Banking & Microfinance
Dr. Gideon Muriuki: Kenya’s Banking Contrarian With a Panache For Pulling Ground Breaking Surprises
“The success of Co-operative Bank cannot be appreciated by simply looking at its good financial performance alone. Rather, its strength lies in the transformative influence it has had in the lives of millions of Kenyans who depend on the co-operative movement. It is a great privilege for me to serve an institution that has made such a tremendous contribution to the improvement of the welfare of so many Kenyans,” says Dr Gideon Muriuki.
In 1989, the Cooperative Bank of Kenya which was named this past June 22 as East Africa’s Regional Bank of the Year, restructured its hierarchical structure, creating a Managing Director position as the last line of defense, supplanting that of a General Manager.
WithDr. Erastus Muriethi, an emblematic cooperative movement influencer became the first holder of the office, only for him to later wittingly entrap sections of Kenya’s credulous media into scandalmongering the bank after getting the boot in 2001.
What followed next was the arrival of 39-year-old Gideon Maina Muriuki as a replacement, who would 21- years later be named the Best Bank CEO in Africa.
Irrefutably at the time, the career progression of this State honouree who has so far been awarded three awards including that of First Class Chief of the Order of the Burning Spear in 2017 plus a 2011 Moran of the Order of the Burning Spear (MBS) and also that of the Order of Grand Warrior” (OGW) in 2005, arguably caught local banking pundits flat-footed.
For here was a quintessential own man with zilch linkage to old money or famous last name, a bloke who shunned hobnobbing with influence peddlers drawn from Kenya’s political class – often the old and tested practice of landing a top job in Sub -Saharan Africa’s third biggest economy – instead here was a man whose candidature spoke of upending the old Kenyan networks that thrived in the world of kakistocracy -indeed he was the proverbial great destroyer of the old order, arriving mutedly to a feeble house.
His resume initially set him out for a career as a number cruncher for ideally his 1988 undergrad degree from the University of Nairobi was in mathematics.
But that was not to be.
For thisKagumo High School alumni inadvertently chose to genuflect towards the thinking of Roy T. Bennett, a highly acclaimed author who famously wrote, “ Create a vision for the life you really want and then work relentlessly towards making it a reality.”
It turns out Muriuki was laser focused on succeeding and unbeknownst to him Bobby Unser was his guardian angel for when the opportunity showed up he was prepared with the attendant attribute of success following suit as he transited into the byzantine world of banking like a natural.
On 1st March 2001, the day he took the reins of leadership, Muruiki had cloaked 12 years working as a banker, six under the clock of Co-op Bank, an intrepid corporate body, that this indigene of Mung’aria Village in Tetu, Nyeri County says “continues to pursue strategic initiatives that focus on resilience and growth in the various economic sectors.
This is anchored on a successful universal banking model supported by an innovative digital presence, a wide physical footprint, 9 million customers, and the unique synergies in the over 15 million members co-operative movement that is the largest in Africa.”
When Muriuki got into the corner office of this lender he transformed it to become a pragmatic and sensitive market leader unafraid to take bold decisions as witnessed when for example the bank shed off the befuddling tagline that previously read, “ The Bank on the Move”, replacing it with one that today simply gloats“We are you” intrinsically personalizing the bank- client relationship for together with his team at Co-op Bank they made a conscious business decision to understand the spirit behind the marketing truism that states, Taglines Don’t Position a Brand — Slogans Do .
A former Director of the Bank who only spoke on condition of anonymity reminisces on why they promoted Dr.Muriuki to the foremost position.
“ We were clear in our minds that the institution simply required moral leadership to stabilize. We were looking for somebody who could shepherd the bank by sheer force of their personality. A person who could inspire legitimate confidence in the marketplace. For at the time, turning the other way seemed the preferred modus operandi around the country.
But there was this palpable feeling in the air that was indicating that Kenyans literally were fatigued with the system, real change was beckoning. And we dared to meet the moment by competitively seeking a fresh face,” says this former Director now a septuagenarian but actively involved in the country’s corporative movement.
