KCB has confirmed the departure of five more divisional directors under a reorganisation meant to create efficiency in the business, bringing to eight the number of senior executives who have left the company in the last fortnight.
The bank confirmed that Mary-Ann Musangi (marketing), Tony Githuku (IT), Caroline Kariuki (mortgages), Tim Kabiru (retail) and Stanley Towett (finance) opted to leave on voluntary retirement.
“The KCB board has agreed to release them with immediate effect from today,” said a statement issued by the bank’s chief executive Martin Oduor-Otieno on Friday evening.
The departures, together with those of Sam Kimani (deputy CEO, group controls), Catherine Njoroge (special projects) and Kepha Bosire (corporate communications) were reported exclusively by the Business Daily on Friday.
The directors who are leaving will get a send-off package of one and a half months salary for every year worked.
The bank also confirmed the appointment of Peter Munyiri, who was the group’s deputy chief executive in charge of group businesses, as the new chief business officer in Kenya.
KCB’s regional businesses will be led by James Agin, who was the regional director, under the title of chief business officer, international.
Mr Paul Tikani, who was director of operations, has been promoted to chief operating officer, leaving the position of the chief financial officer vacant.
The role was previously held by Stanley Towett, who was the director, finance.
The four appointees will combine the duties that were initially handled by 21 directors and mark the first line of senior management appointments.
“The bank will over the next fortnight make further announcements on the second level senior management roles in line with the new structure,” he said.
The reorganisation is a first step towards reducing the bank’s operational expenses following the recent hiring of global consultancy firm McKinsey & Company to lead the exercise.
In the next two years, KCB is expected to cut down on its middle level management staff, following other top banks like Barclays who have made similar moves after an aggressive hiring phase started in 2007 that was aimed at capturing market share.
“We intend to reduce our cost to income ratio to about 50 per cent in the next two years and this will be achieved by growth in income and reduction of costs,” Mr Oduor-Otieno said when the lean executive structure was unveiled.
The current re-structuring is expected to trim the bank’s executive team down to seven from 22 in a move that is expected to check staff costs that rose from Sh4 billion in 2006 to Sh9.3 billion last year, stifling profit growth.
This pushed its cost to income ratio to 67.9 per cent, only rivalled by Co-op Bank’s 80.7 per cent.
KCB has pursued an aggressive local and regional expansion in the past few years that saw it nearly double its staff count from 2,921 in 2007 to 5,639 last year.
KCB’s pay roll trimming is in line with that of other top banks that are coming off an aggressive hiring phase started in 2007 that was aimed at capturing market share.
Early this year, Barclays Bank laid off 200 middle level managers to cut payroll costs that grew to Sh8.3 billion last year from Sh7.2 billion the year before.
Slowed down
The exercise has saved Barclays — whose loan book shrank last year-— hundreds of millions of shillings in fixed expenses.
Equity and Co-op Bank have slowed down hiring, opting to spread out existing staff to meet their needs across the country.
Corporate segment focused Standard Chartered Bank has the lowest staff count (1554) and wage bill (Sh23.4 billion) among the top five banks.
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