On Saturday, November 30th, 2024, Uganda woke up to the news that the ebullient Anthony Kituuka had resigned as Managing Director of Equity Bank in Uganda.
The news that Anthony had resigned to “pursue other opportunities outside the organisation” was announced to all bank staff in an impromptu but mandatory online meeting at 11 am on Saturday, October 30th 2024, by Mark Ocitti, the bank’s Board Chairman.
Almost simultaneously, a media statement was released, announcing the resignation and thanking Anthony for “his years of service” and “his dedication and trust in the brand”.
Despite announcing to staff that Anthony would stay on until March 1, 2025, the bank swiftly pulled down his name and photo from the website list of Board members and senior management.
Since the news broke, what has remained on everybody’s mind was why would a career banker resign only after two years as Managing Director of one of Uganda’s five largest banks? And why resign in a rush, for the news to be announced to all staff over the weekend? Couldn’t they perhaps wait to announce the news on a Monday? Was he perhaps forced to resign, a softer way of being fired in corporate boardrooms?
The CEO East Africa Magazine reached out to the bank for a comment on whether Anthony had resigned on his own or whether he had been asked by the Board to resign. This is especially after learning that there had been a board meeting in the week of Anthony’s resignation, at which several issues, including the bank’s performance, had been discussed.
The bank, however, in an email to this writer, said that Anthony hadn’t been fired.
“Anthony’s resignation was purely voluntary,” Clare Gatabi Tumwesigye, the bank’s Head, Marketing and Corporate Communications, told CEO East Africa Magazine in an emailed response.
Anthony’s exit, either voluntary or not, however, doesn’t come as a surprise, given the rocky 2024 Equity Bank Uganda has been through- especially the digital fraud that surfaced in March 2024 in which the bank lost an unprecedented UGX65 billion and the exit of senior executives that followed. Between March and December, four exco executives left the bank⏤ one was forced out and arraigned in court over the digital fraud.
Anthony is the fifth exit.
A blazing banking career
Anthony joined banking in March 2007 as Head of Business Banking at Absa Bank Uganda (then Barclays Bank Uganda) in March 2007 from Hima Cement where he was a Customer Services Manager. His star fast-rose. In less than two years, he crossed over to KCB Bank Uganda and became the Head of Corporate Banking in October 2008 until February 2014 when he joined the KCB Head Offices in Nairobi as Head of Global Corporates.
While in Nairobi, he caught the attention of Equity Bank and was appointed the Executive Director of Regional Subsidiaries in October 2014. Working under and reporting to the Group CEO, the indefatigable James Mwangi, his job entailed designing, driving and delivering the strategic objectives of the Group underpinned by digitalisation and regional expansion.
In less than two years, he was appointed Executive Director at Equity Bank Uganda in June 2016.
As Executive Director, he teamed up with then Managing Director, Samuel Kirubi to turbocharge Equity’s rise in Uganda.
The duo indeed did a fine job in cutting through the market and etching out a place for the bank in the top 5 is a very short time.
In less than 7 years, between 2016 and 2022, deposits grew by 5.7 times, at a CAGR of 28.3% from UGX480.4 billion to UGX2.76 trillion. Lending grew by 5 times, at a CAGR of 26.2% from UGX319 billion to UGX1.63 trillion.
As a result, assets also grew by 5.2 times, at a CAGR of 26.7% from UGX642.8 billion to UGX3.37 trillion.
Net profit too grew from UGX17 billion to UGX86 billion in 2021 but reduced to UGX45.8 billion in 2022 due to provisioning for bad loans that increased from UGX25.7 billion to UGX90.7 billion that year. Despite dampened profits in 2022, on average, profit growth was on a CAGR of 15.2%, much better than most other industry players, by all standards.
By the end of 2022, the duo had catapulted Equity Bank Uganda from the 10th position by deposits in 2016 to the 3rd at the end of 2022. In the same period, the bank also jumped from the 9th position by lending to the 3rd position, from the 12th by assets to the 5th and from the 10th by net profit to the 6th.
At UGX469.2 billion in 2022, Equity Bank also settled in the 4th position by income by the end of 2022.
Two rough years
In November 2022, Samuel Kirubi was moved to Nairobi to become the Group Chief Operating Officer. Naturally, Anthony Kituuka became the Managing Director, effective December 2022, promising to keep the growth momentum.
However, growth in Kituuka’s first year as Managing Director wasn’t as supersonic. Yes, the bank grew but not at the same speed as before.
Irene Mwoyogwona: Beyond the Numbers – How Pride Bank's Award-Winning CFO Combines Profitability and Social ImpactFor example, in 2022, customer deposits grew by only 7.9% from UGX2.76 trillion in 2022 to UGX2.97 trillion, yet the previous year, deposits had grown by 20.6% from UGX2.29 trillion to UGX2.76 trillion.
