THE AFRICAN BUSINESS FORTUNE MAGAZINE ISSUE #006 The African Business Fortune Magazine | Page 15

THE AFRICAN BUSINESS FORTUNE - BANKING

NBK’s CEO Munir Ahmed at a past event

fund (NSSF) and treasury, said gross
non-performing loans jumped 63 per
cent to Ksh11.76 billion, laying bare
the gravity of the bank’s financial
problems.
“The bank’s non-performing loan
portfolio increased sharply towards
the end of 2015 undoing gain of 3.3
billion shillings in profit before tax reported by the bank in quarter three of
2015,” the bank said in a statement.
Workers, through the National Social Security Fund (NSSF), are the
largest shareholders at National Bank
with 134.5 million shares or a 48.05
per cent stake.
National Bank reported its financial
results two days after its chief executive and five top managers had been
placed on compulsory leave pending
an internal audit.
The bank’s regulator Central Bank
of Kenya (CBK) welcomed the bold
move by the bank’s board that said its
actions were meant to strengthen the
lender while ensuring its operations
continued smoothly.

Over the last six months, two Kenyan
lenders, Imperial Bank and Dubai Bank
Kenya, were placed under statutory
management by the regulator last year,
causing central bank Governor Patrick
Njoroge to vow to tighten supervision of
banks.
The NSE-listed lender, which sold off
several assets last year to fund its business, closed the year with total assets
worth Sh125.4 billion while its total liabilities stood at Sh114.4 billion.
The shocking turn in fortunes for the
lender raises questions on the validity of
the bank’s books of accounts – coming
on the wake of close scrutiny presently
being necessitated by the new CBK boss
Patrick Njoroge.
NBK’s board sent its managing director Munir Sheikh Ahmed and five top
managers on compulsory leave pending investigations into alleged breach of
fiduciary duty and failure to adhere to
corporate governance rules.
The bank’s board did not recommend
the payment of any dividends for the financial year under review

“The six managers will immediately proceed on leave but will be expected to comply
and make key submissions to the internal audit process,” said the board in a statement.
The suspension comes at a time the bank
is battling claims of mismanagement and a
loose credit policy resulting in the ballooning
of bad loans, affecting its financial standing.
“We have instituted an internal review of
our financial performance and as part of the
mentioned tenets, the internal audit process
shall be independent hence the request by
the board for the six managers to proceed on
leave,” said the bank’s chairman, Mohamed
Hassan.
The announcements were made following a series of multi-pronged audits that the
Central Bank of Kenya (CBK) and the Capital
Markets Authority ordered and which found
massive gaps in the bank’s books.
The bank had re-appointed Deloitte &
Touche as its auditors during the last annual
general meeting held in March 2015.
The six suspended executives are now expected to present themselves for questioning
during the ongoing forensic audit.
“The aforementioned actions by the Board

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