MOVING ON UP

Tanzania 2015 | FINANCE | INTERVIEW

TBY talks to Dinesh Arora, CEO of EXIM BANK, on impressive growth, expansion plans, and aims for 2016.

Dinesh Arora
BIOGRAPHY
Dinesh Arora has a wide range of experience in the banking sector in a career spanning 26 years. He holds a degree in commerce from Delhi University, a postgraduate diploma in financial advising, and has continued studies with CISA and CIA certification. His leading positions in Indian banking firms have included, strategic planning, financial management, credit and risk management, IT, and corporate governance. He has introduced pioneering, technology-based initiatives and credit monitoring mechanisms.

During the first quarter of 2014 your profits rose by 42% YoY. What are the main drivers of this growth for Exim Bank?

Several factors have contributed to Exim Bank Tanzania's exponential growth. Ours has been a story of 'growth by self-evolution.' The bank is uniquely placed in the banking sector which is occupied by over 50 players, with some of the major international names having a direct or indirect presence here. Despite being an indigenous entity, the bank has been able to create its own niche within the short span of 16 years, attaining 5th position in terms of total assets, on a sustained basis for the past few years. The bank enjoys a very strong brand, built over its ability to facilitate and convert 'opportunities into reality' by providing faster turnaround on banking services. It is also known as being one of the most innovative banks in the country, having introduced many new concepts. Be it the pioneering introduction of credit cards in the country (in affiliation with MasterCard International), facilitating the exchequer with automated collections at the prestigious Tanzania National Parks (TANAPA Cards), or being the first Tanzanian bank to establish a banking footprint overseas with the establishment of its first wholly-owned subsidiary in the Union of Comoros, it has remained at the forefront when it comes to creating value for its patrons. With a view to ensuring sustainable growth and remaining among the industry leaders, the bank has embarked upon a transformation drive–with a focus on three key pillars: people, processes, and technology. The idea is to attract the best talent in the industry and retain it, supporting it with the best in class technology, and building strong processes for efficiencies and improved controls. We have sought the assistance of some the world's leading firms as advisors to take us through this process, and I am happy to share that progress thus far has been rather encouraging. We hope to accomplish the task by 4Q2015. The medium term vision is to be a strong regional bank that relies on best practice models. Beginning in 2014, we have started seeing the desired impact of these initiatives. With effective funds management, net interest margins improved noticeably. Non-interest income also fared well, led by treasury and forex gains, and supported by fee income from non-fund business and alternative channels. It is noteworthy that this is despite a jump in operational costs arising due to initiatives as shared earlier. We are hopeful that during the rest of the year we will further strengthen our dedication to our vision.

Can you elaborate on the bank's expansion strategies?

With digitalization transforming many aspects of modern life, it is imperative to factor this phenomenon into the distribution strategy of the bank. While the bank is in a process of crafting its distribution strategy for the year 2015, the focus shall be to further tap the potential within existing markets. The bank will endeavor to establish its base at key centers such as Dodoma and Kahama, while further broad basing our presence in Dar es Salaam, Arusha, and Mwanza. We are also keeping a close eye on regional developments related to the opening up of CAC (Capital Account Convertibility) within the East African region.

What are the main strategic points of your 2016 Vision?

Building upon our ability to provide a faster turnaround and a loyal customer base, the bank revamped its branch management structure earlier in 2014, to become more focused on sales. Common back office activities are being centralized so that the branches will be able to devote much of their time to understanding the needs of the customer and service them in the manner they want. We aim to be the leader in payments and also to increase our market share in CASA by 50% from the existing nearly 5% to about 7%. We have sourced a state-of-the-art 'switch' solution on an outsourcing model, to provide the right platform to not only remain contemporary with the digital world of banking, but for introducing value added digital solutions matched to the local needs, with ease of implementation. The relationship model of managing our corporate, HNI, and SE clients is expected to give us a competitive edge and boost our market share on low cost deposits. Some novel offerings for corporates and retail clients are soon to be introduced.