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Zambia 2015 | FINANCE | INTERVIEW

TBY talks to Bruce Dick, Managing Director & CEO of Zambia National Commercial Bank (Zanaco), on the bank's goals, tax increases, and the adoption of new services.

Bruce Dick
BIOGRAPHY
Bruce Dick was appointed Managing Director of Zambia National Commercial Bank (Zanaco) in January 2014. He had previously served as Chairman of the Board from 2010 until 2013, and has over 35 years of experience in retail and wholesale banking. Prior to taking up his role at Zanaco, he had been responsible for developments in retail bank investments throughout Sub-Saharan Africa and Latin America.

How has Zanaco progressed toward the goal one million customers by 2015?

At the end of 2014, our customer base was at about 850,000 when we published the numbers. Despite 2014 being a difficult year for us, we still saw an increase in customer base from the previous year. Reaching 1 million customers is still an attainable objective that was refreshed earlier in 2015 with our management team.

How has the mining tax increase from 6% to 20% impacted the banking and finance markets?

The tax increase is putting additional costs on the mining industry, and at the moment they are faced with two issues. One is that the world demand for copper and the price for copper are down, and now with the tax regime change they are getting hit twice. International companies run their businesses in a way that takes into account global factors, and that is not always linked to the development of a specific country. They have shareholders and must make a return on their investment. Zanaco however is a Zambian bank, and our roots are here. We have to live, work, and survive commercially in this environment.

How would you describe your current market within Zambia's concentrated banking system?

This is a competitive market but with high concentration. Effectively, there are four or five banks that control 60% of the market. In a way we are overbanked in the number of players, which is a challenge for the players to be profitable and sustainable. One distinction about the Zambian banking market is that there is large number of unbanked potential customers. We are trying to grow the sector, by reaching out to the unbanked. We are focused on important segments such as agricultural and SMEs as well as retail, corporate and the government sectors. It is about being focused on what you do and doing it well.

How would you describe Zambia's mobile banking adoption?

The penetration of phones is increasing everyday, and it amazes me how much more access even remote areas have. The one thing most people strive to have is a phone, and the price of the technology is decreasing. The most basic banking processes can run even on the cheapest of phones. As we reach out to the more remote areas, we need to provide the fundamentals and security to people to encourage them to bank in their own environment.

How does Zanaco facilitate credit to SMEs?

Entrepreneurs are still struggling to find finances, and this is where we as bank and a sector need to do more. Since entrepreneurs do not have many assets or collateral, giving credit is an investment in the person and their activities, and how successful you think they will be moving forward. Now though, we are seeing more and more businesses that started from nothing but have gained a solid base and even international reputations.

How would you describe the business environment, and how does Zanaco make Zambia a more attractive investment destination?

Investors are looking at the stability of a country as well as commercial opportunity before investing. It is important for investors to find a safe environment for workers, in which government policies are clear and processes are supportive for investments. Providing an enabling environment is something that Zambia does very well; this country gives opportunities for successful business ventures. The role of a bank like Zanaco is to lend capital and support to people making investments in Zambia. We can help provide successful outcomes because we have been here for a long time, we know how the marketplace works, and we have an extensive network to share—we can help in providing the financial assistance to help build a successful outcome.

What are your expectations for the year ahead?

We anticipate this being a challenging year, with many of last year's same characteristics present at the macro level. Profitability will be challenging in the short-term, but in the long-term we see a more solid picture. Next year will be an election year for Zambia, so 2016 may be a bit of a wild card with its own set of circumstances. However, over the next three to five years we have positive outlook.