I&M Bank has poached its larger rival Absa Bank Kenya’s chief executive Abdi Mohamed, underscoring the ambitions of the smaller lender that has been expanding aggressively in recent years.
The sudden move by Mr Mohamed to I&M Bank –the Kenyan banking subsidiary of I&M Group— marks a rare spectacle in the corporate world where CEO transitions are usually carefully planned to ensure smooth handovers.
The departure is also curious given that I&M Bank is smaller compared to Absa in terms of earnings and market value.
I&M Group will stretch its payroll if Mr Mohamed is to retain the same level of compensation he was enjoying at Absa.
His benefits at Absa totalled Sh120 million last year, dwarfing the Sh79.2 million that I&M Group paid its regional chief executive, Kihara Maina, who will now be his boss.
I&M Group has regional operations in Kenya, Tanzania, Uganda, Rwanda and Mauritius, which are overseen by Mr Maina. Mr Mohamed will head the Kenyan operations.
“I&M Group is pleased to announce the appointment of Abdi Mohammed as its chief executive officer for I&M Kenya Limited, subject to approval from the Central Bank of Kenya,” said I&M Group in a public statement.
The company did not give a timeline on when Mr Mohamed is expected to start his new job but Absa Bank stated he will be on a six-month gardening leave, indicating his term will take effect beginning next year.
Gardening leave refers to the period during which an employee who has resigned or been terminated remains on the company payroll but is not required to be at the workplace or continue working on any projects related to their role.
This will typically mean that the employee is no longer allowed to engage with clients or work for a competitor during this time.
“Mr. Mohamed will proceed on gardening leave while serving notice and will remain available to the board and management to ensure a seamless transition process,” Absa said.
Mr Mohamed has worked with Absa, formerly Barclays Bank, for 32 years rising to lead its Tanzanian operations before moving to helm the Kenya business.
Absa said it was embarking on a journey of recruiting a substantive chief executive for the bank with its long serving chief financial officer Yusuf Omari tapped to hold the reins in an acting capacity.
In the first three months of the year Absa Bank reported a 13.8 percent drop in net profit to Sh5.3 billion while I&M Bank Kenya reported a net income growth of 8.4 percent to Sh3.42 billion.
Absa has an asset base of Sh571 billion constituting a loan book of Sh303 billion while I&M Kenya has Sh550 billion in assets and loans of Sh250 billion. Customer savings with the two banks are almost at par with Absa having Sh396 billion in deposits while I&M has Sh396 billion.
“This leadership transition marks an important milestone for I&M Group, underscoring the bank’s commitment to accelerating growth through innovative financial services and customer-centric approach,” said I&M Group.
The group has been vocal of its intentions to play more in the retail market with investment in a more robust IT system to support mass numbers. Mr Abdi has been crucial in revamping Absa Bank’s La Riba product which targets the cash rich Somali community.
