National Bank is celebrating 50 years since its formation. With a rich history behind it, the bank has embarked on a new business strategy to drive its profitability and enhance service delivery. In the following interview with StartUp Magazine, Mr. Wilfred Musau, the bank’s CEO its progresses, successes, innovations and an oversight of what to expect in the years ahead.
- As National Bank celebrates its 50 years anniversary, what is the Bank’s strategy to rebuild shareholders confidence?
We are on a consolidation phase and the full year results are a demonstrable evidence the business strategy is gaining momentum in the envisaged, positive direction. Our focus is hinged on the following:
- To strengthen the operations and policies of the bank
- Taking comfortable risk and secure bank assets and resources
- Provide powerful leadership for enhanced shareholder value and returns
- Responsiveness to market, regulatory and environmental needs
- Develop and leverage on strong strategic partnerships
- Be more efficient
- Build strong relationships with all our stakeholders
- Innovate and grow to our ambition of tier one league
- What is the bank’s strategy in regaining profitability and market share?
At National Bank, value is created through our business model, which acquires inputs in form of financial, manufactured, intellectual, human, social and natural capital – and transforms them through our business activities and interactions to produce valuable outputs and outcomes for the Bank, its stakeholders, society and the environment.
The bank is also looking at increasing its market share and profits with the following in consideration:
- Enhancing our digital offering-products/channels
- The diversification on Non funded incomes,
- Deepening penetration in public sector-digital solutions,
- Focus on key growth segments Agri, MSME’s , NPL recovery to unlock liquidity/capital.
- In the wake of the government capped commercial lending rates, banks have looking to build new revenue streams through various means. What is National Bank’s strategy around the capped lending rates?
We have since diversified our business lines like BANCA, Custody and Fund Management, increased play in the innovation space to grow Non Funded Income and new products as well as improved service levels and efficiency.
- Players in the industry consider National Bank’s entry into mobile banking very late. Why did the bank decide to venture into this line?
Our entry into this avenue falls under our digital bank agenda where we seek to increase efficiency in service delivery and drive inclusive innovative banking. We are targeting usage to increase as we continue to launch new products over this exciting solution
- What are the offering under mobile banking?
In 2017, we had the privilege of revamping our mobile banking service offering in pursuit of expanding our retail banking business. The Bank’s NatMobile offering ( mobile app and USSD *625#), now allows users to conveniently access an array of services via their mobile phones as it opens new opportunities for the bank to grow new revenue streams by deepening its digital banking offerings.
The services available on the NatMobile includes account to account & account to mobile transfers, Pesalink, forex rate information, statement requests and applications for cheque books and Debit Credit cards. Other payment services available are school fees payments, mVisa and Kenya power postpaid.
- What number of your customers do you foresee using this platform?
We anticipate that over 85 per cent of our customers will move to this platform. Currently, 55 per cent of our customers have registered to use our Mobile Banking platform. Utilization is quite good with an average of 6000 transactions performed over mobile banking per day.
- Last year, the bank launched its Small Enterprise Banking Unit. What informed this move? What are some of the oferings under this banking unit?
We revamped our Small Enterprise Banking unit to accelerate balance sheet growth while catering for the financial inclusivity requirements of small enterprises.
Under the Small Enterprise banking unit, we have Jenga Chama, Jenga Kilimo and Jenga biashara plus loan. Jenga Chama Loan is designed to avail financial solution to investment groups of three members and above that meet the group’s specific needs and provide financial advice to the groups that suit the current business environment under Asset financing and capital expenditure. Jenga Kilimo Loan is a financial solution that promises smallholder farmers growth, diversification and consolidation of their farming business under the following funding. Jenga Biashara Plus is a specially designed to cater for the financing needs of upper tier micro-entrepreneurs who own well-established businesses and are seeking to expand their operations.
- It has been 10 years since National Bank introduced Islamic Banking to the Kenyan market. What informed the decision and how many customers do you have as of today?
The Islamic Banking Unit was introduced as part of its transformational strategy that would see us introduce and implement a robust Sales Model and Product innovation with tailored Customer Value Propositions (CVPs) for different customer segments.
Last year, the bank opened 25,000 accounts in its Islamic banking window, National Amanah, almost 19,000 of which are held by non-Muslims.
- What are some of the misconceptions around Islamic Banking?
- Myth: Those Islamic banks do not have any dealings with non-Muslims. Fact: Islamic banks are open to all irrespective of religious background; used by many non-Muslims, and exist in various non-Islamic countries.
- Myth: Islamic banks do not deal with or do business with other conventional banks. Fact: No harm as long such dealings do not involve any matters repugnant to the requirements of the Sharia.
- Myth: Islamic bank does not employ non-Muslims. Fact: Talent is sought from all persons depending on their capacity to add value to the institution irrespective of their religious background, color or creed.
- Looking at your customers numbers, would you say that Kenyans have gained confidence in Islamic Banking?
Yes, the confidence in Islamic banks has increased within the financial market. The success of Islamic Banks came to the fore when they were largely sheltered from the Global Financial Crisis, which affected most conventional European and US banks. The absence of some of the more complex derivative transactions that were partly responsible for what happened with Conventional banks are absent in Islamic Banking making it easy to conduct checks and balances.