KCB Group reconstitutes National Bank of Kenya board by axing 6 directors

KENYA – Kenya Commercial Bank Group (KCB) has sent home nearly the entire former board of National Bank of Kenya (NBK) in a reshuffle, weeks after formally acquiring the troubled lender.

Only Jones Nzomo and Linnet Mirehane have been retained on the NBK board that will be chaired by John Nyerere, a director in KCB Tanzania and the chairman of KCB Capital – the group’s investment banking arm.

The country’s largest bank has consequently tapped NSSF board of trustees chairman and ex-KDF boss Julius Karangi and Treasury’s acting director general in charge of public investments and portfolio management directorate Stanley Kamau to its board of directors.

KCB Group chief executive Joshua Oigara and NBK managing director Paul Russo have also joined the board. Other members are Jones M. Nzomo (director) and Linnet Mirehane (director).

The board shakeup means Central Organisation of Trade Unions (Cotu) secretary-general Francis Atwoli becomes the latest highest-ranking victim of the takeover after serving on the NBK board for 16 years.

Mr Atwoli joined the bank’s board in April 2003, where he represented workers’ interests in the bank, having been appointed to occupy one of the National Social Security Fund (NSSF’s) two positions on the board.

The new board members have been cleared by the Central Bank of Kenya. John Nyerere, currently a KCB board member will chair the new NBK board.

The new board completes governance changes which started with appointment of Paul Russo as NBK’s MD three weeks ago. The takeover is expected to give NBK a new lifeline as a business and fits well within KCB expansion strategy.

KCB had said it was using a two-year transition period to “streamline human resources, systems, processes and procedures” to realise efficiency and productivity synergies

KCB Group chairman Andrew Wambari Kairu said, “Corporate governance is of utmost priority for us and the structure of the board and management is important in ensuring that the level of corporate governance you expect is maintained.

“We must continue to strengthen and enhance our oversight and risk management practices, which are essential cogs in the banking sector to meet the expectations of our regulators, protect, and serve the interests of our stakeholders.”

The acquisition was promoted as a rescue deal aimed at pulling NBK out of its perennial low liquidity troubles. Under the deal, KCB bought NBK through a share swap of one KCB share for every 10 of NBK, joining a wave of consolidation in Kenya’s banking industry.

With the take-over, the group delisted NBK’s shares from the Nairobi bourse and says it plans to run the bank as a stand-alone subsidiary before integrating its operations within about two years of the acquisition.

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