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NBK boss's pay rises to Sh50m as woes deepen

Wilfred Musau
National Bank CEO Wilfred Musau. FILE PHOTO | NMG 

National Bank of Kenya (NBK) #ticker:NBK chief executive Wilfred Musau earned a total of Sh50.25 million in the year ended December 2018, representing a 4.56 per cent pay rise from the previous year.

Mr Musau was paid Sh48 million in the year ended December 2017, according the bank’s annual report.

The executive’s pay last year comprised a salary of Sh41.49 million or Sh3.45 million per month, up from Sh39.3 million or Sh3.2 million per month the previous year and expense allowances of Sh8.7 million, same as the previous year.

The higher pay recorded last year represents a figure seven times the troubled NSE-listed bank’s profit in the period under review.

The lender’s net earnings decreased by 98 per cent from Sh410 million in the year ended December, 2017 to Sh7 million in 2018 on the back of reduced interest income, increased loan impairment and voluntary early retirement costs.

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NBK has in the recent past registered a series of poor performances that has put into question the fate of its survival.

The lender is in the grip of an operational crisis, stuck in a negative liquidity position as at the end of the 12 months to December, 2018.

Central Bank of Kenya (CBK) Governor Patrick Njoroge recently linked the bank’s poor performance to mismanagement, political interference and a poor business model.

It has been relying on regulatory forbearance to continue operating after lack of funding, losses and mismanagement in previous years eroded its capital base.

KCB Group #ticker:KCB, Kenya’s biggest bank, has offered to take over the ailing institution through a share swap deal.

Separately, NBK has urged the High Court to dismiss a suit filed by two people who have sought to stop the takeover of the lender by KCB. Arguing before Justice Weldon Korir Thursday, the bank through Senior Counsel George Oraro said the petition was a complete misrepresentation of facts because the bank was not a parastatal. He said NBK was not a public entity but subject to Capital Markets Authority Act and approval from the CBK.

According to Mr Oraro, there was no urgency as alleged by Evans Aseto and John Kiptoo and argued that the petition should be struck out.

He further said the two were neither shareholders at NBK nor depositors, so they do not have the capacity to sue.

Justice Korir declined to grant any orders stopping the planned takeover and instead directed the parties to file their replies and submissions ahead of the hearing on June 26.

Mr Aseto and Mr Kiptoo filed the case arguing that the acquisition is being conducted in an opaque manner, and information concerning the move was intentionally scanty.

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