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| Abdi Mohamed, Absa Bank Tanzania Managing Director. |
1. You recently published your quarter 3 results. Could you please provide some additional context to the published results?
Thank you – I give credit for this performance to our clients, partners, and my team at Absa Tanzania. In line with our strategy and medium-term plans, our results continue to show strong and consistent momentum. We have shown a 42% year on year growth in revenue driven mainly by strong balance sheet and transactional growth. We have seen continued positive developments in the macro business environment in Tanzania and this has led to an increase in economic activity in the country. At Absa we believe that the financial services sector plays a very important role in facilitating the growth and development of the nation. You will have seen a 21% increase in our lending book as we have enhanced our lending exposures to key economic sectors such as agriculture, manufacturing, oil & gas, trading, tourism, and travel, among others. We have also increased our activity in trade finance to support international trade activities in the country. Additionally, we continue to enhance our strong retail proposition for our personal sector customers leveraging on digitization and innovation.
2. How is the Absa brand doing since you launched the brand in Tanzania in 2020?
The Absa brand as you know is a strong, authentic, and well-known financial services brand in Africa. The launch of our brand in Tanzania was an exciting moment for us in Absa, for our clients and stakeholders. Since then, we have focused relentlessly on delivering great products, services and digital solutions supported by a strong team of professionals. Our total brand awareness and relevance scores continue to increase and now stands at 57%, which means half of the entire market is now aware of our great brand and it has been done in such a short period of time with targets to reach 90% levels within a space of two years to come. This came with few awards such as, by end of 2020 we won The Fastest Growing Banking Brand award (Global Brand Magazine Award 2020) and in 2021 we won the Best Banking Brand (Global Brand Magazine 2021). This year to date, we have just been recognized as the Best Digital Bank (World Economic Magazine Awards 2022).
3. What is your view on the economic outlook and how does Absa plan to participate in key projects?
Tanzania has experienced a period of sustained economic growth and has shown resilience and stability even during this cycle of global economic challenges. The latest Moody’s rating improved Tanzania’s outlook from “stable” to “positive” in October 2022. The strong growth is driven by a set of diverse sectors providing further stability as there is limited over-reliance on specific sectors. Absa continues to re-invest in this market as shown by our total lending exposures which have doubled in the last few years and are now at TZS 612 billion. We have partnered in several public sector projects such as the Standard Gauge Railway (SGR) Project and various other infrastructure projects that are being undertaken in the country and we continue to participate as the projects come on-line.
Through Absa group, we have sponsored Absa Financial Market Index 2022 (AFMI) an annual publication, which is a strategic tool that can be leveraged by policy makers to drive strategic and informed decisions for the development of financial markets which is key in attracting foreign capital flows into African countries including Tanzania. We have made significant investment in Corporate and Investment Banking suite (Products, Channels and Services) to continue supporting the ever-changing customer needs in line with the growth of the economy.
4. You have previously spoken about the subject of financial inclusion and Absa’s plans in this area. Please provide an update – What is Absa doing to ensure more Tanzanians are included in the banking sector?
This subject is very dear to us in Absa. We focus on shared growth and sustainability in all our growth plans. Tanzania is one of the countries that has launched a comprehensive National Financial Inclusion Framework (NFIF – 2018-2022) and we work very closely with the bank of Tanzania and Tanzania Bankers Association (TBA) in ensuring the inclusion agenda is prioritized. As you may recall, last year, in partnership with Tigo and Jumo we launched a mobile based micro lending proposition to support financial inclusion and increase access to credit using the mobile platform. Through this product we have so far served 164,220 of customers in all parts of Tanzania.
5. You mentioned the digital agenda – how is Absa addressing the changing needs of customers in this space?
Tanzania has seen a continued shift in demographics and growth in digital adoption across multiple platforms. Digital innovation is transforming lives in diverse areas such as telecommunication, banking, agribusiness, and healthcare provision. There is a vibrant start-up community and we in Absa have played a role in supporting the growth and development of these startups in partnership with local and international start-up accelerators. With this context of increasing digital adoption, banks must continuously innovate and provide solutions for customers. At Absa Tanzania, we are a digitally led bank. We also innovate and digitize to ensure that our services are seamless and hassle free for the customer. In a bid to cement our digitally led proposition, we have embarked on digital transformation journey that’s inseparable from innovation. During innovation, we have rolled out a range of unique product and solutions that gives us a competitive edge as the most Innovative Commercial bank in the market. We are fully committed to deliver innovative solutions that help our customers get things done and this was demonstrated in 2021 when we won Best Financial Institution in using ICT at the 5thTanzania annual ICT conference organized by the Ministry of Information and Communication Technology Tanzania.
