By GEORGE NGIGI, gngigi@ke.nationmedia.com
In Summary
- Ronald Marambii was appointed in November to replace Anis Kaddouri, a Moroccan whose term expired.
- Mr Marambii previously served as managing director of BoA Uganda and deputy managing director in Ghana.
- He has been credited with cleaning up of bad loans and growing profits in the two countries he served.
Bank of Africa (BoA) has appointed Ronald Marambii
the first Kenyan holder of the managing director position as it seeks to
reverse falling profits.
Mr Marambii, a son of the late National Bank of Kenya CEO Reuben Marambii, was appointed in November to replace Anis Kaddouri, a Moroccan whose term expired.
The 45-year-old previously served as managing
director of BoA Uganda and deputy managing director in Ghana. He has
been credited with cleaning up of bad loans and growing profits in the
two countries he served. In Uganda, he turned around the unit from
losses to record profits last year.
“My appointment was on October 1 but I had to go
through the proper and fit testing by Central Bank of Kenya. I got my
certificate at the end of October so my term is effective beginning of
November,” said Mr Marambii.
In the nine months to September, Bank of Africa
posted a 45 per cent drop in profit attributed to expansion costs and
higher loan loss provisions. The bank reported an after-tax profit of
Sh155 million compared to Sh283 million recorded in a similar period
last year.
BoA’s loan book rose to Sh41.1 billion from Sh38.6
billion in June while customer savings grew to Sh42 billion from Sh41.3
billion three months earlier.
The bank has been transforming into a retail lender
a move that has seen it increase its branch network to 39 with six
outlets opened this year. It aims at 50 branches in the next three
years.
Mr Marambii said the branch expansion was yet to
reflect on higher deposit levels as the bank was at the same time
letting go off expensive deposits.
BoA reduced its shareholding in Uganda after it
failed to participate in a rights issue called earlier this year. The
dilution saw BoA’s shareholding in the Ugandan operation fall below 50
per cent resulting in the unit being demoted to an associate from a
subsidiary.
Mr Marambii said BoA’s decision not to participate
in the rights issue was in line with the group’s strategy of
consolidating ownership across subsidiaries under a holding company to
simplify its ownership structure.
Currently the Kenyan unit owns majority stakes in
Uganda and Tanzania and unwinding of those positions is expected to
boost the local unit’s capital position giving it muscle for aggressive
expansion.
Majority shareholders, BMCE Bank of Morocco, have
continued to show optimism in the Kenyan unit with additional capital
injection of Sh1.7 billion in the first half of the year accompanied by a
Sh1.3 billion subordinated loan.
BoA’s non-performing loans (NPL) have more than
doubled in the last year leading to South African rating agency GCR
according the bank a negative outlook. The bad book stood at Sh3.2
billion in September up from Sh1.3 billion.
Mr Marambii attributed the NPL growth to a clean-up exercise meant to ensure the bank had adequate cover against defaults.
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