Following the successful launch of the
Absa brand in Tanzania, our editor had the opportunity to catch up with Absa
Tanzania Managing Director Abdi Mohamed. In a wide ranging exclusive interview
he was able to share the key highlights of the journey to Absa and the
turnaround in financial performance over the last 4 years.
Q:
What is the status of the Absa brand transition so far?
A:
Three years ago, we set out on a challenging and exciting journey to transition
the Barclays brand to Absa in all our presence markets in Africa. In February
we successfully launched the Absa brand in Tanzania. In the months since then
we have fully concluded our separation programme and are now operating in
Tanzania as Absa Bank Tanzania limited. We appreciate the support and guidance
from the Bank of Tanzania under the leadership of the Governor, Professor
Luoga. I would also like to mention the support of other government agencies in
this process.
Q:
How is the Absa brand performing in Tanzania
A: As
Absa Bank Tanzania, we are well represented within the country. We maintain a
network of 15 branches and 60 ATMs in which 49 are deposit accepting ATMs that
are strategically placed within a number of cities that includes Dar es Salaam,
Dodoma, Mwanza, Arusha, Zanzibar, Moshi, Morogoro, Iringa and Mbeya.
As a Group, we have a presence in 12
African countries and an international representative office in London. We have
almost 41,000 employees, more than 1,000 branches, and approximately 10,000
ATMs. We are one of Africa’s largest diversified financial services groups,
offering an integrated set of products and services across personal and
business banking, corporate and investment banking, wealth and investment
management and insurance.
As an organisation, we believe in
bringing possibility to life. We are here to fulfil the ambitions of our
customers and communities, and we look forward to continuing to build strong
partnerships in both private and public sectors to make this a reality.
In Tanzania Absa has performed well
financially over the past three years supported by the growth in key economic
sectors in the economy as well as an enabling regulatory environment. We have
provided over 500 billion TZS in credit facilities to among others
Manufacturing, Construction, Tourism, Trading and Agriculture since 2016. We
have introduced a Bancassurance unit, enhanced our online and digital channels
capabilities and improved our transactional and card prepositions in both
acquiring and issuing.
As a result of these efforts and
initiatives, we have grown revenues by a Compounded Annual Growth Rate (CAGR)
of 7.2% since 2016. Our total balance sheet has grown from 673bilion TZS to
1Trilion TZS as at the end of 2019. The bank continues to be well capitalized
and has sufficient and growing levels of liquidity to continue serving our
customers.
We have optimized and refreshed our
branch network to be of the state of the art. We currently have six branches in
Dar es Salaam namely Alpha house, Mikocheni, Pugu Road, Slip way, Dar City
Mall, Ohio and nine branches in nine regions namely Arusha , Moshi, Mwanza,
Tanga, Dodoma, Iringa, Mbeya, Morogoro, Zanzibar. We also have invested in top
of the range ATMs with our ATM network now standing at 60 ATMs.
The feedback from our customers in the
latest survey indicates satisfaction with the Absa brand and its services. We
of course continue to research, innovate and improve our offerings to the
market.
Q:
How has the COVID19 crisis affected your business?
A:
Covid 19 as you know is a global crisis that has affected the global as well as
regional economies with global projections indicating a significant impact on
key sectors such as travel, tourism and hospitality. The Tanzania economy has
been more resilient and has performed better than regional peers during the
Covid period, mainly as a result of early mitigating actions taken to ensure a
balanced approach to the crisis.
In the financial services sector, the
BoT and the TBA have taken a leading role in coordinating industry efforts to
ensure the financial effects of the crisis are well managed. Some of the
measures that were issued by BOT to mitigate the COVID-19 impact include:-
Lowering the SMR by 1%, Reduction of
discount rate from 7% to 5%, Reduction of haircuts on government securities,
increased daily transactions limits for mobile money operators as well as
permitting regulatory flexibility in order for banks and financial institutions
to discuss restructuring of loans with borrowers who are facing financial
difficulty due to COVID-19
In Absa we have taken a number of
actions to ensure our staff and customers remain safe in line with Ministry of
Health guidelines. As part of our social responsibility agenda, we have donated
a PPE material (Mask, Sanitizers and Gloves) which was received by the Minister
for Health on behalf of the government of Tanzania.
Recognizing the impact of Covid19 on
some of our customer’s businesses we have instituted a debt relief programme,
in line with the guidelines of the BoT. This is done to alleviate the impact
and after thorough discussion and agreement with the clients. It is also done
strictly in accordance with the existing regulatory guidelines. Under this debt
relief programme we have restructured to the tune of 125Bilions TZS to support
the customer during this time.
