Standard Chartered is the oldest commercial bank in Botswana, but there is no doubt about it that it has been slow on innovation, including endorsing technology, which is driving modern banking.
This slow reaction has, over the years, led to the bank losing the market share to competitors.
The BSE quoted banking house admits it has been conservative ÔÇöa trait that is also seen from Standard Chartered abroad.
Acting CEO of Standard Chartered Botswana, Michael Wiegand, said the bank is now ‘absolutely’ competitive as it is in the top ‘three’ in all the categories and ‘growing’.
“We are gaining market share because we are driving innovation,” Wiegand told Sunday Standard, adding that they have made tremendous strides in many areas after playing ‘catch up’.
“In many areas, we are the market leader,” he said. “Now we are the best in the market in terms of business you can do over the computer.”
Age wise, the bank is 114 years old and is the oldest; however, over the years, competition has caught up with it as peers adopted technology that allows customers to access banking services over their mobile phones or computers in the office.
The competitors were also faster to introduce new products in the market. But this year it showed innovation as it was the first to introduce salary advance product and open a branch outside the normal banking hours.
Under the salary advance, once a customer signs up for the scheme, they can withdraw up to 70 percent of their net income through either the ATM, mobile, internet, or cheque book.
A single withdrawal fee of 2.25 percent is charged on the customer.
However, the latest financial results show that the bank is moving in the right direction.
The results for the six months ended 30 June, 2011, showed both its wholesale and consumer banking divisions registered an increased business activity while it managed to capture market share from its competitors.
During the period, the bank increased loans to customers by 29 percent to P4.1 billion, while revenues increased by 21 percent to P 419 million.
Consumer banking delivered 28 percent pre-tax profit growth and wholesale banking was up 127 percent while the bank’s profit before tax was up 44 percent to P 176.5 million.
“We have fantastic results. We expect this trend to go into full year,” said Wiegand, adding comparably, the results are ‘growing faster’ to those of the competition.
“Across the products, we have been gaining market share this year”.
In 2011, the biggest growth was lending to companies, small and large, with lending to SMMEs doubling and growth was also seen in financing government purchasing orders.
Strength was also seen in the financing of the mining projects, including participating in Cut 8 Project.
“We are in the right place and right time to where the Botswana economy is going,” Wiegand said.
The bank’s retail has been steadily growing largely driven by service offering.
Banks around the country have endorsed technology with depositors now able to access their cash through suite of solutions, including Orange Money or Mascom’s My Zaka.
Wiegand admitted: “We think mobile payment will be the thing of the future”.
Lack of innovation has previously cost the bank a fortune. In the full year results to December 31, 2010, the company revenue slouched down to n P811 million from P 923 million in the previous year while total profit edged down to P 224 million from P 235 million in 2009.
But since then, the bank has been pushing innovation. It has since launched mobile banking, a service which is offered free to customers. The bank also has an online banking service.
“There is an opportunity to bank the unbanked,” added the acting CEO.
Globally, Standard Chartered is a conservative group, but Wiegand said they are not apologetic about it as they manage depositors’ money and ‘do not want to be reckless with it’.
Wiegand said the bank has also survived the bad debt compared to peers, where there was a spike in bad debts especially at height recession.
The bank took some bad debt provisions in 2009 and was able to release them in 2010. It also stepped up collection, which led to reduced delinquencies.
Standard Chartered Bank will have a first Motswana CEO when Moatlhodi Lekaukau assumes the role early next year and he is expected to take the bank forward.
“We are excited about the individual. He brings with him a great wealth of experience and he will continue to drive things,” Wiegand said.