Equity sacks workers over suspect accounts, M-Pesa

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.

Workers who could not explain the sources of cash in their salary accounts have been issued employment termination notices, with a window to appeal within 14 days to the bank’s managing director.

The total number of staff affected by the purge, which touched nearly all branches in the country, is yet to be disclosed.

James Mwangi, the CEO of Equity Group, said the restructuring was ongoing and targeted workers cited for conflict of interest.

He emphasised that the sackings are not a redundancy plan, arguing that the bank is in fact planning to hire more workers to serve its growing customer base.

“We have pushed the brand, it is now Africa’s top-rated financial brand and second globally. It will never survive if its people contradict it,” Mr Mwangi said.

“So this year we did not only audit competence and capabilities to see whether you are fit for the next 10 years, to determine whether to retire or reassign you, but we also checked ‘are you conflicted? Can we trust you? Can you uphold our currency of trust?”

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

“In Kenya, it was a payroll of Sh1.5 billion, so that is what triggered us. If a staff member can do this, how many others can do it? It prompted us to ask the question of conflict of interest,” said Mr Mwangi.

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.

The investigation into cash movements on employee accounts followed this theft.

“It was established that you received amounts into your account number and/or M-Pesa number account under circumstances that were irregular and unethical and which involved and/or were connected to bank customers or entities with a relationship with the bank,” said one of the termination letters seen by Business Daily.

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“Consequently, management has decided to terminate your employment effective immediately in accordance with the provisions of the bank’s Consequence Management Policy.”

The employees fired in the wake of the audit were from both the bank’s head office and branches, numbering about 195 and spread across the country.

Sources familiar with the matter reckon the investigations scanned employees’ bank accounts in the two years to December.

It demanded that workers explain in writing any money wired into their accounts above their salaries, before face-to-face interrogations by a special disciplinary committee for those who offered unconvincing explanations.

Staff started receiving the termination notices from last Tuesday, marking one of the biggest sackings at Kenya’s second-largest bank by assets.

“Your actions mentioned above amounted to gross misconduct and are contrary to the Group’s code of conduct and work ethics. Your actions have also undermined the trust the bank had in you as its employee, making your continued employment untenable,” states the termination letter.

Sources say the purge has affected managers and rank-and-file workers. Equity says the integrity checks extend to its subsidiaries outside Kenya.

“The screening is complete, now it’s engagement and you are shown your picture and you are asked how can you change? It is not about sackings. It is also mentoring; how can we help you? But if you are conflicted, then you have to leave,” Mr Mwangi said.

Equity Bank 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.

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.

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.

The purge comes in a period when banks have been laying off staff as they turn to technology to deliver services and lower employee costs.

Equity’s employees stood at 7,763 in Kenya as at the end of 2023, compared to 8,178 a year earlier, reflecting a drop of 5.0 percent. This saw its staff costs drop to Sh17.5 billion from Sh17.7 billion a year earlier.

The bank has the largest customer base in the country, with 12.9 million clients banking with it.

It 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.

Beth Githinji was hired from the Central Bank of Kenya, where she served as director for internal audit and risk management, to be its chief internal auditor.

The bank said it was beefing up its internal controls as it expanded in the region with subsidiaries in Uganda, Tanzania, South Sudan, Rwanda and the Democratic Republic of Congo.

Equity Bank Kenya reported a net profit of Sh24 billion for the year ended December 2024, which was a 9.7 percent drop from the previous year. At end of year, the lender had a loan book of Sh422 billion and a deposit base of Sh643 billion.

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