What led to your bank's recent strong growth?
SANJAY RUGHANI Our results for 1Q2017 were positive, and the bank continues to grow, with expectations for further growth in the second half of 2017. We continue to leverage our three business segments: global banking related to the corporate and institutional side, commercial banking targeting high-end SMEs, and retail banking, which deals with both individuals and business banking, the latter being SMEs. We continue to see growth and opportunity in global banking. On the individual side and among some SMEs, there has been a slowdown. In a general sense, the economy is going through a shift, with some uncertainty and challenges. At the same time, there is growing excitement; indeed, we see this as an opportunity for growth. Given that Standard Chartered is a global bank with more than 170 years of history, we have experience in emerging markets that go through cycles, and thus use our global experience to estimate what those cycles mean and how to face them.
INEKE BUSSEMAKER In 2016, NMB was able to grow its profits, balance sheet, and loan portfolio. In 2H2016, we suffered, like many of our competitors, due to illiquidity in the market and were forced to source other, generally more expensive, avenues of funding. Clients in turn struggled to meet financial commitments, pushing up the number of non-performing loans (NPLs) across the board. Our NPL ratio increased; however, fortunately, our existing ratio was exceptionally low—for example, the Bank of Tanzania's NPL threshold is 5% while ours weighs in at 4.8%—and even with the increase it was acceptable. The factors behind our success are our rigorous credit process and follow-up procedures that work closely with the customer to come up with tailor-made solutions. As soon as a customer delays their payments, we contact them and discuss the cause of the delay. We have an excellent loan department processing and deploy good credit scoring tools. Before extending or renewing any loan, NMB checks against the data provided by Tanzania's Credit Reference Bureau. The more information a bank has about a lender, the better credit judgment it can make and the less likelihood of default. More widely speaking, what helps our business and our volume growth is our branch network. Situated in 190 places around the country, we are truly alongside our customers. Improvements in customer service, product customization, cash availability in ATMs, and the quality of our loan officers are equally important in helping us grow in the market.
How have you worked in tandem with the government's efforts to grow the economy?
SR Standard Chartered has exciting plans for the next five years in line with the country's industrialization agenda and a focus on developing infrastructure that can support long-term growth and increase efficiency and productivity. Our model is focused on the private sector, with an emphasis on the manufacturing industry and infrastructure. We continue to restructure our products in order to meet customers' changing requirements. We also have an appetite for projects related to rail, airports, and roads. There is also a major push to drive local industries. We expand our credit business by working closely with the clients as advisors. Ultimately, we want to work alongside the government to bring the population up to middle-income status. The quality and quantity of our resources is undeniable: landmass, commodities for extraction, and human resources. Tanzania also has a privileged geographic location and a relatively diverse economy. In reality, it has not been a smooth process; the government has had to do some cleaning up and reducing bureaucracy and corruption. In the short term, this means a cost burden; however, in the long term this is a great strategy.
IB We have seen both growth and stagnation. For example, in certain sectors SMEs are doing extremely well. 2016 was a bit of an anomaly because excessive droughts across the whole of the southern and eastern region badly affected agriculture, which comprises many SMEs. In 2017, however, it looks as though there will be a bumper crop, and we should expect to see growth in agribusiness, particularly in sunflower oil, coffee, tea, and tobacco exports. Tobacco is a major cash crop in Tanzania, as well as the livelihood for farmers in the western Tabora region. NMB is keen to develop products that suit their needs, as well as prepare them to develop an alternative income source, since tobacco in the long term is not sustainable. Tanzania also seeks to boost agri-processing, rather than just exporting raw crops.