Allow me to mention few products\solutions that are ONLY available at Absa Bank Tanzania.
At Absa, we care about customers' safety; we were the first to achieve fully paper-less branch operations in Tanzania. A move that has created speed and efficiency in service delivery to our customers.
We introduced the first digital queue management in Tanzania, a seamless virtual branch engagement solution: a first ever virtual queue management solution in Tanzania, also knowns as WhatsApp Ticketing.
First QR ATM withdrawal in Tanzania; ATM QR Code Cash withdrawal; For the first time in Tanzania, our customers can withdraw money from any Absa ATM with the Absa Mobile Banking App using a QR code.
We are now introducing an Absa Access Platform, an online platform that integrates financial operations including payments and salary processing to support day to day activities for our corporate and business customers.
The list goes on with several other innovative products like Dynamic currency conversion, bilingual mobile app, etc. As you can see this is an area that has most of our attention far as becoming a number one digitally led bank.
6. What is your comment on the performance of the loan book & NPL
Over the years we have focused on ensuring that we provide prudent financial advise to our customers and have ensured our lending practices follow strict professional assessment of loan proposals. By doing this, we protect our customer’s businesses ensure we minimize credit losses. Our NPL position has continued to improve and is well below industry average at X%. In some of our portfolios the NPL number is well below the required 5% and we will continue to improve this performance.
7. In Tanzania there’s a lot of SME-sector business. How has Absa Bank Tanzania supported them and what are some of the most significant projects with which the bank has been involved in recent times?
In June this year we launched a revamped SME proposition that provides affordable credit to the SME sector. We continue to look at opportunities to partner with funding partners to provide accessible credit for SMEs in this country at least 2000 by 2023. Since the launch of our new SME preposition, we have increased funding to micro-SMEs to boost the business activities. We have dedicated TZS 10billion to support this segment in 2022 and an additional TZS 20billion in 2023. We further support Women Entrepreneurs businesses by providing them with free fee accounts and affordable loans to enhance their business activities that sees to significantly reduce their financing costs and support them where they lack security. In recognition of the unique challenges facing women entrepreneurs, we also launched the She Account on 16 June 2022. Through our Enterprise & Supply Chain Development (ESD) program we work with our Corporate and Commercial clients to de-risk SMEs in their value chains, this includes providing unsecured loans and various trainings on financial, policy and various business development services.
8. In banking industry there are a lot of challenges that customers face, what do you think is your customers biggest problem and how is Absa Tanzania tackling and resolving such problem?
We are in a service industry to begin with, of which, each problem is addressed with utmost attention and focus to ensure we resolve all matters service. To expound on this, we have built customer interface channels that are personalized and provide meaningful experiences through simple and intuitive interfaces on any customer device. As part of our strategy in some areas we have also partnered with fintechs and telcos to deliver superior Customer Experience to our customers. We also understand that we still have a significant portion of customers that still prefer physical location for banking and desire face-to-face human interaction with optimal customer experience, to respond to this, we are seeing it’s vital to blend traditional and digital components to create an efficient omnichannel customer experience that takes account of all customers preferences.
9. How has Absa Tanzania supported the community and society at large far as Citizenship is concerned?
As a purpose-led organization, we aim to become a leading African bank bringing possibilities to life and being an active force for good in everything we do. Corporate Citizenship is our responsibility to society. This in recognition of the fact that we do not operate in isolation of the well-being of structures and stakeholders where we operate and this year alone we have supported our communities in number of areas, and to name a few, we donated 2,500 to the Kilimanjaro region through Regional Commissioner’s office in support of the government’s environmental conservation agenda, our staff played pivotal role in donating blood to the women and children at the maternal ward at the Comprehensive Community Based Rehabilitation in Tanzania (CCBRT) and lastly, we donated TZS 10million to the Family Health International (fhi360) as part of our efforts to support the fight against Covid-19 pandemic by means of promoting vaccination programmes across the country.
