Paul Russo was busy overseeing KCB Group employees across the region, managing recruitment, attending to payroll, and settling workers’ union squabbles when Chase Bank screeched into receivership.
He would be called to take over the troubled bank as the receiver manager in a role that would take him away from payroll matters and firmly onto the path to heading the country’s largest lender.
Mr Russo’s role at Chase Bank was a great success cementing KCB’s role as a systemic bank which could come in and stabilize the sector during times of upheavals.
KCB, along with DTB and NIC Bank had also participated in the rescue of Imperial Bank which collapsed just a year before Chase Bank.
Managing the crisis-saddled lender thrust Mr Russo deep into Kenya’s bad loan books as well as an opportunity to learn from the best on how to handle a deteriorated loan book.
When he returned to KCB after his stint at Chase Bank, Mr Russo would be deployed as KCB Group’s Regional Business Director in charge of KCB Bank Tanzania Ltd, KCB Bank Rwanda Ltd, KCB Bank South Sudan Ltd, KCB Bank Uganda Ltd and KCB Bank Burundi Ltd.
He was also placed in charge of KCB Representative Offices in Ethiopia and China, KCB Capital Ltd and KCB Insurance Agency Ltd to deliver and increase profitability, business and market share, product penetration, sustained business, banking operations and exemplary customer experience.
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With this role, Mr Russo has grown an understanding of the lender’s regional business, its challenges and the monumental role of growing the bank beyond Kenya’s saturated market.
In this role, he reported to the former Group Chief Executive Officer and Managing Director, Mr Joshua Oigara, and was a member of the KCB Group EXCO directly accountable for the general management and oversight of KCB businesses in the region.
He would later be assigned to run KCB subsidiary, the National Bank of Kenya (NBK) and it is here that Mr Russo demonstrated his capacity to take over KCB Group.
At NBK, Mr Russo brought his understanding from dealing with the bad books at Chase and delivered enviable results.
When KCB Group bought NBK, the lender had a huge problem including years of losses, loan defaults, weak credit policies and in dire need of more capital.
Non-performing loans had swelled from Kes2.2 billion in 2012 to Kes32.4 billion by June 2019. Upon acquisition, it pushed KCB Group non-performing loans ratio up to 12 percent.
NBK had also lost customer deposits besides suffering from historical credit losses on loans and advances that ate up capital. By the time of acquisition the bank suffered from negative capital ratios and was no longer compliant with regulatory requirements.
When Mr Russo took over from former NBK Chief Executive Officer Chris Musau, he overhauled the entire team at the bank, and streamlined the human resource unit using his background as an HR specialist.
He also brought his skill in handling bad books at Chase Bank to recover dud loans making an impressive cut in NPLs from Kes32 billion to Kes25 billion in just months.
This progress was monetarily set back by the coronavirus pandemic, a difficult environment in his first year in charge.
KCB also injected fresh capital into NBK making a Kes5 billion disbursement out of the Kes8 billion new capital expected to be pumped into the lender which would allow the bank to issue more loans.
Today, NBK is a profitable unit with a net income of Kes661 million in the half of this year down slightly from Kes717 million last year and a loss of Kes381 million in 2020.
When Joshua Oigara’s term came to an end, Mr Russo placed his application along with seasoned bankers, who also eyed the top post of Kenya’s largest bank.
He was already running the lender on an interim basis putting him ahead of the pack in terms of his hands-on experience.
When the board appointed Mr Russo they said he had emerged top of the competitive process by demonstrating he would bring a wealth of experience in banking, operational management, people management, strategy, and sharp business acumen.
It is not surprising that the former KCB Group Regional Business Director’s first feather in the cap came through the acquisition of their largest Congolese lender Trust Merchant Bank (TMB).
The Kes178.5 billion ($1.5 billion) asset bank with strong retail, SME, corporate, and digital banking channels and over 110 branches will boost KCB assets to Kes1.5 trillion making it the largest Kenyan bank by assets.
He also takes over KCB Group which reported a 27.5 percent rise in net profit for the half-year ended June 2022 at Kes19.5 billion which also suffered a spike in NPLs in the six months period.
KCB’s loan loss provision shrunk by Kes2.2 billion to Sh4.3 billion despite the stock of gross non-performing loans rallying 81.1 percent to Kes173.4 billion.
The board must have looked at what he managed to do with Chase and NBK and said this is our man.