BY NJIRAINI MUCHIRA

When Rueben Marambii, the National Bank of Kenya (NBK) managing director, took to the podium last Monday to announce the bank’s full year results for 2011, he must have felt a mixture of contentment and discontent.

The fact that his last annual ritual at the helm of NBK was to announce a profit decline for the bank that he has been instrumental in rescuing from the jaws of collapse and turned it around was a denting culmination of his career at the bank.

This was particularly depressing considering that NBK’s 9.4 per cent drop in pre-tax profits to Sh2.44 billion last year compared to Sh2.69 billion in 2010 came against the backdrop of other banks making astronomical profits.

Yet despite the over obvious dent that the drop impacted on his illustrious career at NBK, Marambii was ecstatic that he will be walking out of the bank at a time when it’s in a strong position and prospects for growth are enormous.

"All indicators show last year was not as good as 2010 but we expect our results this year to be better because taxation issues are not likely to recur and provisions for bad debts are under control," he told investors.

For Marambii, who is currently serving his last days at NBK, the last 13 years at the helm of NBK have been a walk in the park.

Re-assignment

When he was plucked out of the Central Bank of Kenya where he was the chief manager of banking and posted to NBK in 1999, Marambii must have rued settling on banking as a career.

Back then, NBK was practically in the league of suffering parastatals that had literally been bleed to its knees by powerbrokers in the Kanu regime.

Here was a bank where individuals with connections with the powers that were would apply for loans amounting to millions of shillings and blatantly refuse to repay.

In effect, NBK infamously became synonymous with a ballooning book of bad debts and non-performing loans but escaped the plague of collapse that had invaded the banking industry in the 1990s largely due to government support.

Bail out

In 1998, NBK forced the Government to avail a Sh2 billion cash injection to save it from collapse.

The high non-performing loans brought about by the reckless lending policies, had soared to a point where they exceeded total loans, something that meant NBK was operating on a shaky ground.

At the height of the chaos, NBK bad loans book had soared to about Sh40 billion against deposits estimated at Sh8 billion.

A directive by Treasury to State parastatals to avoid doing business with wobbling banks further depleted the deposits.

However, when Marambii took over he slowly started cleaning the mess at NBK through radical measures that included shedding off employees that appointed through political connections, streamlining operations, closing branches that were gulping cash but with little returns and freezing lending to shore up deposits.

For a man who is generally reserved and does not cultivate the image of a hotshot banker like his peers, Marambii silently and painstakingly turned around NBK and many were surprised when just five years on the job the bank returned to profitability.

The return to profitability marked a turning point and it heralded the return of business by the Government and its agencies.

The successful revival hit its peak in 2010 when NBK posted a 25 per cent jump in pre-tax profit to Sh2.6 billion in 2010 and for the first time in 12 years announced it would pay shareholders a dividend.

Thus as he takes a bow from the executive suite, Marambii leaves with his head held high knowing that a bank that was once in tatters is now standing on a strong footing and poised for growth. However, the latest declining fortunes of NBK dents these achievements of Marambi with many now wondering whether the bank is really out of the woods.

The challenge, though, would be on his successors to maintain the growth momentum in an industry that is getting extremely competitive by the day.

Already the board, which is undertaking the recruitment, has laid down the parameters in that the incoming MD must be of high caliber, result-oriented and self-driven professional, with capacity to spearhead growth and diversification strategies to accelerate the bank’s profits, dividends and shareholder value.