National Bank’s suspended CEO says he has resigned

Suspended National Bank of Kenya Managing Director Munir Sheikh Ahmed has resigned after being sent on compulsory leave.

Mr Ahmed revealed in an exclusive interview on Friday that he left the bank on April 13, a fortnight after he was suspended alongside five other senior executives pending an internal audit.

The CEO was sent home on the eve of the National Bank’s announcement of a surprise net loss of Sh1.15 billion for the period to December 2015, from a net profit of Sh2.25 billion in the nine months ended September 2015.

“I’ve exited. It was a sack. Suspension was a nice way of putting it,” he said.

National Bank declined to comment on this story and neither could the listed lender confirm the exit of Mr Ahmed by the time of going to press.

The bank, which made an after-tax profit of Sh871 million in 2014, blamed the record loss on a mounting volume of bad loans, for which it pointed the finger at its senior managers.

Mr Ahmed, however, said he is not to blame for the bank’s non-performing loan portfolio. All the loans, he explained, were approved by NBK board’s credit committee, which was responsible for the review of the quality and performance of the credit portfolio.

“All the loans were approved by the board credit committee as well as entire board. The ultimate responsibility lies with them. I didn’t make any decisions,” Mr Ahmed said yesterday in an interview.

The former CEO listed some of his achievements at the helm of the NBK as product diversification, cutting expenses to improve the bank’s cost income ratio, balance sheet growth and use of technology to improve operations.

The bank’s board of directors had on March 29, directed Mr Ahmed and five other managers to “immediately proceed on leave but will be expected to comply and make key submissions to the internal audit process”.

“The CBK welcomes these timely actions to strengthen the NBK, while maintaining smooth operations, and that will protect the financial system,” said Governor Patrick Njoroge in a statement following the board decision.

On April 11, Mr Ahmed presented himself to the Department of Criminal Investigations to record a statement on the happenings at the NBK.

Mr Ahmed took over as managing director at National Bank of Kenya on August 1, 2012, becoming the first boss of the majority State-owned lender to be competitively recruited.

His plan to grow NBK to a tier-one lender within five years was frustrated by the government’s refusal to take part in a rights issue to raise Sh10 billion to finance expansion and growth.

“The Treasury declined to give us support. This meant we couldn’t achieve the target I was given by the board,” he said.

This forced Mr Ahmed to turn to the sale of the banks buildings and a freeze on dividends to raise capital.