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KCB plays it safe, picks insider Paul Russo to succeed Oigara

BUSINESS
By Dominic Omondi | May 25th 2022 | 3 min read
By Dominic Omondi | May 25th 2022
BUSINESS

New KCB Group CEO Paul Russo speaks in a past fucntion. [Boniface Okendo, Standard]

National Bank of Kenya (NBK) Chief Executive Paul Russo will from today replace Joshua Oigara as the KCB Group boss.

This brings to an end Oigara’s 10-year tenure at the Nairobi Securities Exchange-listed bank.

“The board acknowledges Joshua’s immense contribution in driving the growth of the group’s business over the decade. He has been instrumental in deepening financial inclusion and social impact across East Africa,” said KCB chairman Andrew Kairu in a public announcement yesterday.

The changes at the top of the region’s second-largest bank in asset size come at a time when it has stepped up plans to grow its balance sheet, having recently acquired Banque Populaire du Rwanda and NBK earlier.

The board said Mr Oigara — who still had seven months to his contract — will remain around to help with the transition. “The board acknowledges Joshua’s role in positioning the group as a leading financial institution in the region and wishes him well in his future endeavours.”

Although the board indicated that Mr Oigara’s term in office had ended, following the lapse of his term, information in the lender’s annual report for 2021 indicates that Oigara’s contract was to end on December 22 with a termination notice of three months.

His term was to end in December last year but was extended by another year as the board shopped around for a suitable replacement for the 47-year-old.

In a yet-to-be-aired interview on the premiere show, The Head Hunter, on KTN Home, Mr Russo was asked whether he would be the next chief executive of KCB Group but said he preferred not to discuss the issue.

And although it is no longer the most profitable bank in the region, with the prize going to Equity Group, KCB has kept up its impressive performance.

The lender’s profitability has consistently grown except in 2020 as the world grappled with the Covid-19 pandemic.

KCB made a profit of Sh34.2 billion in 2021, making it the second most profitable bank in the country behind Equity Bank. Mr Oigara exits the stage, having overseen several innovations at the bank, including the KCB M-Pesa, a mobile platform for borrowing and saving.

Despite the success of KCB M-Pesa, the lender and Safaricom’s joint venture on Pepea, a card that allowed commuters to load cash and pay for their bus fare, flopped. 

“We put in a lot of money there. We spent between Sh200 million and Sh300 million on the business. It failed,” said Mr Oigara in an earlier interview with Financial Standard.

KCB was also dealt a blow after the High Court rejected its appointed receiver-manager to manage the assets of bankrupt Mumias Sugar, which owes the lender close to Sh1.5 billion.

The bank is reported to have spent close to Sh300 million to just preserve those assets.

In the interview with Financial Standard, Mr Oigara described as “foolish” his decision to go public on his worth. “I call it a foolish action because we then remained the only two people (with the late Safaricom CEO Bob Collymore) who were willing to stand firm, and the conversation then changed.”

On December 8, 2015, the late Collymore made a public declaration of what he owned and had earned that year. Mr Oigara, who was a close friend of his and a member of the “Boys Club,” followed suit.

At the time, Mr Oigara put his net worth at Sh220 million. He valued his assets at Sh350 million and loan obligations at Sh130 million.

The assets, he said, were in the form of land, buildings, motor vehicles, cash bank balances and shares. Last year, Oigara took home Sh368.5 million, translating into a monthly paycheck of Sh30.5 million.

His successor, Mr Russo, will not only be expected to maintain KCB’s momentum in a highly competitive and digitised environment but also to propel the bank to the top of the banking log.

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