The National Bank of Kenya (NBK) is teetering on the brink of collapse, grappling with crippling loan debts amounti g to nearly Ksh50 billion, much of which remains un-recovered.
A planned Ksh4.2 billion bailout from its principal owners has reportedly been delayed, compounding the bank’s woes.
On the Nairobi Securities Exchange, NBK’s share price has plummeted over 50%, from Ksh9.15 last year to the current Ksh6.
According to the exposé published on Kahawa Tungu, 70% of these debts, equivalent to Ksh32.9 billion, are classified as Non-Performing Loans (NPLs). If left unresolved, this could spell the end for one of Kenya’s oldest financial institutions.
But what is driving NBK into financial ruin? Insider sources suggest that the bank’s collapse is being systematically orchestrated by its top brass.
The bank’s Managing Director and CEO, Wilfred Musau, alongside Director of Corporate Banking Reuben Koech and Board Credit Committee Chair Joseph Kering, have been implicated in dubious schemes that have drained the lender’s coffers.
An “incentivized bad debt collection program,” ostensibly designed to recover unpaid loans, has reportedly become their personal cash cow.
Under this scheme, the writer reports, defaulters were promised significant discounts on their debts.
However, multiple reports indicate that customers have not benefited from these arrangements. Instead, the managers allegedly exploit the program for personal gain, demanding kickbacks from defaulters or outright siphoning funds meant for debt recovery.
One prominent victim is Ben Gitonga of General Mills East Africa Limited, who lost Ksh28 million in the process. Others, like Chelsea Holdings Ltd, owned by Nairobi tycoon Amin Akberali Manji, have also fallen prey.
Manji, who borrowed to build luxury apartments on Nairobi’s Riverside Drive, faced demands for kickbacks from the managers. They allegedly sought a unit of duplex each in exchange for writing off half his debt. Manji, however, stood his ground and refused to comply.
Robert Njoka Muthara, the proprietor of Zing Investments Company, tells a similar story of betrayal. Poached from Kenya Commercial Bank (KCB) with promises of better terms, Muthara became entangled in NBK’s toxic practices. When he sought confirmation of a trade instrument for a diaspora buyer, NBK’s limitations with correspondent banks led to the cancellation of his US$2 million (Ksh200 million) deal. Left reeling, Muthara pursued legal action but was coaxed into dropping the case with false promises of additional financing.
Once the case was withdrawn, NBK reneged on its promises. Koech, acting under Musau and Kering’s directives, demanded a 10% “facilitation fee” amounting to Ksh50 million for Muthara’s inclusion in the debt recovery program. Unable to meet this demand, Muthara remains in financial distress.
Dr. Kennedy Mbugua Thairu of Benvar Estates Ltd faced a similarly grim fate. Lured from the East African Development Bank, he sought a loan to acquire land and start operations in Nanyuki’s Timau area. While NBK financed the land purchase, they withheld operational funding, setting him up for failure. Koech later approached Thairu, demanding three acres of his land for the three managers in exchange for a partial loan write-off. Like others, Thairu refused to comply.
The schemes extended to South Nyanza, where Mzee Peter Bogonko Onchonga, owner of Pebo Kenya Ltd, was ensnared. Poached from Standard Chartered Bank, Onchonga sought financing to complete the second phase of Nyakoe Hotel. Delayed disbursements caused massive losses, and when Koech proposed the incentivized program, Onchonga initially agreed. However, undisclosed kickback demands soured the deal, and he pulled out.
These cases expose a consistent pattern of corruption where top managers exploit customers’ vulnerabilities to enrich themselves. Defaulters are coerced into schemes designed to fail, while the bank’s financial health deteriorates. Despite the bank hemorrhaging billions, its leadership grows wealthier by the day.
Central Bank of Kenya Governor Dr. Patrick Njoroge has reportedly allowed NBK to re-state its financials and backdate losses, a move seen by critics as a cover-up of the rot.
With privatization looming, this could be a smokescreen to disguise the bank’s woes from the public.
NBK’s current trajectory raises pressing questions about oversight and accountability. How has such blatant exploitation gone unchecked? What role will regulators play in safeguarding customer interests and ensuring justice?
As the countdown to NBK’s potential collapse continues, stakeholders and the public are left grappling with the aftermath of a system that prioritized personal gain over institutional integrity. If urgent action is not taken, NBK may become yet another cautionary tale of corporate greed in Kenya’s banking sector.