Consolidated Bank in first search for CEO after decade

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.

READ: Consolidated Bank CEO retires in June

“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.

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