Equity issues sack notices to 1,200 staff in a single day

James Mwangi, the CEO of Equity Group, said he would be “consistently ruthless” in the purge against unethical workers — making it the biggest staff review at the top-tier bank.

“It doesn’t matter how many I will lose. I don’t even care. I have just started the journey,” said Mr Mwangi in an interview with the Business Daily, shortly after the release of the first quarter financial results.

“I will protect the customers and the bank. If you have ever eaten mama mboga’s chicken, the moment of reckoning has come. I will clean the bank and I will be ruthless. This is not a toll station.”

The investigation focused on employees who received cash from customers or other entities linked to the bank, including workmates, into their salary accounts at Equity Bank or their registered M-Pesa numbers.

Read: Equity sacks workers over suspect accounts, M-Pesa

The sackings come months after the bank lost Sh1.5 billion through a web of fraudsters, with insiders at the centre of the theft.

Equity has given the 1,200 employees a two-day ultimatum that ends today to prove their innocence or exit.

This will mark the latest batch to exit due to integrity calls after Equity sacked 287 workers this month having audited the financial dealings of 708 staff, including top managers.

Mr Mwangi said the staff conduct audit was triggered by customer “whispers of concern” over the integrity of Equity’s workers and the multi-billion shilling fraud cases that hit the group in Kenya, Uganda and Tanzania.

He said the investigation will be extended to all of Equity’s nearly 14,000 workers spread across the seven countries it operates in.

Equity has recently been entangled in court cases where its employees have been accused of theft at the bank. The largest case was the Sh1.5 billion theft that was executed over 90 days and involved the recruiting of targeted bank staff and penetration of the bank's IT system.

The IT system credentials of David Muchiri Kimani -- Equity Bank's manager at the Group Processing Centre, Salary Processing Unit -- were used to process over 40 transactions totalling Sh1,499,465,831.29 before the transfer of the cash to rival banks.

In another court case, the bank is seeking to recover Sh386.5 million from a rogue employee who fraudulently transferred the funds from the bank to several companies.

Mr Mwangi said the staff behaviour audits will now be permanent practice at the bank, akin to performance appraisals, since some staff have “forgotten” what it has taken to build Equity over the three and half decades.

Equity has morphed from a struggling building society in 2004 to Kenya’s second-most profitable bank with assets of Sh1.74 trillion.

“A brand is a promise kept. An organisation is built by culture and the conduct of its staff. We have displayed our values and philosophies everywhere in our premises. They can’t be for walls; they have to be lived by the people,” he said.

Equity hired a top law firm and audit consultancy for the stealth integrity checks, which have unearthed practices such as some staff receiving money from customers to approve loan requests.

Others have been soliciting money from customers to bank their deposits at preferential rates, according to Mr Mwangi.

In the first cycle, when Equity sent letters to 108 employees to explain the transactions that had been flagged, 40 are said to have opted to resign without putting in a defence while 42 failed to prove the innocence of their financial dealings with customers.

“If you gave a loan and the first transaction from the loan money is to your account, you won’t even want to come before the panel,” said Mr Mwangi.

“If you sold foreign currency to a customer at a lower rate and then there is a transaction from the customer to your account, we can see what you did. If a customer placed a deposit at 12 percent when rates were eight percent then some transaction followed, we can also see.”

The bank has instructed staff to refrain from seeking customers for fundraisers — such as those for bereavements or celebrations.

Read: How rogue employee siphoned Sh387m from Equity Bank

Mr Mwangi said all incidents where a customer wired money to staff immediately after loans were approved and disbursed have been treated with summary dismissal “regardless of the size of the thank you fee.”

He maintained that the sackings are not a redundancy plan, arguing that the bank is in the market for more hires to serve its growth.

“The currency of the financial sector is trust. I made a promise to mama mboga (informal business operators) that when they come, they will get a loan. Taking mama mboga round because she has not paid ‘lunch,’ I won’t take it. This is a course for the customer. I am on the hiring now to replace those (staff he has laid off),” he said.

The fired employees will be offered their salaries till the last day of work, pay in lieu of outstanding leave days, and pay in lieu of one month's notice, less any dues owed to the bank, stated the termination notices.

Previously, it had let go of staff who were listed as defaulters with the credit reference bureaus and those who could not get good conduct certificates from the police.

Equity has sought to strengthen its risk management department by hiring fraud busters and more risk analysts. The bank hired a senior fraud manager for payments and another senior fraud manager in charge of insurance and investment early last year. It also sourced a senior manager for security, governance and technical assurance and a fraud risk analyst.

Yesterday, Equity Group announced a 3.86 percent decline in net profit to Sh14.8 billion for the first quarter ended March 2025.

The fall was linked to an 11.8 percent fall in non-interest income to Sh19.61 billion, even as net interest income rose by 2.6 percent to Sh28.57 billion. Operating expenses reduced to Sh29.49 billion from Sh29.67 billion.

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