Executive turnover dims Equity CFO hunt, say analysts

Equity Bank CEO James Mwangi (centre) with Mr Samson Oduor (right), former chief financial officer, and Mr Julius Kipng’etich, the COO, at a past event. FILE 

By Neville Otuki

In Summary

• High volatility of the docket may discourage outsiders from applying for the position.

Equity Bank could struggle to hire a chief financial officer outside its ranks following a high turnover of executives handling the job over the past two years, analysts say.

Investment analysts Renaissance Capital and Standard Investment Bank (SIB) reckon that the replacement of CFOs in quick succession may discourage outsiders from the top job.

The bank is expected to begin the search for its fifth CFO since 2010 after Samson Oduor left the lender in March. He had served for about six months.

The bank failed to respond to the Business Daily’s questions on reasons to Mr Oduor’s exit, but Renaissance Capital says the lender’s management informed it that the CFO “was not the right fit for the role.”

“We see this departure as negative for sentiment. We concede there have been too many resignations in this role over the past few years,” said Renaissance Capital in a brief to its clients.

“We do think, however, this will become an increasingly difficult position to fill externally — the Kenyan market for CFOs is limited and the rate of turnover will make it difficult to attract top talent, in our view.”

Similar comments were echoed by SIB about the bank, which is among the most sought after counters at the Nairobi bourse by foreign investors.

The exit of Mr Oduor makes the top finance job at Equity Bank the most volatile. Before Mr Oduor, the finance docket was handled by Paul Njaga (2012), Edwin Mucai (2011) and Allan Mwangi (2010).

Though Equity has consistently recruited top-notch professionals in the past five years, it has not been as successful in retaining them.

(Read: Fourth Equity Bank CFO quits lender in 2 years)

Mr Oduor joined the bank from Ecobank Transnational last October in the wake of a major shake-up of the bank’s management team. At Ecobank, he served as the chief financial officer.

“We do not think the departure had anything to with the numbers or disclosures but rather reflects the challenges, as a newcomer, of working with a hands-on CEO and a long established senior management team,” said Renaissance Capital.

Mr James Mwangi has presided over one of corporate Kenya’s most dramatic transformations that saw the building society turn into a full-fledged bank, list on the Nairobi Securities Exchange and break into the league of top lenders within seven years.

These successes have seen Mr Mwangi become the face of the bank with a personality that has sometimes overshadowed the institution, leading to frequent claims that Equity has no room for other stars to shine.

Mid last year, three senior executives that Equity had recruited in 2011 from international institutions quit in succession.


 The three — Mr Njaga, American Maurice Ewing (chief risk officer) and Daniel Odongo (head of corporate risk) — joined the bank in the third quarter of 2011 from top notch global institutions such as the Bank of America, Standard Chartered and Microsoft.