NBS Bank’s strategy partnership with Netherlands’ Rabobank key in effective digital solutions

NBS Bank’s Board Chairman, Vizenge Kumwenda says one factor contributing to its recent profitability is the Bank’s migration into the digital space which is one of their core focus areas and it is a common denominator to everything they do with support from one of their international business partner, Rabobank of The Netherlands.

NBS Bank plc, one of the registered commercial Banks in Malawi which has one of the largest footprints in Malawi covering key areas of the country is performing financially well as evidenced by its profitability in the year ended 2018 and the current mid 2019 and Kumwenda says their strategy is centered on providing first class service to their clients.

Kumwenda said this after Bank’s 15th annual general meeting, saying they intend to maintain the Bank’s profitability as they believe that sustained increase in profitability is where customer satisfaction will emanate from.

The Bank has issued its Trading Statement for the period ending June 30, 2019 and it advises its shareholders that profit after tax for this period is expected to be approximately 150% higher than the profit recorded during the previous corresponding period.

According to the Bank’s Chief Executive Officer, Kwanele Ngwenya, the company, as according to listing requirements of the Malawi Stock Exchange, is required to publish the Trading Statement as soon as there is a reasonable degree of certainty that the financial results for the period to be reported upon next will vary by at least 20% from that of the previous corresponding period.

“The information on which this Trading Statement is based has not been reviewed or reported on by the company’s external auditors,” Ngwenya said. “A summary of consolidated and separate financial statements of the Company for the financial year ending June 30, 2019 are expected to be published not later than August 31, 2019.”

Under the stewardship of the new Chief Executive, Kwanele Ngwenya, the Bank seems to have gained permanent traction. In December, 2018, which was the first full year under the command of Ngwenya, the Bank registered an after tax profit of over 130% higher than the loss it recorded during the previous corresponding period.

Adding voice to this trend, Kumwenda added: “We believe that digitizing our processes and offering would be the most appropriate way to achieving superior customer service. Our partnership with Rabobank of The Netherlands has been key in coming up with effective digital solutions.

“And also enhancing our employees’ skills is also a key focus area. To this end we have focused on building staff members capacity through knowledge transfer, by way of attaching them to Rabobank.

“Periodically, designated employees are sent to The Netherlands to see how our colleagues do it out there. We believe that capable employees are crucial towards delivery of our strategy.”

He said they in their business development strategy they want to entice high customer service with products and services that quench the needs of their customers. In February, the Bank, which made special extension of its banking hall hours during the festive season up to 6pm, made it official and permanent in five of its branches; Chichiri, Blantyre, Lilongwe Old Town Mzuzu and Zomba.

This is their drive towards transforming the bank and giving customers more flexibility in banking, saying they have taken into consideration to customers who knock off between 4-5pm and would require the services of their banking hall for deposits and withdrawals.

“We extended our banking hours from 3pm to 6pm in selected service centres and to 4pm for the rest. Additionally, we are also open for business on public holidays and on Sundays in selected service centres. So far, the positive customer response to these developments have given us an extra level of business,” Kumwenda said.

On the Reserve Bank of Malawi’s recent reduction of the policy rate, Kumwenda said it has naturally eroded interest margins that they are realizing from lending but there are a lot of positives that they are capitalizing on.

“Reduced interest rates are likely to precipitate a higher demand for loans. Therefore, we want to capitalize on this opportunity by increasing the volume of lending. The good thing is that the volume of loans we have given out for the past two years is probably the lowest in the market.

“Therefore, we have an opportunity to significantly grow our loan book by moving most of our funds currently sitting in the money market investments to loans.

“Secondly, the reduced interest rate is likely to result into reduced loan impairments, because customers will now be able to afford their repayment obligations. This is a positive development not only for us but for the whole banking industry.

“We have also focused more on increasing our non-interest revenue. Our inroads in the digital space and the many non-interest income generating products which we are bringing to the market, such as Bancassurance products, have been key to this strategy.

“We are looking at the reduced policy rate positively and we have positioned ourselves to take full advantage of all opportunities emanating from this development.

 

Some of the services NBS Bank has on offer are EazyBank digital channels which include EazyMobile 322, ATMs, Point-of-Sale machines, Internet Banking and Bank Pafupi agents to avoid carrying large sums of cash which can be a security risk.

 

NBS Bank, a subsidiary of NICO Holdings Plc and is listed on Malawi Stock Exchange, is currently implementing a 5-year transformation plan which it embarked on in 2017 and this Plan is already bearing fruits as judged by profits that the bank has been posting throughout the year from significant losses in the past years.

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