A Consolidated Bank branch in Nairobi. Photo/FILE
By WANGUI MAINA
In Summary
- The new executive will be charged with driving the bank’s expansion and privatisation plans.
The search for a new chief executive at
Consolidated Bank is concluding, with the company already having
shortlisted applicants for the position.
The successful candidate will replace the outgoing chief executive Ndegwa Wachira who leaves office in June.
Mr Wachira, who has served for three terms at the
State-owned bank, announced his retirement early this year having seen
the bank make a modest turnaround from loss-making in his decade-long
tenure.
“We just finished the interviews, the whole
process is going well and we got a good number of applicants both from
local and international institutions,” said Mr Wachira in an exit
interview with Business Daily.
He did not disclose how many people had been shortlisted or if any were from the bank.
The new executive will be charged with driving the
bank’s expansion and privatisation plans. Mr Wachira leaves office with
regrets that the bank has not been placed in private hands at a period
when the industry registered its fastest growth in history.
Mr Wachira said the bureaucracy of getting the
government to divest has slowed down the process he had hoped would have
been completed before the end of his tenure.
Recently, the bank’s top executives held a meeting to discuss the privatisation plans.
“It will happen in the next two years. I’d targeted to do it before I left but it didn’t happen,” he said.
The Treasury has previously floated plans to
privatise the lender either through an initial public offering (IPO) or
sale to a strategic investor.
The board leaned towards listing on the Nairobi
Securities Exchange as the preferred method of privatisation. In 2011,
the bank cleared its accumulated losses clearing the way for a listing
at the NSE.
Despite being profitable since 2007, the bank
relied on ploughing back of profits to clear its accumulated losses
which stood at Sh576 million six years ago. Last year, it reported a
profit of Sh175.9 million.
To maintain its growth momentum, the bank needs
capital injection but its ownership structure has seen it remain in a
limbo for a period now.
The bank has resorted to the fixed-income market
to raise capital in the absence of new cash injection. In June last
year, it issued a bond where it raised Sh1.7 billion out of a targeted
Sh2 billion. The money was raised to boost the bank’s lending capac
However, this does not seem to have cushioned it from reporting a dip in profit in the first quarter of this year.
The bank recorded an 89 per cent drop in net profit to Sh5.65 million in the first quarter of 2013.
Consolidated Bank was formed in 1989, at the
tail-end of Kenya’s first-ever contagious bank failure. It merged nine
insolvent indigenous banks in an effort by the government to salvage
public deposits. However, some of the bank owners have contested the
takeover saying they were not adequately compensated. It mainly finances
small and medium-sized enterprises and has 17 branches.
Mr Wachira, who came to office after former
President Mwai Kibaki came to power, leaves the bank after surviving
attempts to remove him from the helm.
Mr Wachira, a holder of a Master’s degree in
economics and business management and a diploma in finance and banking,
joined Consolidated Bank in December 2003.
pmai
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