Lending, dropped by some 1.3%, declining from UGX1.63 trillion to UGX1.61 trillion. The previous year, lending had grown by 5.5% from UGX1.54 trillion to UGX1.61 trillion.
Dampened lending amongst other reasons, slowed down assets growth⏤assets grew by 11.1% from UGX3.37 trillion in 2022 to UGX3.75 trillion in 2023, yet the previous year, they grew by 19.7% from UGX2.82 trillion to UGX3.37 trillion.
Total income grew by 21.4% from UGX469.2 billion to UGX569.6 billion. The previous year, it grew 22.6% from UGX382.7 billion to UGX469.2 billion.
For the first time in 13 years, the bank made a loss of UGX18.8 billion.
In an April 2024 interview with the CEO East Africa Magazine, Anthony Kituuka attributed the loss to a provisioning for bad and doubtful debts which had in 2023 continued to grow from UGX90.7 billion to UGX191.2 billion!
Of this, UGX84 billion was provisioned to cover the impact of digital lending fraud that hit the bank via their Eazzy Stock, a digital lending service that enables businesses to borrow capital against their stock. Another UGX20 billion was provisioned to cover bad loans, especially to government contractors who had a bad year due to delayed payments.
But perhaps the second biggest dent on the bank’s loan book was a UGX82,243,081,835 that the bank lent to Dei Industries International Ltd And Dei Biopharma Ltd (formerly Dei Natural Products International). The two companies belong to a Dr. Mathias Magoola. The bank was counting on a UGX578.4 billion bailout by the government to Dr. Magoola to significantly reduce their bad loan book, but they were shocked to learn that, upon recieving the money from the Government of Uganda, the businessman instead channelled the money through Citi.
Repeated demands by Equity Bank fell on deaf ears. Instead of paying Equity Bank, Dr. Magoola sued Equity Bank Uganda and Equity Bank Kenya, asking the court to declare that the UGX82,243,081,835 that Equity Bank Uganda demanded from him and an additional USD43,230,937.65 demanded by Equity Bank Kenya was “inflated, extortionate and unconscionable”.
He also prayed for a permanent injunction restraining the Equity Bank Uganda and Equity Bank Kenya) its agents or servants from taking any enforcement or recovery measures against the Plaintiffs in respect of any of the impugned loans until the hearing and final determination of the main suit.
This not only caught the bank by surprise but also ballooned their Non-Performing Loans to Gross Loan Ratios to mid-teens by June 2024. The average acceptable rate by the regulator is 5% and below and the industry average that month, according to the Bank of Uganda was 4.95%.
This development, in addition to an earlier report into the digital lending fraud that, among others, found out that some red flags had been raised internally but were ignored by management, started straining the relationship between the Head of Office and Anthony.
We do understand that following the discovery of the digital fraud, Head Office dispatched Godfrey Kamau, its Group Director- Operations, to pitch camp in Kampala to oversee operations but also help the Group conduct a full audit into the fraud while keeping an eye on operations to stop any further haemorrhage.
In July 2024, following the resignation of the Bank’s CFO, Kezia Dorothy Asiimwe, the Group sent another of its trusted soldiers- a Richard Muraguri Wambugu, as CFO.
Subsequently, the Group also sent in an Andrene Terry as Head of Operations and a Bernard Ritho to oversee Payments and Channels, where digital banking largely falls. In July 2024, the Group also recruited Gift Shoko, previously the Group Director, Regional Business at the NCBA Group, for the Executive Director role in Uganda.
While ordinarily, Godfrey Kamau, Richard Muraguri Wambugu and Gift Shoko should have been under and reporting to Anthony, it is understood that instead, there were instead dual reporting lines to Nairobi and Uganda. This effectively shaved Kituuka’s powers but also filled the vacuum left by Kenneth Onyango, the Executive Director of Commercial Banking who was implicated in the digital fraud, was fired and imprisoned.
It also filled the gaps left behind by the resignation of the CFO and other senior executives as well as created a backup and/or alternative leadership base for the Group just in case of anything.
We have also received unconfirmed reports that the Group has, since September 2024 been in the market searching for a CEO.
If true, this kind of vote of no confidence alone would have been enough to cause Anthony to resign.
However, in a brief interview with this Magazine, Anthony Kituuka insisted that having stabilised the ship after what was a rough year, decided to honourably and timelily lay down his tools.
“I have weathered the storm. If anybody knows me well, that is my persona. I wouldn’t leave in the middle of a storm and leave everyone high and dry. I’m the last man on the ship. When the ship is stable and it has docked, I can step off. I think the ship has docked. I’ve stabilised the ship.
Asked where he is going, next, Anthony remains tight-lipped: “I can’t tell you right now, but there’s something next for sure”.
