Stanbic Bank asked to submit fresh names in leadership transition

The Central Bank has asked Stanbic Bank to submit new names for its top two positions in a leadership transition that has become unusually prolonged.

Bank of Uganda communicated its position in a meeting on Thursday with top executives of Johannesburg-based Standard Bank Group (SBG) who flew into Kampala last week for meetings aimed at resolving a leadership dilemma at Uganda’s biggest lender.

SBG Chief Executive Sim Tshabalala and Board Chairman Nonkululeko Nyembezi were in Uganda for two days in an attempt to smooth out a transition that has left the systemically large financial institution without a substantive leader since Anne Juuko left for a regional position within the Group last month.  

What should have been a routine transition has been prolonged after the Central Bank declined to approve the appointment of Kenneth Mvuselelo whom SBG had nominated for the job.

Mr Mvuselelo runs the lender’s Eswatini operation.

The matter made it to the floor of Parliament last week when Deputy Speaker Thomas Tayebwa, presiding, supported Otuke County MP Paul Omara’s submission calling for the job of running the country’s largest commercial bank to be given to a Ugandan.

In a meeting with the South African delegation on Thursday, Bank of Uganda Deputy Governor Michael Atingi-Ego and the head of Commercial Bank Supervision Tumubweine Twinemanzi clarified that the decision not to approve Mr Mvuselelo’s nomination was not based on the candidate’s nationality. The regulator reportedly acknowledged the pan-African employment policy favoured by Standard Bank Group which operates in more than 20 African markets.

After Monitor broke the story of the Central Bank declining to approve the nomination, Stanbic Bank announced Samuel Mwogeza and Barbara Dokoria as interim chief executive and executive director respectively, to run management until substantive appointments are made.     

In last week’s meeting, sources say, BoU asked Stanbic Uganda to urgently regularise the bank’s interim appointments to align them with regulations that require the chief executive and executive director to be serving board directors of the company – which the two officials are not.

Stanbic Bank is this week expected to submit a fresh list of nominees for the position of substantive chief executive for the Central Bank’s consideration. We were unable to establish the names on the new list or their nationalities by press time. The bank and the regulator have been contacted for comment.

Interim management
Sources familiar with last week’s meeting said Patrick Mweheire, Standard Bank’s Regional Chief Executive for East Africa, who attended the meeting and is based in Nairobi, was asked to play a more hands-on role in the interim as a substantive leader is confirmed.

Mr Mweheire ran the bank before Ms Juuko and sits on the lender’s board of directors, making him legally qualified under the Financial Institutions Act to stand in as an interim executive.

Standard Bank Group is the majority owner of Stanbic Uganda Holdings Limited, which is listed on the Uganda Securities Exchange and operates Stanbic Properties, Stanbic Business Incubator, SBG Securities, FlyHub, and Stanbic Bank—the country’s largest commercial lender.

Background
In October 2001, the Standard Bank Investment Cooperation of South Africa (Stanbic) won the bid to purchase 80 percent of the shares in the former government-owned Uganda Commercial Bank Limited. The balance of 20 percent shares was listed on the Uganda Securities Exchange. 

Last month, the company declared a record profit after tax of Shs412 billion, of which 68 percent will be paid out as dividends subject to regulatory approval.