10. Any final words on the way forward – what do we expect to see from Absa going forward?
Absa remains a key participant in this economy, and we will continue to play a positive role in providing world-class financial services to our clients. Our purpose of “bringing possibility to life” this continues to be our guiding principle as we participate in the market. You will see our continued commitment and dedication to serve our customers well. You will see more innovation and roll-out of digital solutions. You will see continued focus on our citizenship agenda and our support for the communities.
2. How is the Absa brand doing since you launched the brand in Tanzania in 2020?
The Absa brand as you know is a strong, authentic, and well-known financial services brand in Africa. The launch of our brand in Tanzania was an exciting moment for us in Absa, for our clients and stakeholders. Since then, we have focused relentlessly on delivering great products, services and digital solutions supported by a strong team of professionals. Our total brand awareness and relevance scores continue to increase and now stands at 57%, which means half of the entire market is now aware of our great brand and it has been done in such a short period of time with targets to reach 90% levels within a space of two years to come. This came with few awards such as, by end of 2020 we won The Fastest Growing Banking Brand award (Global Brand Magazine Award 2020) and in 2021 we won the Best Banking Brand (Global Brand Magazine 2021). This year to date, we have just been recognized as the Best Digital Bank (World Economic Magazine Awards 2022).
3. What is your view on the economic outlook and how does Absa plan to participate in key projects?
Tanzania has experienced a period of sustained economic growth and has shown resilience and stability even during this cycle of global economic challenges. The latest Moody’s rating improved Tanzania’s outlook from “stable” to “positive” in October 2022. The strong growth is driven by a set of diverse sectors providing further stability as there is limited over-reliance on specific sectors. Absa continues to re-invest in this market as shown by our total lending exposures which have doubled in the last few years and are now at TZS 612 billion. We have partnered in several public sector projects such as the Standard Gauge Railway (SGR) Project and various other infrastructure projects that are being undertaken in the country and we continue to participate as the projects come on-line.
Through Absa group, we have sponsored Absa Financial Market Index 2022 (AFMI) an annual publication, which is a strategic tool that can be leveraged by policy makers to drive strategic and informed decisions for the development of financial markets which is key in attracting foreign capital flows into African countries including Tanzania. We have made significant investment in Corporate and Investment Banking suite (Products, Channels and Services) to continue supporting the ever-changing customer needs in line with the growth of the economy.
4. You have previously spoken about the subject of financial inclusion and Absa’s plans in this area. Please provide an update – What is Absa doing to ensure more Tanzanians are included in the banking sector?
This subject is very dear to us in Absa. We focus on shared growth and sustainability in all our growth plans. Tanzania is one of the countries that has launched a comprehensive National Financial Inclusion Framework (NFIF – 2018-2022) and we work very closely with the bank of Tanzania and Tanzania Bankers Association (TBA) in ensuring the inclusion agenda is prioritized. As you may recall, last year, in partnership with Tigo and Jumo we launched a mobile based micro lending proposition to support financial inclusion and increase access to credit using the mobile platform. Through this product we have so far served 164,220 of customers in all parts of Tanzania.
5. You mentioned the digital agenda – how is Absa addressing the changing needs of customers in this space?
Tanzania has seen a continued shift in demographics and growth in digital adoption across multiple platforms. Digital innovation is transforming lives in diverse areas such as telecommunication, banking, agribusiness, and healthcare provision. There is a vibrant start-up community and we in Absa have played a role in supporting the growth and development of these startups in partnership with local and international start-up accelerators. With this context of increasing digital adoption, banks must continuously innovate and provide solutions for customers. At Absa Tanzania, we are a digitally led bank. We also innovate and digitize to ensure that our services are seamless and hassle free for the customer. In a bid to cement our digitally led proposition, we have embarked on digital transformation journey that’s inseparable from innovation. During innovation, we have rolled out a range of unique product and solutions that gives us a competitive edge as the most Innovative Commercial bank in the market. We are fully committed to deliver innovative solutions that help our customers get things done and this was demonstrated in 2021 when we won Best Financial Institution in using ICT at the 5thTanzania annual ICT conference organized by the Ministry of Information and Communication Technology Tanzania.
Allow me to mention few products\solutions that are ONLY available at Absa Bank Tanzania.
