Question 1: Give us your take on how the current government’s fiscal and monetary policies have impacted the banking sector in Tanzania.
A number of reforms have been introduced to tackle corruption, improve revenue collections and control government expenditure. Whilst these appear to be well intended, they have negatively impacted economic growth, money supply and private sector credit growth.
According to official statistics, GDP growth slowed to 6.2% in Q3 last year, compared with 7.2% in the corresponding period in 2015. Broad money supply (M3) growth slowed to 2.5% and private sector credit growth to 10.3% in the year ending October 2016, compared with 16.6% and 24.6% respectively in the corresponding period in 2015.
This has created significant headwind for the business community in general, as indicated by the increase in the banking sector non-performing loan ratio to 9.06% in September 2016, compared with 6.71% in the corresponding period in 2015.
Nonetheless, the underlying economic fundamentals remain positive, and if the current reforms are combined with structural reforms to improve the business operating environment for the private sector, they should prove beneficial in supporting sustainable growth in the years that lie ahead.
Question 2: To what extent has mobile money services impacted banks’ profitability?
Recent statistics indicate that the number of mobile phone subscriptions in Tanzania has grown to close to 40 million, which equates to 80% of the total population.
Furthermore, financial inclusion is considered to be one of the key drivers of economic growth, and the country’s strong commitment to advancing financial inclusion has led to the promotion of a robust regulatory environment for digital financial services.
We thus view digital banking as a significant opportunity for the bank to broaden its customer base, by partnering with the mobile network operators and other relevant stakeholders to provide innovative, cost effective and convenient financial services.
Question 3: How has Stanbic Bank contributed to overall economic growth of Tanzania and what role has the bank played in its corporate social responsibility?
We are cognizant that in order to achieve our business objectives and aspirations it is imperative that we contribute to the long-term viability and success of the communities that we operate in, by facilitating economic growth and social development.
As a leading financial intermediary in Tanzania, we have played an important role in mobilizing domestic savings and connecting the business community with investment funding via the domestic and international debt and equity capital markets.
In addition, we have assisted government with raising financing for key infrastructural developments.
We have also played a pivotal role in raising education standards in Tanzania, as we strongly believe that investment in education is the cornerstone for future growth and prosperity.
Question 4: Non-performing loans have been a major problem facing banks. How does Stanbic Bank overcome such a problem?
Despite the challenging business climate, which has resulted in deteriorating industry statistics, our non-performing loan ratio at the end of 2016 was within the target of 5% set by Bank of Tanzania.
This was achieved through driving a clear and coherent business strategy across the organization, incorporating appropriate risk appetite.
Question 5: What is the bank’s competitive advantage and where do you see the company in five years?
Our vision is to be the leading financial services organization in our chosen markets, with empowered and inspired people delivering exceptional customer experiences and superior value.
We believe that our competitive advantage is derived from being part of the Standard Bank Group, Africa’s largest banking group by assets, from the quality and commitment of our people, from our sound business model, and from having a clear and effective strategy.
We have an in-depth understanding of the unique conditions, opportunities and challenges that come with operating in the region, where macroeconomic and political stability is supporting strong growth opportunities.
Question 6: With the current ongoing industrialization drive by President Magufuli, how has Stanbic Bank prepared itself to accommodate local and foreign investors wishing to do business with the Bank?
We are committed to supporting government’s objective to grow the manufacturing sector, with a focus on value-addition to the country’s raw materials and products.
Being a member of the Standard Bank Group, we are well positioned to support our customers to access local and international funding pools for new investments, and to tap into domestic, regional and global trade opportunities, by leveraging off our local presence, our extensive African footprint and our global reach.
Question 7: How has the Bank been able to manage its foreign exchange risk?
Our global markets teams in Tanzania and other key financial centers across the world are specialists in the provision of foreign exchange advisory services, and offer a comprehensive range of foreign exchange hedging instruments and solutions.
Question 8: You were recently named Tanzania’s 2016 Bank of the Year; how do you intend to keep the title for this and the coming years?
We are delighted to have received this accolade, which recognizes our on-going investment in improving our customers’ experiences.
Our customers remain at the heart of everything we do, and our focus going forward will be to continue deepening our relationships and constantly raising the bar, to enable us to deliver exceptional customer experiences in years ahead.
Interview by Athanasius Lupatu