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Drama at Equity Bank
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Scubidu
#1 Posted : Wednesday, January 20, 2010 8:43:47 AM
Rank: Veteran

Joined: 9/4/2009
Posts: 700
Location: Nairobi
I wonder just what kind of restructuring is going on at Equity, merging of departments to cut costs, mass layoffs.

Read the article below:

http://www.businessdaily...8/-/6annaq/-/index.html

What does one see from this strategy, departments being merged and scrapped, are things no longer rosy at Equity Bank?

I think the most distressing news is from Equity's investment banking arm (EIB) with the CEO Maina Mwangi resigning; I wonder if the whole department will be scrapped as well?

Although EIB was full of old renaissance guys I don't think Dr Mwangi has been impressed by the performance of the unit. We all remember the half year reports for stockbrokers.

We knew that 2009 would be a difficult year for the Bank, so is a case of weeding out inefficiencies or is this a preview of banks restructuring in Kenya? Equity's price is up today...driving past Kshs17.00
“We are the middle children of history man, no purpose or place. We have no great war, no great depression. Our great war is a spiritual war, our great depression is our lives!" – Tyler Durden
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  | | Edit by moderator: Wednesday, January 20, 2010 5:40 PM | Reason: topic clarified for search engines
McReggae
#2 Posted : Wednesday, January 20, 2010 9:33:28 AM
Rank: Elder

Joined: 6/17/2008
Posts: 23,365
Location: Nairobi
Let's put our eyes!!!!
..."Wewe ni mtu mdogo sana....na mwenye amekuandika pia ni mtu mdogo sana!".
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gathinga
#3 Posted : Wednesday, January 20, 2010 9:37:52 AM
Rank: Veteran

Joined: 11/30/2006
Posts: 635
Three ladies were sacked on the spot when they arrived at 9am for jobo at the H/O. The staff are very anxious....and I understand the UG operation is not bringing in profits as expected. This is going to bring donwn general business confidence in the country.

On the upside, lots of the people employed at EB were cronies of senior guys, people who had to be rewarded for helping as the bank grew here and there. At some point, these had to give in to solid business and recruitment practivces and it appears that time is now.....
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McReggae
#4 Posted : Wednesday, January 20, 2010 9:53:58 AM
Rank: Elder

Joined: 6/17/2008
Posts: 23,365
Location: Nairobi
gathinga, I agree with on that part of recruitment, they have never fully empcraced meritocracy in their recruitment processes!!!!
..."Wewe ni mtu mdogo sana....na mwenye amekuandika pia ni mtu mdogo sana!".
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Jangwa la Jangili
#5 Posted : Wednesday, January 20, 2010 10:12:16 AM
Rank: Member

Joined: 10/9/2009
Posts: 311
Performance aside, the organisational culture of Renaissance and Equity Bank were so far apart, it was only a matter of time before Renaissance chaps started bolting.
Katika Jangwa la Jangili ndipo Pwagu hupata Pwaguzi.
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VituVingiSana
#6 Posted : Wednesday, January 20, 2010 11:07:21 AM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
I wonder how much Maina was getting paid...
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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kyt
#7 Posted : Wednesday, January 20, 2010 12:53:34 PM
Rank: Elder

Joined: 11/7/2007
Posts: 2,182
Spare equity. Please!! only time will tell for this bank.
LOVE WHAT YOU DO, DO WHAT YOU LOVE.
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mpanzi
#8 Posted : Wednesday, January 20, 2010 1:25:48 PM
Rank: New-farer

Joined: 1/6/2010
Posts: 26
From an employee point of view, really bad news and the human side of me empathises with them.
However, from a business | investment point of view, really good news!
It shouldn't take so long for a good management team to realise some positions can not be sustained. If last year's figures cannot make them act then I would be worrying about investing in such a firm. That is the case with BA which still keeps some jobs just to please the public. Fortunately, they have the likes of the Catholic church who inject quite a bit of funding, they can afford to live with inefficiencies.
Certainly, if Equity was being run by any of us, we'd find it prudent to review performance. Owning stocks of Equity is not any different and the management have to be held accountable.

The cases in question:
- Marketing, Advocacy and Policy departments merged with
Product Research and Development
(Are the two related? I guess not in some respects but I imagine the departments serving them could benefit from pooling resources)
-Treasury and trade finance department steamlined. (Same case as above)
-Investment banking arm's fate unknown
(World over, IBs posted losses in the crunch. Indeed no surprise that this is a potential business to get rid of, unless EB wants to go into IB big time in the long run. I suspect this is not the case. Sell it to the likes of D&B. That is their business).
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gathinga
#9 Posted : Wednesday, January 20, 2010 1:52:54 PM
Rank: Veteran

Joined: 11/30/2006
Posts: 635
@mpanzi. Compliance department also merged with a department called..enforcement. Remember there is also an audit department. All these three have been doing is duplicating roles and turf wars. the decision is timely for shareholders to derive value
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VituVingiSana
#10 Posted : Wednesday, January 20, 2010 2:36:38 PM
Rank: Chief

Joined: 1/3/2007
Posts: 18,349
Location: Nairobi
@mpanzi - Kwani what has the Catholic Church got to do with BA?
Greedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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