Barclays Bank Botswana Managing Director Reinette van Der Merwe is relishing a robust performance of her bank after steering it through liquidity crisis and an environment of declining bank rate. Where others have seemingly struggled, she has thrived. She talks to KABELO ADAMSON
PATRIOT: This was your first major outside deployment by the group. What motivated you to take this assignment?
I was really excited when they offered me an opportunity because Botswana is a country that is close to my heart. Over the last 20 years I have been coming to Botswana on family holidays and on business, so it’s a country that I really love and also I thought it would be a nice change and a nice challenge for me because I like challenges and it was basically moving from a governance role into a managing director role that is at the forefront of the organisation and it was really an exciting opportunity and I thought I could make a difference and contribute both to the success of the society and the bank.
PATRIOT: How easy was it to adjust to a new culture; both at work and in the community?
It was quite interesting that when I first came it felt like coming home. I grew up in Potchefstroom in South Africa and the environment in Gaborone very is similar to environment where I grew up and the culture is very similar, so it was quite interesting to move to Botswana and really feel at home because the people are so friendly. It has been a really nice experience.
PATRIOT: Compare the bank as you found it and how different it is now; major weaknesses then and how they have been overcame.
I think we have made a couple of big strides. When I came I looked at the strategy and found that the strategy was business sound but it wasn’t being implemented very well. So what we did was to implement the strategy and tweaked a little bit. For example, one of our key focus areas is mining but we were excluding the diamond manufacturing business so we started looking at that and over the last two years, it took us about a year before we actually brought in any of the diamond manufacturers. We are constantly looking at how to fine tune the strategy, but that is basically what we did and also I found a team that was really hungry to deliver and be number one in the market. For me the biggest change is on people, people are motivated and want to be here and be part of the success story. We have also improved customer service and our customers are much happier. You have noticed that in our branch network we have improved the system quite a bit. We have implemented Cash Send at 75 of our ATMs. One of the biggest milestones was Cash Send where you can use one of our electronic channels and mostly people use ATMs to send cash to someone that even doesn’t have a bank account.
PATRIOT: Banks faced liquidity challenges at the start of 2015. Discuss how your bank faced-off and overcame this challenge.
It was quite a challenging time. From a Barclays’ perspective we were really doing well because the treasury team saw that this was going to happen because they could see the rate of growth in terms of lending to customers was growing faster than the rate of growing of deposits we were getting from the customers. So they were preparing for this but there were a couple of things that happened in the market at the same time that caused that liquidity squeeze and some of our competitors were not as prepared as us which then exacerbated the process or the problem, but we actually came through that quite well. We never had any liquidity issues as a bank we were supporting the market in that space. The only impact on us at that point really was the fact that the cost of funds moved up because of competitors having to charge more and pay more for deposits so it became a challenge in terms of the costs associated with that. But I think it was for six months and it was resolved and the Central Bank supported the banks to make sure that we stayed above the regulatory requirement and as Barclays we were one of the few banks that managed to stay well above the regulatory requirement. We did not receive any fine while some of competitors were fined for regulatory breach.
PATRIOT: How is the level of competitiveness in the banking sector?
I find it interesting and there is always going to be competition and you need to stay ahead of the competition. So we are really focused on disruptive technology looking at what the next change that we can make that would really take our service and our products to the next level. That would give us an edge above our competition so we are really doing our best to stay ahead of the competition in this market. But it is good for the consumer that we have competition because it improves customer service.
PATRIOT: Discuss the effect of the constant reduction of the banking rate. What was the rate when you first joined the bank?
In the three years that I have been here the bank rate has consistently changed every year. Last year there was 0.5 percent change in around August and since then the bank rate has been stable. What we have done is to focus on our Non-Interest Income; we focused on value-added services Cash send product. We have diversified our income a little bit away from interest income so that it doesn’t hit us hard so you will see in terms of our financial statements that we have grown our non-interest income by 16 percent over the last year.
PATRIOT: Is your aim of making your bank the ‘Go To Bank’ on course to be achieved? Discuss its different components and what has been achieved so far.
We are on course to be the bank of choice in Botswana and one of our key focus areas to make sure that we are the bank of choice in Botswana is to focus on customer service and how to build relationship with customers and how to help our customers prosper because when our customer prosper we prosper. I have said to the business banking team that they are in the dreams business not in the banking business because they help people’s dreams come true. That is really the reality in that space that if you help a customer in the business banking space from where they started their business to a point of growing into a big corporate business, that customer has loyalty towards the bank because you have supported them to achieve their dreams and success. So it is really about helping our customers prosper and improving the customer service so that we give the best customer service in the market. We are constantly reviewing ways of best serving our customers.
PATRIOT: What is the total level of your infrastructure – number of branches and ATMS across the country?
Number of branches is 34 at the moment and 113 ATMs of which 75 are enabled to receive cash.
PATRIOT: Any plans to open branches in new areas in the country?
That is an interesting conversation. My view is in the next 10 years banks are going to be much more digital and yes where there is need we will open a branch. But if you look at cellphones distribution across Botswana for every one person there are two cell phones in the country. Basically every person has got two cellphones, so the focus is bringing the unbanked onto cellphone banking and using our internet banking services, using cash back at toll points. But the way things are going is much more digital. It is about providing service to our customers and giving access to banking whether through phones, a computer or through a branch.
PATRIOT: The bank has been registering growth in profits for the past two years, how has the bank been able to achieve this turnaround?
It has really been a team effort. It is first about creating a compelling vision for people so that they want to follow that and want to deliver the bank and as I have mentioned, when I came here the team was really hungry to be number one in the market. We also had enormous support from the Barclays Group, from our media partners, analysts and our customers because the bank revolves around the customers. If you give the customers what they need it spreads through the word of mouth. Execution in our strategy also made us a success.
PATRIOT: If it happens that you leave during or at the end of the term of your contract, would you be happy with the shape in which you are leaving Barclays Botswana?
Yes, I am definitely happy with where we are at this point in time; we have grown our profit before tax in the last year to 49 percent and profit before tax sitting over half a billion and our revenue is also sitting at over P1.5 billion. I am really happy with what we have achieved and grateful for the team and stakeholders, especially our customers.
PATRIOT: Tell us about the bank’s community activities.
That is something that is close to my heart. When I came we were not involved in conservation at all and we started issuing the Rhino Debit Card where a percentage of our fees goes for rhino conservation and that is one of the products that I like our customers to take up because it is a sustainable financial solution to make sure funding goes to rhino conservation every year. Also the Kuru Dance Festival has been battling to get a sponsor and I think that is a unique festival that is unique to Botswana. We have been sponsoring it for the last three years. Another event is Madi Majwana where we belive in making a difference through educating the people on financial matters and others.