This archive report was first published on 11 September 2019.
On September 11, 2019, the Competition Authority of Kenya (CAK) issued a directive to the Kenya Commercial Bank Group (KCB) to retain at least 90% of National Bank of Kenya (NBK) employees for the next one-and-a-half years following the buyout.
The move aims to protect the jobs of NBK employees, who had been threatened with termination by KCB after the takeover. KCB had planned to eliminate some branches and terminate the contracts of 'excess' staff, starting from the top.
According to KCB CEO Joshua Oigara, the bank had no intention of keeping the NBK board or management, stating, 'The board has looked at the risk and what is the risk profile. The board does not intend to keep the management of NBK. The board has no intention of keeping the NBK board. There is no (such) intention.'
However, despite Oigara's statement, KCB had already started making changes to the NBK management, appointing Paul Russo as the MD designate for NBK during the two-year transitional period.
The CAK's directive means that KCB will have to retain a significant portion of NBK's workforce of about 1,356 employees, in addition to its own 4,835 employees in Kenya. This brings the total staff count of the merger to 6,191 employees, with KCB still able to lay off 619 workers.
The CAK approved the buyout partly because KCB will be in a position to support NBK, whose performance has deteriorated over the years, with the lender breaching the minimum capital adequacy ratios.
