How StanChart Boss Herman Kasekende will Be Remembered

How StanChart Boss Herman Kasekende will Be Remembered

By John V Sserwaniko

As we exclusively reported on Tuesday December 27th 2016, Herman Kasekende is no longer the MD Standard Chartered Bank having been transferred to head the same institution in Zambia.

But how will he be remembered generally by the banking fraternity and specifically as StanChart boss? Having been the pioneer Ugandan MD for the country’s 2nd largest bank (by Assets), Kasekende was a big brother from whom many professional peers learnt.

He was also an active member of Uganda Bank Association whose ascendance to the top job inspired others to aim high.

For long the banking MD job has been a preserve of expatriates as Ugandans were seen as not being good enough.

Industry sources say heading a big bank didn’t make Kasekende aloof.

He was always down to earth and liked doing charity. And unless you were told, you wouldn’t easily know that this modest sized corporate was head StanChart.

Because of its international reputation, his StanChart also always attracted a huge fraction of the fixed deposits accounts by big wallet clients.

Crane Bank partly suffered because of his shrewdness and ability to give better offers as was seen in the way NSSF MD Richard Byarugaba transferred hundreds of billions from the Fund’s Fixed Deposit accounts to StanChart.

Sources say this was after Kasekende offered better returns for the Fund.

At just 13 branches, he may not have had the highest number of account holders but his bank had a big market share in terms of volumes of money held and colossal transactions facilitated.

Many in the construction industry found his StanChart very attractive because of its liquidity ability to fund big projects.

This is how Abid Alarm of Alarm Group went to no one but to StanChart when he desired to go into large scale steel manufacturing.

A number of investors in large scale plantation farming also found StanChart offer very competitive.

The promoters of Pioneer buses also went nowhere but to Kasekende’s StanChart.

It’s one of the few banks with such liquidity potential and Kasekende remarkably liked funding local Ugandan businesses.

Pioneer is understood to have borrowed up to $30m.

Whereas such lending shows strength, these loans are the very reason there was nervousness at StanChart throughout Kasekende’s 4 years as MD.

Because of the difficult unforeseen crippling market conditions, the borrowers defaulted and Kasekende was preoccupied with provisioning and struggling to recover these monies.

It should be recalled that the loans were contracted during his predecessor Laming Manjang’s time as MD and Kasekende merely inherited them.

Provisioning basically means re-adjust repayment terms (e.g. the interest rate, the repayment period etc) all aimed at enabling the borrower pay up.

Banking sector pundits salute Kasekende for being able to make profit for his shareholders while undertaking such provisioning at the same time.

Quite often such large scale provisioning hurts the bank’s profitability and can even push it to loss-making in the short term. At StanChart this hasn’t been the case.

Bank of Uganda reports show that Kasekende managed provisioning while maintaining handsome though declining profitability for the bank.

Maintaining number 2 position, last year he made Shs28bn in profit for his bosses. This was at a time of general decline in performance of all banks but he still pulled it off combining hard work and prudent management decisions.

Kasekende cleaned up StanChart’s balance sheet and is leaving it better than he found it. Though very cautiously, Kasekende also engaged in branch network expansion by opening new branches at Bugoloobi, Acacia and Freedom City.

He also heavily invested in technology to harness the Mobile Banking Platform. The ATM network at the 30 locations was reconstructed to serve more efficiently. According to StanChart Head Corporate Affairs Hellen Nangonzi, Kasekende will also be remembered for prioritizing Corporate Social Responsibility (CSR).

In his 4 years as MD, over 1.5m Ugandan children got eye care, screening and surgery as part of StanChart’s East Africa-wide “Seeing is believing” project worth $6.25m.

The initiative seeks to eradicate avoidable blindness. StanChart has been doing this in conjunction with Ministry of Health and Brien Holden Vision Institute.

Another unspecified sum was sunk into the Goal Project aimed at keeping especially the girl child in School as part of the bank’s CSR.

BRAC Foundation was StanChart’s partner on this one. Nangonzi says other CSR projects which the MD was passionate about include Education for Entrepreneurship and Financial Education for the youth whose training sessions Kasekende would personally attend as a participant or facilitator.

A recent BoU report shows that $1.2m was invested in the “Seeing is believing” charity program in Kasekende’s time as MD. Under this initiative, hospitals were re-equipped, vehicles bought for them and medical personnel retrained in order to boost child eye care at several Ugandan hospitals.

The bank also heavily funded tree planting projects and has also earmarked $1m to carry the Goal Project initiative forward in 2017.

The “Seeing is believing” project is anchored mostly in Mubende district. Kasekende was also Ugandan pioneer MD at StanChart which has operated in Uganda for over 100 years and last year it famously celebrated its centenary serving in this market.

Decline in performance has hit StanChart not only in Uganda but Africa-wide because markets in SADDC, ECOWAS and EAC sub regions haven’t been performing as well as they did 5 years ago.

Even in that era of almost unprecedented decline, StanChart East Africa (basically Uganda and Kenya) have remained the best performing markets recording remarkably high profits.

The slumping of the South African economy and that of Zimbabwe have undermined performance in the SADDC region just like decline in Ghananian and Nigerian economies greatly hurt StanChart prospects in the ECOWAS region.

This trend, whereby East Africa remains StanChart’s best performing region in Africa, is likely to persist in 2016’s Group’s performance report expected in a few weeks time.

In Uganda, the cautious BoU sources intimated that, StanChart is likely to exceed its 2016 targets by over 10% when the Group’s report finally comes out.

Even when Nangonzi downplayed everything saying there is nothing unusual, the latest StanChart transfers of Kasekende and Grace Muliisa will create some nervousness on the ever very fragile financial markets.

A top BoU official maintained that there has been a general decline in the performance of the Ugandan financial markets adding that there is nothing strange about top level staff redeployments at StanChart.

Nangonzi maintains the transfers are positive because the redeployment of Muliisa, who has headed Consumer Banking for 5 years, will pave way for young managers to grow up the corporate ladder. She also dismisses claims Kasekende was being punished.

“Zambia is a much bigger market for us as Standard Chartered Group and there is no way somebody being assigned to head a bigger market can be said to be undergoing punishment.

Its’ actually a promotion for him.” In Uganda, StanChart employs over 150 Ugandans who are eagerly waiting for the new MD whose recruitment process Nangonzi says started weeks ago.

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