BY VICTOR ADAR
It is not every time that you will share a room with inspiring industry leaders. You have probably admired how some individuals would take photos with corporate captains.
Or, if you frequent formal dinners, you will hear those who are after the “how to” talks, often seeking ideas on how career x or y can be forged.
Recently, when KCB launched its half-year financial report, it was not one of those days for one to better his or her personal growth but rather a chance to talk about performance and what it will take to grow balance sheets in the midst of a quite tough business environment. With end year on horizons and half-year results announcement now behind us, Kenya Commercial Bank Group chief executive and managing director Joshua Oigara talks about a 5% growth in after tax profit to Sh12.7 billion for first half of June 2019.
Mr Oigara detailed what the bank has done to perform well, citing increased mobile channel activity and cost saving initiatives, just to mention a few. He is on the driving seat of a bank which is not only growing on increased deposits but also currency mix (of dollar and Kenya shilling) and commissions from lending platforms such as Fuliza.
Transactions done outside the branch, which he says increased to 96% of total transactions, up from 87% in 2018 thanks to investments in technology, also made the bank realise good performance. This mobile channel mainly pushed efficiency making it easy for customers to access financial services through their mobile phones.
“KCB is along term business,” says Oigara. “In terms of the ambitions that we see, we’ve remained resilient in our business and it is how much progress we are making in the last quarter; when we look at whether it is customer profile, what we are building our businesses on, our market share remain strong. I’m a strong believer in shared value and you’ll see what we are doing.”
Notable contributions from Mr Oigara apart from a push to lower the interest rates which for a long time has been giving businesses, particularly, the tiny players sleepless nights has been diversification and regional expansion, which he believes will pay off. Although KCB operates subsidiaries in Burundi, Rwanda, South Sudan and Tanzania, for Oigara, making careful steps to steer the bank to greater heights has meant that the bank taps the Ethiopian market.
We remain a number one bank whether you look at it from an asset point of view, from a customer deposit point, or even in terms of total advances on a year on year balance sheet
With new markets like the one that has just been created in Ethiopia, the race to big growth is still in the horizon. Many people see this horn of Africa country as a hot market especially for financial institutions – Ethiopia’s Central Bank is embarking on opening up its economy, now giving financial services licence to foreign companies with KCB being amongst the first companies to be licenced to operate their ventures there. If at all, KCB wants to hit the ground running, it has the option to partner with an Ethiopian bank, or to just go ahead and start off a subsidiary in Ethiopia.
“The financial sector doesn’t just change overnight so like leasing as a model of doing financial service in Ethiopia as a new area has always been open and we see new entities going into that market. The exciting part is to see the migration from leasing into real financial services,” Oigara says.
For someone who understands financial investments as well as the dynamics involved, the chief executive tells a story of investing in a market they understand too well. Before entering a new market for example, he believes that it is important to first understand the nature of business and customers’ expectations on the services that will be offered.
A common phenomenon of companies that collapse soon after entering a new market is usually lack of strong financial muscle. Additionally, expansion is generally premised on strengths and opportunities. Which means, a company can set up shop in a new country, for example, but without enough financial backing, scaling up becomes tough, and can even end up into loss of meaningful employment. Why now? Is KCB too big to fall? Does it have critical backing? Will it stay in business?
“We remain a number one bank whether you look at it from an asset point of view, from a customer deposit point, whether you see it from an investment from a shareholder capital that we have or even in terms of total advances on a year on year balance sheet is really seeing building what I call as a one trillion balance sheet in the next two to three years in our enterprises,” he says.
Another long overdue idea for a man who was appointed KCB CEO in November 2012 is filling the unmet demand: creating jobs. He is driving the bank to Young Africa Works, which is a MasterCard Foundation global programme that seeks to empower young entrepreneurs to spur job creation.
“If you create those jobs in five years, and they are formal jobs, which means they are paying more than a minimum wage, we may actually be one of the single largest catalyst of job creation for younger people.”
