National Bank Scandals: Bad Debts Threaten Lender

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3 years ago

November 21, 2018

Kenyan Digest

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The Kenyan Digest has received reports that the Joker at the Central Bank of Kenya refused to sign Q3 Accounts last week but was hoodwinked into signing them as a crisis looms at the once great bank.

By the time of going to press, we had confirmed that the National Bank is yet to receive a Ksh 4 Billion bailouts that they expected because of a corrupt management that may squander the cash.

The Lender, which is now sinking dangerously like the Titanic is struggling with bad debts amounting to more than Ksh 30.1 billion, most of it which it has started to write off for “non-recovery”, Kenyan Digest has learnt.

CBK Patrick Njoroge

It has however remained a mystery as to why the Central Bank of Kenya continues to allow the bank to operate despite the red lines like that Imperial Bank of Kenya showed before sinking. A few months ago, various media outlets reported that the bank, Under Kenya’s youngest CEO Wilfred Musau had gone red on various set ratios.

The share price of the ailing lender has dropped from Ksh 9.15 to Ksh 4.95 this year when there were rumours that the Kenya Commercial Bank was planning to buy it, reports that could not be independently verified.

An expert that we spoke to but was not ready to be quoted had this to say:

“The bank’s capital has gone down by 83 per cent, from Ksh10.1 billion to Ksh1.7 billion. The current capital is only Ksh738 million, against the CBK statutory minimum of Ksh1 billion. The bank has a core capital to total deposits ratio of 1.8 per cent against the statutory minimum of 8 per cent. The core capital to total risk-weighted assets ratio is at 2 per cent against the minimum 10.5 per cent. This is not a bank but a collapsing ship” The expert intimidated

To play with Kenyans minds, the ill-fated bank’s management started wooing depositors with savings plan despite the fact they are struggling to carry out normal RTGS transactions which are delayed in the bank for more than 3 weeks at times till it reflects at the correspondent bank. It is this way as they have to wait for collections at end month then settle large outstanding transactions. It is obvious that the looting did not stop with the exit of Munir Ahmed, the crook that bought his way out.

NBK CEO Wilfred Musau.

In March 2018, the bank lost an opportunity to onboard a $50m placement credit line from a correspondent bank due to the unsatisfactory response to the sexual harassment allegations which appeared in the Business Daily against the “Hands-On CEO”.

We can confirm that the bailout which they are now expecting is yet to hit the lender’s accounts due to disagreements between themselves, top shareholders, National Social Security Fund and the National Treasury.