Verifiably before Dr. Muriuki’s ascendancy, becoming the big kahuna, the top management of Co-op Bank had routinely displayed a proclivity of thumbing its nose to fiduciary duty, a malice that was ubiquitous across the industry, beginning disproportionately in the late 1980s running to the tail end of the 90s.
A March 28 2000 declassified World Bank report apparently showed how fraudsters used the bank to fleece local coffee farmers at a time when the lender, currently the fifth biggest company by equity capital, at the Nairobi Securities Exchange, (NSE) which is the fifth biggest by market capitalization in Africa, was cavalierly reporting a staggering Ksh 2.3 billion loss.
Coincidentally, during the period, the country’s economic health was also anemic with the peremptory regime of Daniel Arap Moi facing the challenge of foreign aid deprivation for exhibiting a totalitarian streak.
Indeed the Organization For Economic Cooperation and Development (OECD) had weighed in saying the Kenyan economy had for the past four years ending 2000 registered negative 0.5 % GDP growth “ following weak macroeconomic performance and governance–related problems that continue to pitch Kenya against the major international donors, thereby depriving the country of much needed external inflows.”
With two scholars Samuel Muiruri Muriithi and Lynette Low, in an academic paper titled, The Kenya Banking Industry: Challenges and Sustainability, saying between 1980 and 2000, the country’s financial industry was characterized by major financial upheavals that triggered the collapse of many banks, while others were in and out of receivership.
Said the duo.“ The crises were attributed to non-performing loans, weak internal control mechanisms, poor governance, and poor leadership,” arguably also a fair description of the status of Co-op bank at the time.
But a fresh team led by Muriuki had within three years upended naysayers’ predictions, reporting an enhanced profit of Ksh 183 million (present-day US$ 1,503,698), reflecting a 78% improvement on the Ksh 103 million(US$846,343) profit reported in 2002.
The good times were arguably back.
With the prediction of a new government coming true in 2002, the mood in the country morphed to one that was palpable with optimism, emboldened by the grand slam win ofMwai Kibaki at the presidential sweepstakes, a technocrat credited with writing the Sessional Paper Number 10 of 1965 which laid down the foundation of Kenya’s Steeler economy associated with the booming 70s.
And as a positive spin-off, the bank’s Board of Directors agreed to payment of a dividend of 3% during the said period, bringing to a close, a dividend drought that had run for seven years.
With the exemplary show of leadership emanating from the bank, the Co-operative movement within Kenya, disproportionately the biggest shareholders of Co-op Bank decided to double the capital base of the increasingly nimble and ambitious institution in 2004, injecting an additional capital of Ksh1.1 billion (US $ 9,038,619), bringing the total shareholders’ equity of the Bank to a whopping Ksh 2.3 billion (present-day US$ 18,898,931).
Now the Bank was understandably ready to play in the big leagues.
Invariably then, the world was batting for Kenya’s renaissance after years of decay and stagnation. And there was a good reason behind the burgeoning confidence.
Dr. Joel D. Barkan, nicely captures the mood of the day.
“Few African countries have experienced the broad-based renewal of their economies that Kenya has enjoyed since 2005. After nearly two decades of zero to negative economic per capita growth, Kenya turned the corner in 2004 with an aggregate growth rate of 5.1 percent. This rose to 5.7 percent in 2005 and 6.1 percent in 2006 – and continues to rise.
“Kenyans have not enjoyed such prosperity since the mid-1960s and early seventies when Jomo Kenyatta governed their country,” he wrote.
In 2022, Muriuki marked 33 years since getting employed as a banker- of which, 27 he has resolutely been the core cheerleader of what is now a Ksh 68.94 billion ( US$ 566,474,934)capitalized behemoth as of Nov 5, 2022, making it the third biggest bank within East Africa.
To close Nairobi watchers he has remained true to Albert Einsteins’ counsel that advises that one should not try to become a man of success only, but rather they should try to become a man of value.
Indeed human history is transfixed with people who excel exceedingly in their chosen fields with institutions of higher learning for example beginning in 1478 or 1479 awarding honorary doctorate degrees to exceptional achievers.
