NBS Bank poor performance blamed on leadership

Post was last updated: December 30, 2016

NBS Bank shareholders Thursday took to task the executive management of the bank over what they called lack of policy direction.

The shareholders speaking at an Emergency General Meeting held in Blantyre said frequent change of top management is contributing to the bank’s poor performance for years now.

Last year, the bank made a loss of K195 million and is this year projected to make a 20 percent of last year’s.

Apart from making the losses, the bank is also facing a daunting task to meet the Reserve Bank of Malawi’s capital requirement under Basel II of capital and total capital ratio to be at 10 and 15 percent respectively. The deadline for this compliance has been extended from December this year to April next year.

One of the shareholders, Jeff Gondwe, said it is the top management which is responsible for policy formulation, hence keeping on hiring and firing results in inconsistency.

“If both the Chief Executive and the Deputy go away as it has been the case at NBS bank, it affects performance of the bank. There are a lot of banks in Africa and outside that have actually been closed because of lack of proper management. So it is a matter of great concern to us the shareholders and we hope there will be consistency at the top this time around,” said Gondwe.

He also attributed failure of the bank to collect K9 billion toxic loans to executive management change.

“The bank has not been doing very well at all and we are not very happy. There have been K 9 billion toxic loans and to us this shows that the bank is not efficient. This is why I asked the questions are these loans recoverable? Because if we can recover [the loans] the bank will be liquid,” he said.

The bank’s Chairman, Vizenge Kumwenda, while admitting that there have been changes at the top, assured the shareholders that things will change.

“The observation has been noted and be assured that we will strive at improving things for the better. In fact, we are driving at getting back to be among top three banks in the country. On the toxic loans, we have set up a special unit specifically to recover the loans,” said Kumwenda.

He also disclosed that they have put stringent measures for those accessing loans to avoid granting loans to people or companies that will default.

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