CBK lauds National Bank for sending top managers on forced leave

CBK lauds National Bank for sending top managers on forced leave

The Central Bank of Kenya has welcomed the move by the National Bank of Kenya board to carry out an internal audit of the performance of the bank.

The board on Tuesday sent six senior managers including the CEO Munir Ahmed on compulsory leave pending an investigation into their performance following a meeting with the regulator.

The CBK considers the actions taken as timely in the effort of protecting the financial system.

“The CBK welcomes these timely actions to strengthen NBK while maintain smooth operations and that will protect the financial system,” the regulator said.

Neither the bank nor the CBK gave reasons for the internal audit and the suspension of the six managers, but it is believed to be linked to corporate governance.

“The aforementioned actions by the Board are an unequivocal demonstration of our commitment to strict adherence to corporate governance tenets and the various Central Bank of Kenya guidelines,” National Bank chairman Mohamed Hassan said.

Those sentiments come in the wake of two banks being placed under receivership in 2015.

In August Dubai Bank was placed under receivership after experiencing liquidity and capital deficiencies, which raised concerns with CBK that it would have been unable to meet its financial obligations.

Two months later, Imperial Bank was also placed under receivership in what has now emerged as a Sh38 billion fraud scheme being carried out at the bank. In this case, it was the bank’s board that also raised the matter with the regulator

The CBK has been strengthening its banking supervisor role to protect and preserve the financial system.

Wilfred Musau who joined the bank six months ago as the head of premium and retail banking, has been appointed as the interim CEO.

The National Bank is expected to appoint replacements for the suspended managers on Wednesday.

The bank posted a third quarter pretax profit of Sh3.2 billion and is expected to announce its full year results this week.