Oduor-Otieno to exit corner office at Kencom

Dr Oduor-Otieno’s  is set to leave KCB

 

By James Anyanzwa and Njiraini Muchira

One of Kenya’s celebrated chief executives is set to exit the scene, even as questions arise on whether the silent cold war within the Board could have pushed him out.

Dr Martin Oduor-Otieno, Kenya Commercial Bank (KCB) chief executive officer, is preparing to bow out of Kenya’s largest bank by assets, profits and branch network that he played a significant role is moulding over a span of eight years.

Dr Oduor-Otieno, who together with Equity Bank’s James Mwangi, Barclays Bank’s Adan Mohamed, Standard Chartered Bank Richard Etemesi and Cooperative Bank of Kenya Gideon Muriuki, have in recent years come to represent the face of banking industry, is expected to exit the corner office in April next year after the expiry of his second two-year term.

His contract had been extended by two more years effective May 1, 2011 to 2013 after the end of his first four-year term.

But as he prepares to exit the scene, questions are emerging as to whether Dr Oduor-Otieno is himself a victim of the often frosty relations at KCB’s board and whether he might have been consumed by the highly divisive restructuring programme he engineered, and one that saw the exit of his former deputies Sam Kimani and Peter Munyiri among other top managers.

Kimani is now the chief executive of Jamii Bora Bank while Munyiri is now heading Family Bank.

According to insiders at KCB, Dr Oduor-Otieno relationship with the board, particularly during the time of former Chairman Peter Muthoka was a love-hate affair, something that at times bordered on the board micro-managing the bank to the detriment of the CEO.

But being a man who had mastered the art of not emitting emotions, Dr Oduor-Otieno never projected any disagreements within the board even when it was clear the board was overbearing in some of the strategic decisions implemented by the bank in its quest to become a ‘Pan-African Bank’.

One such strategic move was the internally acrimonious transformation agenda started in 2011. Though it was packaged as a move to lay the foundation to leverage talent, optimise subsidiaries, profitably grow the Kenyan business and develop best-in-class enabling processes, the restructuring also left a bitter pill in the months of many.

Despite rubbing some the wrong way, Dr Oduor-Otieno has been instrumental in transforming KCB from a former industry laggard to a leading commercial bank in the country, albeit driven by greed— considering it was among the banks accused by Parliamentary committee of causing the near collapse of the shilling last year.    KCB has gone through a successful turnaround strategy that has seen it stop making losses to posting double-digit growth in net profit after posting a net loss of Sh4.1 billion in 2002/03 financial year weighed down by huge chunk of non-performing assets.

Dr Oduor-Otieno’s appointment as KCB’s boss came as the high point of an eventful career that saw him leave the private sector for a stint in the public service as part of the Dr Richard Leakey led Dream Team.

He later returned to banking with Barclays Bank then later replaced the highly rated Terry Davidson, in 2007 after having served as Davidson’s deputy for two years. While Davidson was busy turning around the bank and managing day to day business, Dr Oduor-Otieno focused on strategy to move ahead.

This was critical considering that at some point the bank’s future appeared grim to investors due to huge chunk of assets in non-performing loans.

KCB hit rock bottom between 2000 and 2002 and posted a loss of Sh4.1billion in the 2002/2003 financial year. The bank’s shares had, until 2004, historically underperformed most other publicly listed banks.

And even though the bank made “super-profits”, it turned out that the loans made to ill-advised ventures, politically connected individuals and companies were actually non-performing and were thus written off by the new management in subsequent years. The provisioning and write-offs of these loans severely affected KCB’s capital base.

However KCB’s loss making streak came to a halt in 2002 after the bank recorded Sh877 million in pre-tax profits, climbing steadily by   22 per cent to Sh1.1 billion in 2003. The bank broke its dividend spell by approving the first payment of a Sh1 million per share and embarked on a regional expansion program that has seen it venture into Uganda, Tanzania, Rwanda, Burundi and South Sudan.