17.4 C
Nairobi
Thursday, February 22, 2024

Where And How To Play Online Casinos In Kenya

Advices on choosing licensed and trusted sites or apps only" Where and how to play online casinos in Kenya Throughout the past few years, the...
HomeceosPostbank Leadership, Losses Of Kes3 Million Per Day And Way Out

Postbank Leadership, Losses Of Kes3 Million Per Day And Way Out

Introduction

Kenya Post Office Savings Bank, often referred to as Postbank, is a Savings Bank in Kenya. Unlike other commercial banks in Kenya that are licensed and regulated by the Central Bank of Kenya, Postbank is regulated by the Kenya Post Office Savings Bank Act Cap 493B. The Bank’s mandate is, “To be the Premier Savings and Financial Services Bank providing quality banking and other financial services through innovations that build sustainable customer relationships and stakeholder value.” 

Loss

Postbank is making losses of Sh3 million a day, Sh90 million a month and over Sh1 billion a year. The bank is now eating into depositors’ and shareholders’ funds, and this could spell its death knell according to a memo by National Treasury.

National Treasury Direction 

The future of the bank is uncertain and bleak, with revelations that the bank management is yet to present an approved turnaround strategy to the National Treasury as directed earlier in their memo of January 2021. The National Treasury avers through their Permanent Secretary, Dr. Julius Muia, that over the years, the bank has been consistently posting a working capital of negative Sh15 billion. In 2016, the negative working capital was Sh9 billion and has been on a high traction by at least Sh1 billion every year, rendering the business unsustainable. 

Further Loss and Way Out

The bank spent Sh2.6 billion in administrative and operational costs against the projected Sh2.34 billion in revenue in the financial year ending June 2020. The National Treasury said in the memo that the bank’s 2021 budget approval was on condition the bank submit the plan for their consideration. The approved plan was to serve as a commitment by the Postbank board on actionable strategies and an assurance to the National Treasury that they are taking remedial measures to reverse the deteriorating bank financial performance. Postbank is expected to explain its cost efficiency and management plans, financial and operational restructuring as well as asset restructuring by way of unlocking the value of non-performing ones. 

Bailout 

Postbank is wholly owned by the government, hence may be bailed out as is the practice where liabilities of state agencies are defrayed by the exchequer but insider sources indicate that with the prevailing strain on the country’s coffers, a bailout may not be in the horizon, hence the bank has to focus on a growth strategy.

Leadership Switch

Postbank Leadership, Losses Of Kes3 Million Per Day And Way Out
Raphael Lekolool Is The Man At The Helm Of The Loss Making Entity Image/Courtesy

The bank appointed Raphael Lekolool as the new Managing Director effective June 1, 2020. This followed the retirement of Ann Karanja who had been at the helm of the state-owned savings bank for six years. Prior, there was Dr. Alice Koigi who had been at the helm for 9 years. The two, Anne and Alice rose through the ranks within to head the bank. 

On Lekolool’s joining the bank and to quote the bank Chairman Ntoros Baari Ole Senteu), 

 “With his vast experience in banking, microfinance and insurance sectors, Lekolool is well placed to drive the bank’s business to the next level while offering customer-driven products.”

Prior to this appointment, Lekolool was the Enterprise Risk manager at UAP, Old Mutual and Head of Internal Audit at Faulu Microfinance. He is an MBA graduate of Cardiff Business School and holds a BSc. Degree in Banking from University of Manchester.

Lekolool has served for one year in office and going by the hemorrhaging at the bank, would require the hand of God to turn around the tottering giant from the vice grip of an abyss.

 

Speak Your Mind

You cannot copy content of this page