According to the Standard of November 16, NIC MD’s Davidson’s three–year contract was not renewed by his board of directors owing to escalating costs of the MOVE roll out – and leading to them advertising for a new MD.
The NIC Move was truly revolutionary, it captured the public’s attention and made a lot of business sense to customers at other banks, who then moved their accounts to NIC.
NIC had put together a package that appealed to them – key features were flat monthly charges (800 shillings), 8 a.m. to 8 p.m. and Sunday banking, personal loans tailored to medical, educational, holiday etc. needs (really the same brochure printed several different ways), ATM service, etc.
10 months after the launch of MOVE in November 2003, and with one quarter left in the year, customer deposits stand at 11 billion (up 3 billion so far), loans at 10 billion (up 3 billion), net interest income is 670 m, total is income 867 m, operating expense are 615 m – and profit after tax is now 177 m after nine months.
From NIC 3rd Q results in Nation of November 23, 2004 (‘000 shillings)
Item 2003 September 2004 Proj. 2004
Deposits 7,951 10,936 14,581
Loans 6,896 9,989 13,319
t. income 944 868 1,157
Staff exp 200 198 264
t. expenses 527 615 820
Profit 243 176 234
So while NIC has had an exceptional year with growth in customers, deposits and loans, gained A+ credit rating, won tons of marketing awards (including the MSK Award for Best Launch, its end-year profits will likely not reach those of 2003.
While rock bottom interest rates may be the main culprit, perhaps the NIC Board would feel that this was the wrong time to launch the MOVE product, and may blame the MD for that.