In Kenya, the first honorary degree was awarded in 1970 and the rite of passage has routinely been repeated during graduation ceremonies throughout the globe where Kenyans and intermittently global outliers get the rare opportunity to grace the red ubiquitous red carpet.
For example, a sneak preview of that hallowed list from the University of Nairobi shows a determination by institutions to recognize men and women who are bellwethers in generic fields.
This Nov 2022, Muriuki who today is reverently referred to as Dr. courtesy of this tradition, received his third honorary degree for singularly contributing immeasurably to the local banking sector.
While receiving his second honorary Doctorate of Humane Letters from the Co-operative University of Kenya in Feb 2022 the citation was apt.
“This conferment of Doctor of Humane Letters (Honoris Causa) is in recognition of his distinguished career in the banking industry, immense contribution to the co-operative sector, exemplary service to the nation, successful turnaround, and the great expansion of the Co-operative Bank of Kenya,” the university said
And when he received his first Honorary Degree of Doctor of Businesses Leadership (Honoris Causa) from Kabarak University it was in recognition of his exemplary performance in entrenching the Cooperative banking model in the Kenyan financial market and providing demonstrable leadership and sustainable growth over the last 10 years where now Dr.Muriuki displayed his traditional self-deprecating demeanor.
Said he: “The success of Co-operative Bank cannot be appreciated by simply looking at its good financial performance alone. Rather, its strength lies in the transformative influence it has had in the lives of millions of Kenyans who depend on the Cooperative movement.
It is a great privilege for me to serve an institution that has made such a tremendous contribution to the improvement of the welfare of so many Kenyans. I take this award as an affirmation that service with integrity and honour will always be rewarded in the fullness of time.”
In addition, Dr. Muriuki also is a recipient of a decoration of Chevalier de L’orde National du Burkina Faso awarded by the President of Burkina Faso in recognition of his outstanding contribution to the development of rural finance in Africa
It turns out Dr. Muriuki’s inchoate tenure at Co-op Bank has indelibly become the stuff of corporate folklore. It encapsulates the blue true never-say-die spirit of a local turnaround artist with generic media drawn from around the globe routinely regurgitating his initial performance running for 12 months where he set in motion the sensational return to profit of a hemorrhaging entity.
“ Despite the difficult circumstances, the year 2001 saw considerable improvement. That year on 1 March, Dr. Gideon Muriuki became the company’s, Managing Director. At the end of the fiscal year, the bank reported a 60% reduction in its 2000 losses. In the year 2002, the turnaround was official when the bank reported a profit of KES 103 million.
During the following years, the bank saw amazing growth. By the end of 2007, Co-op Bank recorded a profit of Kes 2.3 billion and declared an eight percent dividend, its highest payout by far in years, “ reported the International Banker.
He is also hailed for listing the lender at the Nairobi Stock Exchange (NSE) at a time when even the most optimistic analysts were predicting a poor subscription of the Initial Public Offer(IPO).
“ Analysts were expecting a lower success rate for the IPO, which came in the middle of a bear run at the Nairobi Stock Exchange made worse by a global economic meltdown,” the Daily Nation commented.
On December 22 2008 the Bank went public, listing at the Nairobi Securities Exchange (NSE).
In fact, the Bank’s IPO went ahead to be awarded the Best IPO in Africa in 2008.
Always leading from the front, Dr.Muriuki has steered the growth of the local bank, which now has a footprint in South Sudan.
But for now, the lender’s five-year plan beginning in 2020 is focused on expanding singularly in Kenya with an Aug 2020 move that saw Coop Bank acquiring Jamii Bora Bank, being part of that trajectory.
Meanwhile, besides being the Managing Director of the Co-op Bank, Dr. Muriuki is also a Director of Kingdom Securities Limited, Vice-President Africa –International Co-operative Banking Association (ICBA), former Chairman of, Governing Council of Africa
International University and former Chairman of, the African Rural and Agricultural Credit Association.
Ladies and gentlemen, let’s all arise and applaud a man who has proved again and again that the only limit to our realization of tomorrow will only be limited by our doubts of today.
Dr. Gideon Muriuki - CEO The Co-op Bank
The CEO Cooperative Bank, Dr. Gideon Muriuki