Mbadi in March, pushed for Mr Muturi to be offered a second term on the strength that he had delivered the bank's first profit in 15 years.
But Mr Mbadi in September rejected the bid to renew Mr Muturi's term, arguing that the board should begin the process of hiring a new CEO.
In a meeting held in September, four of the six directors opted to challenge the Cabinet Secretary's decision and insisted on Mr Muturi. The former chair, Mr Njagagua, and Treasury's representative, Jane Njogu, sided with the State.
However, on the same date, Mr Njagagua terminated Mr Muturi's contract, before the board's resolution was communicated to the Cabinet Secretary.
In a letter dated 17 September, Mr Mbadi acknowledged receiving a letter signed by four directors requesting extension of the CEO's contract, but insisted on ending Mr Muturi's term.
On October 3, the minister revoked the appointment of three of the four directors, who had signed the letter, save for Florence Oluoch, who was appointed in November 2024.
President Ruto revoked Mr Njagagua's chairmanship on the same day, leaving the bank without a substantive board.
Dr Murage's appointment comes after the court declined former CEO Muturi's prayer for reinstatement.
He argued that Mr Mbadi usurped the powers of the board in picking a new CEO against the directors' verdict to renew his contract.
Consolidated Bank has been struggling with leadership gaps, with more than half of its top management–six of 11–serving in acting capacity, denying them full authority to execute their roles.
Mr Muturi had banked on a fresh term after the lender posted a profit of Sh12 million for the six months ended June, up from a Sh84 million loss.
Its capital levels remained below statutory requirements.
The lender reduced its staff costs in the six-month period by Sh5 million to Sh349 million, with management forced to look at cost-cutting to spur growth as the government continued to withhold its support despite persistent calls for cash injection.
Consolidated Bank has been in the red for the last nine years, with losses wiping out its core capital to negative Sh731 million.
Its accumulated losses stood at Sh4.4 billion, with the lender in breach of all CBK's capital parameters.
The bank's core capital to total deposit liabilities ratio is at negative 5.8 percent against a mandatory eight percent while its total capital to total risk weighted assets is at negative 6.1 percent against a statutory 14.5 percent.
The National Treasury, which owns 93.5 percent of the bank, has failed to heed pleas to inject cash into the lender for the last 12 years.