At Absa, we care about customers' safety; we were the first to achieve fully paper-less branch operations in Tanzania. A move that has created speed and efficiency in service delivery to our customers.
We introduced the first digital queue management in Tanzania, a seamless virtual branch engagement solution: a first ever virtual queue management solution in Tanzania, also knowns as WhatsApp Ticketing.
First QR ATM withdrawal in Tanzania; ATM QR Code Cash withdrawal; For the first time in Tanzania, our customers can withdraw money from any Absa ATM with the Absa Mobile Banking App using a QR code.
We are now introducing an Absa Access Platform, an online platform that integrates financial operations including payments and salary processing to support day to day activities for our corporate and business customers.
The list goes on with several other innovative products like Dynamic currency conversion, bilingual mobile app, etc. As you can see this is an area that has most of our attention far as becoming a number one digitally led bank.
6. What is your comment on the performance of the loan book & NPL
Over the years we have focused on ensuring that we provide prudent financial advise to our customers and have ensured our lending practices follow strict professional assessment of loan proposals. By doing this, we protect our customer’s businesses ensure we minimize credit losses. Our NPL position has continued to improve and is well below industry average at X%. In some of our portfolios the NPL number is well below the required 5% and we will continue to improve this performance.
7. In Tanzania there’s a lot of SME-sector business. How has Absa Bank Tanzania supported them and what are some of the most significant projects with which the bank has been involved in recent times?
In June this year we launched a revamped SME proposition that provides affordable credit to the SME sector. We continue to look at opportunities to partner with funding partners to provide accessible credit for SMEs in this country at least 2000 by 2023. Since the launch of our new SME preposition, we have increased funding to micro-SMEs to boost the business activities. We have dedicated TZS 10billion to support this segment in 2022 and an additional TZS 20billion in 2023. We further support Women Entrepreneurs businesses by providing them with free fee accounts and affordable loans to enhance their business activities that sees to significantly reduce their financing costs and support them where they lack security. In recognition of the unique challenges facing women entrepreneurs, we also launched the She Account on 16 June 2022. Through our Enterprise & Supply Chain Development (ESD) program we work with our Corporate and Commercial clients to de-risk SMEs in their value chains, this includes providing unsecured loans and various trainings on financial, policy and various business development services.
8. In banking industry there are a lot of challenges that customers face, what do you think is your customers biggest problem and how is Absa Tanzania tackling and resolving such problem?
We are in a service industry to begin with, of which, each problem is addressed with utmost attention and focus to ensure we resolve all matters service. To expound on this, we have built customer interface channels that are personalized and provide meaningful experiences through simple and intuitive interfaces on any customer device. As part of our strategy in some areas we have also partnered with fintechs and telcos to deliver superior Customer Experience to our customers. We also understand that we still have a significant portion of customers that still prefer physical location for banking and desire face-to-face human interaction with optimal customer experience, to respond to this, we are seeing it’s vital to blend traditional and digital components to create an efficient omnichannel customer experience that takes account of all customers preferences.
9. How has Absa Tanzania supported the community and society at large far as Citizenship is concerned?
As a purpose-led organization, we aim to become a leading African bank bringing possibilities to life and being an active force for good in everything we do. Corporate Citizenship is our responsibility to society. This in recognition of the fact that we do not operate in isolation of the well-being of structures and stakeholders where we operate and this year alone we have supported our communities in number of areas, and to name a few, we donated 2,500 to the Kilimanjaro region through Regional Commissioner’s office in support of the government’s environmental conservation agenda, our staff played pivotal role in donating blood to the women and children at the maternal ward at the Comprehensive Community Based Rehabilitation in Tanzania (CCBRT) and lastly, we donated TZS 10million to the Family Health International (fhi360) as part of our efforts to support the fight against Covid-19 pandemic by means of promoting vaccination programmes across the country.
10. Any final words on the way forward – what do we expect to see from Absa going forward?
Absa remains a key participant in this economy, and we will continue to play a positive role in providing world-class financial services to our clients. Our purpose of “bringing possibility to life” this continues to be our guiding principle as we participate in the market. You will see our continued commitment and dedication to serve our customers well. You will see more innovation and roll-out of digital solutions. You will see continued focus on our citizenship agenda and our support for the communities.
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