, NAIROBI, Kenya, Mar 30 – The Central Bank of Kenya (CBK) has supported the decision by the National Bank of Kenya board to suspend its top officials over accusations of gross mismanagement, amid issuance of a profit warning by NBK.
CBK says this was timely and necessary especially after the bank’s board raised concerns about misconduct.
“The CBK welcomes these timely actions to strengthen the NBK while maintaining smooth operations, and that will protect the financial system,” CBK says.
On Tuesday the NBK board suspended six top bank officials over mismanagement and questionable transactions including CEO Munir Ahmed.
The six have been faced with numerous accusations including illegal loan disbursements, high number of staff turnover and audit-related queries.
“CBK had a meeting with the NBK Chairman and some of the board members. The NBK Board members briefed the CBK on the emergent concerns and their proposed actions going forward,” the regulator said after the suspension.
In the interim, Wilfred Musau is now the acting CEO, who will take over the running of the daily operations of the bank with immediate effect.
Ahmed was hired in August 2012 to spearhead reforms in the then ailing bank and make it a more profitable lender. But in the recent times, the bank has been in the spotlight especially over staff exits under its five-year transformation strategy meant to elevate the lender to a top-tier bank by 2017.
The suspensions came as the bank issued a profit warning for the 2015 full year ending December 31. This has been attributed to rise in non-performing loans and lack of sale of one of the bank’s assets, which had been put in the income estimates.
“NBK’s earnings for the year ended December 31, 2015 will be at least 25 per cent lower than reported in the year ended December 31, 2014,” the bank said in a statement through the Nairobi Securities Exchange (NSE).
In 2014 full year performance the bank recorded a 34 percent increase Sh2.43 billion in 2014 full year pre-tax profit from Sh1.81billion posted over a similar period in 2013.