We currently planning to partner with
some of our clients to continue to support the Government with fight against
the pandemic.
Q:
You recorded positive business trend last year compared to 2018, registering a
6 per cent revenue growth. What prospects do you have for the coming year as
far as Covid-19 economic crisis is concerned?
A:
During this period the main focus of Absa has been to support our customers in
the most affected sectors to manage and mitigate the business impact of
Covid19. This has been done through not only the targeted debt rescheduling
measures but also through our ongoing technical advice on managing their business
through the effects of the global pandemic. The forward looking projections
depend to a large extent on the success of the global measures taken to fight
the pandemic. The broad consensus at present appears to support a gradual
global recovery starting in 2021 as countries continue to reopen and as global
trade and travel resumes. In Tanzania we have seen relatively less impact on
our economy mainly as a result of the balanced approach adopted with regards to
the issue of shut-downs, the diversified nature of the economy and the
mitigating actions contained in the Bank of Tanzania statement dated 08 May
2020.
The impact of the depressed global
trading environment, the disruption in supply chains as well as the macro
impact of global lockdowns and travel restrictions is expected to have sectoral
impact in certain key sectors. The impact of this on banking sector performance
remains to be seen and is dependent to a large extent on the pace of recovery
and how the global situation unfolds in the coming months. Our focus at present
is to work with all stakeholders and to support our customers through this
period.
Q:
Tanzania is focusing on industrial economy, which relies on agricultural
produce. Do you have intentions of supporting agriculture in the country?
A:
First and foremost, I would like to congratulate our 5th phase Government on
the recent reclassification of the United Republic of Tanzania as a lower
middle income country by the World Bank. This was achieved ahead of schedule
and is a testament to the positive policies in key sectors of the economy such
as manufacturing, agriculture and mining among others.
With regards to your specific question
on Agriculture, the sector contributes 26% to the country’s GDP and provides
livelihood to the majority of the population. Absa is committed to ensure we
support the Government initiative and to date, we have supported customers in
agriculture and the key value chains to expand their factories, buys from
farmers, export, and local processing. Some of the cash crops that we have supported
includes cotton, sugar, cashew nuts and sesame among others.
While we continue to provide this
support, we constantly review any improvements we can make in our offering to
this key sector and you will see more focus on this. In addition to
agriculture, Absa has a wide range of products, services and solutions for all
major sectors of the economy and we have clients in manufacturing, energy,
tourism, construction, health-care, and trade among others.
Q:
As you look forward what should your customers expect from Absa
A:
Absa continues to play a pivotal role in the banking sector and the wider
economy. We will continue in our great tradition to innovate and introduce new
products and services to our customers. We have invested significant amounts of
money to enhance the look and feel of our branches and invested in cash
accepting ATMs. Additionally,
We have obtained a Bancassurance
agency License and are in the course of rolling out to the market. We pride
ourselves in expertise, excellent support as well as convenience.
We have rolled out the first new
vertical Absa card that is contactless. On 24th July, and soon we will be
launching a new card capability that is still speaking of bringing
possibilities to lives of our customers and Tanzania in general.
We are currently upgrading our mobile
banking platform to further improve client experience with new features
including password recovery, improved navigation etc.
We are working on client engagement
channels including WhatsApp banking as well as Interactive Voice Response (IVR)
lines.
We have just introduced a Government
Electronic Payment Gateway (GePG) platform where our customers can now easily
make all their TRA Tax payments through our branches or our CIB Online portal.
Q:
Finally, is there anything that hasn’t been touched upon this you would like to
be mentioned?
A: I
Just want to emphasize on Digitization and that with the future of banks being
digital, we are geared to give our customers products and services that speak
to that, and within the next six months, you can expect to see a lot of
exciting innovations become part of our portfolio.
We will start commercializing our
recently launched Virtual assist (Chatbot) that is available on our public
website and WhatsApp, this will allow our customers to be able to talk to us
24/7
Before end of the year we will be
rolling out of WhatsApp or social banking channel, this will give our customer
ability to perform some banking transactions/services on WhatsApp platform on
their smart phones. We will later extend this offering to other social media
platform like Facebook and Twitter.
Our online banking platforms have been
upgraded to latest cutting edge technologies including finger print
authentication and facial Identification, we will continue to enhance these
channels this year with additional features like real time bank to bank
payments, International payments including standalone application with
international inward remittance capabilities, ability to open a new and
additional account remotely, remote loan top up capability etc.
In the back end of our operation we are
looking continue with backend automation and digitization process that we
embarked a couple of years ago e.g. Scanning and Imaging, Intelligent process
automation and robotics, advanced analytics & data science, Process
redesigning and new platform development to allow new innovations.