Equity Bank Sacks 195 Employees in Internal Fraud Crackdown

Equity Bank Kenya has dismissed approximately 195 employees following an extensive internal audit that uncovered suspicious transactions through the workers’ bank accounts and M-Pesa wallets.

The terminations, which began last week, are the culmination of investigations initiated on April 14 as part of the bank’s broader efforts to address conflict of interest concerns among its staff.

The investigation specifically targeted employees who received unexplained funds from customers or entities connected to the bank, including fellow employees.

“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,” said James Mwangi, Equity Group CEO, confirming the restructuring.

“This year we did not only audit competence and capabilities but we also checked ‘are you conflicted? Can we trust you? Can you uphold our currency of trust?’”

The unprecedented purge follows a major fraud incident where the bank lost Sh1.5 billion through an elaborate scheme involving insider participation.

According to Mwangi, this significant theft triggered the comprehensive investigation into employee accounts.

“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 question conflict of interest,” Mwangi explained.

The Sh1.5 billion theft was orchestrated over 90 days using the IT system credentials of David Muchiri Kimani, Equity Bank’s manager at the Group Processing Centre, Salary Processing Unit.

His credentials were used to process over 40 transactions totaling nearly Sh1.5 billion before transferring the funds to competing banks.

In termination notices issued to affected employees, the bank stated: “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.”

Sources familiar with the investigation indicate that the audit examined employees’ bank accounts dating back two years to December 2023.

Employees were required to provide written explanations for any deposits exceeding their salaries, followed by face-to-face interrogations for those whose explanations were deemed unsatisfactory.

The dismissals have affected employees across the country, spanning both the bank’s headquarters and branch networks.

Both management personnel and junior staff have been caught in the purge, which represents one of the largest mass terminations in the history of Kenya’s second-largest bank by assets.

Terminated employees will receive their salaries until their last working day, payment for outstanding leave days, and one month’s notice pay, less any amounts owed to the bank, according to the termination notices.

Equity Bank maintains that the restructuring is not a redundancy plan.

Mwangi emphasized that the bank actually intends to hire more staff to serve its growing customer base of 12.9 million clients.

“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,” Mwangi stated.

In response to the fraud incidents, Equity Bank has taken steps to bolster its risk management department by recruiting fraud prevention specialists and risk analysts.

Recent hires include senior fraud managers for payments and insurance, a senior manager for security and governance, and a fraud risk analyst.

The bank also appointed Beth Githinji, formerly the director for internal audit and risk management at the Central Bank of Kenya, as its chief internal auditor.

These enhanced internal controls come as Equity Group continues its regional expansion with subsidiaries in Uganda, Tanzania, South Sudan, Rwanda, and the Democratic Republic of Congo.

Despite these challenges, Equity Bank Kenya reported a net profit of Sh24 billion for the year ended December 2024, though this represents a 9.7 percent decrease from the previous year.

At year-end, the lender maintained a loan book of Sh422 billion and a deposit base of Sh643 billion.

The bank has confirmed that similar integrity checks are being conducted across its subsidiaries outside Kenya as part of its commitment to upholding ethical standards throughout its operations.