Musau, six directors replaced after NBK buyout

At least seven top managers at the National Bank of Kenya #ticker:NBK including former CEO Wilfred Musau have been replaced in the wake of KCB Group #ticker:KCB acquisition of the lender.

The bank says the top managers left in the middle of turnaround efforts aimed at reverting the lender to profitability.

Mr Musau, appointed in October 2016 for a five-year period, was the biggest victim in the executive shake-up that followed the takeover of NBK.

Paul Russo was last September confirmed as the head of NBK and Mr Musau was offered a new role within KCB Group ahead of his exit.

Business Daily has established that director corporate banking Reuben Koech, director operations Paul Mureithi, director legal Habil Waswani, director information and communications technology Shadrack Kiamuko, director credit Stephen Gathongo and director Islamic banking Musa Adan have all left the lender in recent months.

Mr Russo confirmed that the exit of directors without giving details.

“They left on their own volition and mutual separation as part of the bank’s ongoing turnaround plan,” Mr Russo said.

The Business Daily was not able to obtain the exact details of Mr Musau’s exit terms based on his contract.

Mr Musau earned a total of Sh50.25 million in salary and allowances after his salary was increased by 4.56 percent in 2017.

The exits came in the middle of an audit on the bank’s loan approval process that had exposed NBK to a string of defaults, which had grown from Sh2.2 billion in 2012 to Sh32.4 billion at the June 2019.

The bank hired top lawyers to pursue the outstanding loans, marking its first step in reducing non-performing loans (NPLs) just weeks after KCB Group sealed the purchase of NBK in a share swap deal.

The bank’s NPLs ratio – a share of bad debts compared to total loans — stood at 68.8 percent in the nine months ended September last year compared to 47 percent in December 2018.