Mar. 7, 2020


Rui Barros

Mozambique

Rui Barros

CEO and Board Member, Absa Bank Moçambique

“Absa is the fourth-largest bank in Mozambique, with a 7% market share.”

BIO

Rui Barros is CEO and Board Member of Absa Bank Moçambique S.A. and Non-Executive Director of Global Alliance (a leading insurance company in Mozambique, part of Absa Group), he has almost 20 years of diverse financial services experience, with the last 10 focused in Africa. Previously, he has served as Director of Structured Finance for Lehman Brothers and as credit analyst at Fitch Ratings, and later held executive positions as Head or Risk at Standard Bank in Mozambique and Atlantico Europa in Portugal. He has also lectured in financial markets at several portuguese universities in post-graduate programs. Rui graduated in Economics at UTAD and holds an MSc in Finance by the Portuguese Catholic University.


What are the pillars of Absa's strategy in Mozambique?

Absa Group is one of the larger financial institutions in the continent, where it operates under full banking licenses, insurance businesses, asset management, and investment banking services. The group's strategy is adapted to each country of operation, responding to local needs. Absa is the fourth-largest bank in Mozambique, with a 7% market share. Corporate and business banking—especially our premier and prestige offerings—have been the source of our success in the country. We pride ourselves on the relationship we have cultivated with the investors that have chosen us. The relationship banking type of client tends to be an affluent one who is tech savvy and insists on uninterrupted and direct access to their portfolio via multiple digital channels. Progressively, clients are preferring face-to-face relationships for advice, recommendations, and clarifications, while giving preference to digital channels for all transactional and information-gathering activities. Relationship quality and customer care are the cornerstone of our success. Broader retail banking is not a core market in Mozambique yet, though significant investment is being made in the retail business as we prepare for rapid growth in the years to come. At the end of the day, Absa is an African bank with links to the globe; our mission is to serve the growing needs of the African market and connect it to the world. Thus, delivering to a Mozambican mass consumer market will be undoubtedly a priority in the next future.

How has the bank incorporated internet and the digital world in its offer in Mozambique?

The digitalization of financial services will continue to be the main driver of our growth and expansion, while we promote the bancarization of the Mozambican population. We offer a full range of digital solutions from internet banking—differentiated for individuals, SMEs, and large corporates—to mobile banking for basic USSD and smartphones. However, we have also partnered with two of the larger telcoms in Mozambique to expand our own mobile money wallet offerings and link it with theirs, making the flows of funds seamless in these digital ecosystems.

How did the recent mega-rebranding from Barclays to Absa in 2019 affect your image in Mozambique?

We have received extremely positive reactions, and our market share has grown accordingly. This marks the beginning of a new chapter as we adopt our parent company's name and brand while retaining our unwavering commitment to Mozambique and our customers. The separation presents a strategic and operational opportunity to effect improvements, with the majority of technology infrastructure and systems being replaced and refreshed with transformational elements. The brand itself—the red logo and simple letters—has sent a positive image of Absa to the market as a bright, fresh, tech-savvy, and more African in a way. It appeals to a younger, tech-driven crowd and talks to a new generation of corporate. The brand is new, but it is just an element; the team is the same. Crucially, what has remained unchanged is our relationship with investors.

What are the risks and opportunities in the Mozambican market?

Clearly, Mozambique stands out for its tremendous economic and social growth opportunities driven by LNG projects. These will allow the private sector to leapfrog and gain scale. In addition, the value of gas revenues will represent a short-lived gain through capital gain taxes; it will be up to the government to reinvest this money in a way that can best target development goals. All these come with huge risks connected to redistribution of wealth and the “resource curse." However, politically neutral institutions such as the central bank, as well as donors such as Norway, have been centrally involved in the process of assisting the state designing a strategy for sustainable development, so I am confident Mozambique will not see the same scenario that has characterized other resource booms in African countries. More importantly, the shock of gas revenues will eventually slow down and turn into a more low-key, yet sustainable opportunity for development, with the creation of jobs, infrastructure, economic diversification, a domestic robust market, and greater social equality. I am excited to see how this will all look in 30 years. For this to happen, the country must take the right investment decisions now. We are already seeing huge investments in the economy. 2020 will be a year for foreign investors to be in Mozambique. From Absa's perspective, we are centrally committed to supporting the sustainable development of Mozambique, feeding the LNG projects as well as the whole supply chain. Through the years, the group has developed an ambitious growth strategy outside South Africa. We grow with the countries in which we operate. Clearly, Mozambique presents great growth opportunities, and we expect it to be one of the top three markets in corporate and investment banking for Absa Group.

What opportunities will be opened through the agreement signed with the Multilateral Investment Guarantee Agency (MIGA)?

MIGA will issue guarantees of USD497 million to Absa. The guarantees are valid for 15 years and apply to Absa's subsidiaries in Ghana, Kenya, Mauritius, Mozambique, Seychelles, Uganda, and Zambia. This agreement is in fact another enabler of our growth, and other than the obvious balance sheet impact, it will add value in our corporate citizenship identity. Under this agreement, the bank will be able to increase sustainable financing for corporates and SMEs, as well as projects with climate benefits. The transaction also gives Absa Mozambique access to MIGA's expertise in applying global best practice social and environmentally responsible lending principles. It will also enhance the bank's offering to clients, as we are able to extend the global best practices and social and environmental expertise gained by MIGA to our clients, to aid them in their journey to have a positive environmental and social impact. In this respect, I want to also highlight the recent agreements with CDC—the impact investor vehicle for the UK government—to support mainly SME trade finance in the region, where again Mozambique will play a major role. CDC has committed financing of USD100 million in external trade through Absa Bank.

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