It is that time of the year when commercial banks publish their financial results showcasing their performances for the preceding financial year. A number of them have already done so with Nedbank following suit this week. The Lesotho Times’ (LT) Chief Reporter, Mohalenyane Phakela, sat down with the captain of the green ship in Lesotho, Nkau Matete, to unpack the bank’s stellar performance in the last year and to catch a glimpse of what lies ahead for the bank in an ever changing world requiring constant innovation and meticulous pedigree, particularly in the ever evolving commercial banking sector in the age of 4IR. Excerpts:
LT: Lumela Ntate Matete, how did Nedbank Lesotho fare in the last year in terms of its overall performance?
Matete: Khotso Ntate Phakela, we at Nedbank Lesotho are proud of the results we attained in our just ended financial year, particularly because they are a true testament to some of the key decisions we have implemented as a bank in a very challenging post-pandemic era. It is certainly pleasing to report a 75 percent increase in Headline Earnings (a company’s earnings that pertain to its core business activities). Events which completely ravaged the global economy like Covid-19 followed by other global factors such as the war in Ukraine have been well documented. We are happy that we have been able to override these storms. In the last three to four years, the current dwellers of planet earth have been exposed to a more practical experience of how interlocked our planet really is. The effects of incidents on one part of the globe (such as the war in far flung Russia/Ukraine) can have significant impact on the way of life in other corners of the planet…… We are truly one planet and one human race facing our struggles together. This is a very instructive lesson we have learned from a number of recent global vicissitudes.
The volatility of global economies certainly may have catastrophic implications. However, true to the human spirit, when faced with adversity and uncertainty, the human mind rethinks and evolves. And we begin to see the emergence and exponential growth of new markets, new industries, new ways of doing business, and indeed closer to home, new opportunities for Basotho businesses to position themselves for the future. We are pleased to have a healthy list of Basotho traders of all scales banking with us. In essence, ours is a bank that sees clients more as partners in our business aspirations than just clients to be served. We invest ample time and expertise in ensuring that our clients get the best deals for their continued sustenance and growth because their growth is inevitably our growth. We treat our clients as business partners…Indeed they are our partners on the basis of which we build our models.
Consistent with the good work we have done in the business space, we are also particularly proud of the tremendous enablement we have achieved for our individual clients in what we term the retail banking space. This key function of our business is where we house individual accounts, private banking, and small, medium enterprises. Our branch network is a major part of our distribution solution, which is significantly enhanced by our leading digital solutions for all client profiles. We rolled out a solution that remains close to many a Nedbanker’s heart. The Lesotho government, and indeed the Central Bank of Lesotho, have continuously echoed the need to ensure that all people are financially included and enabled to participate in the Lesotho economy. Our response to adding substantial inclusivity is the Nedbank Mobi Money app, a self-enrol solution which requires one to have a cellphone and valid national ID number only. It doesn’t require a formal bank account and it ensures everyone is involved in bank facilitated transacting without the rigidities of opening a formal bank account …..There is no better way of achieving inclusivity in banking….
LT: What would you say was your winning formula in 2022?
Matete: First, I am grateful to be at the helm of such a richly decorated entity, a true symbol of longevity and resilience in the banking space. Over all phases of her history, Nedbank Lesotho has remained a symbol of excellence, a place where individuals, societies, and businesses of all sizes simply know that their money is in good hands. We are humbled by the fortified blueprint and incredible etiquette in which our bank continues to treat clients. This is part of our signature as a leading place of excellent service for clients across all the different segments which we serve.
Secondly, a lot of work and reinforcements have been done in response to severe changes in our human capital. We have had some departures in key areas at the most senior levels, all in good faith. While all departures were certainly concerning, we have continued to embrace the wisdom which we got from our former family members, while also entertaining the advent of fresh perspectives, and indeed utilising the said changes to knit us more closely together to win as a team. I am very grateful for the teams across the business, I am assured that we share a common vision, and that we continue to take deliberate steps to ensure that the business is best-placed to deliver value to individual and business clients, shareholders, staff, and all other stakeholders. We remain committed to the cause.
Another key enabler which yielded positive results is key partnerships. We are for strategic alignments and we do recognise the value in synergistic approaches.
LT: Lets shift a little into the inflation issue. The Central Bank of Lesotho has from November 2022 increased the prime lending rate at least three times…. How has that affected your clients in view of all the attendant interest rates increases….?
Matete: The banking business is about taking money from those who have and giving it to those who do not have and this is facilitated through the loan system. What happens is that when the lending rates go higher, it means we will charge more. Unfortunately, it is not a sustainable strategy because within a very short period of time, payment of loans will be unaffordable because interest repayments keep rising. Those who have not yet borrowed money may refrain while it becomes unaffordable to those who already have loans. We have to ensure that we balance (all these facets) so that the bank becomes sustainable.
LT: When you look at the (comatose) economy of the country, what do you think needs to be done to sustain and reboot it?
Matete: That is a million-dollar question. For the economy to function and grow, you need more people to function in it. If you have high unemployment, it means you have fewer people who engage in any significant economic activities due to lack of income. You need to address that as a government by attracting direct foreign investment (FDI) so that we have more people who come into the country to open factories to hire Basotho. We also need to target those sectors that have the likelihood of growth so that they can absorb more people into employment. For instance, the factories are always criticised but if you look at the number of people that are absorbed by them, it’s overwhelming.
We also need to look at agriculture, mining and construction investments. The government needs to be offloaded in terms of employing people. It may be the biggest employer, but the challenge is for them to pay those civil servants’ salaries. They (government) have to get that money from somewhere, which is the private sector through tax revenues. This means the private sector has to grow in order to pay more taxes. If it fails to grow, then the tax base shrinks and that is a major problem.
What I like about the recent budget that has been passed is that you saw the deliberate approach to have more money directed to capital projects, which by their very nature will employ more people and facilitate trade. I want to take this opportunity to applaud the government. They have increased the capital expenditure a bit. Another good thing which was done by the Minister of Finance (Retśelisitsoe Matlanyane) which is applaudable is that they will create a fund to retain some of the income, from sources like the Southern African Customs Union (SACU), for rainy days. That ensures that whenever there are bad days, such as we saw with Covid-19 and the Russia/Ukraine war, we at least have resources to utilise in riding the storms when the economy declines and cannot generate much.
LT: In your view, what strategies could boost the private sector?
Matete: What is needed in this country are many things. We need to produce things ourselves in order to reduce on the imports so that money circulates within the country. Let us boost agriculture which can contribute immensely in boosting the economy. The government needs to support the private sector. It needs to invest in infrastructure like roads, water, electricity among others. It is very difficult to be competitive without proper infrastructure. We need to invest in the right areas to facilitate trade. Our health sector also needs revamping. Let us improve our local health facilities in order to reduce the money spent (for treatment of Basotho) outside the country.
LT: When we look at the rate at which inflation keeps shooting up, bearing in mind those external factors you have mentioned such as Covid-19 and the war in Ukraine as well as the loadshedding in South Africa, which somehow impacts on our economy, how possible is it for our economy to survive?
Matete: Certain things are beyond our realm of control but affect us since we have become a global village. Inflation is the greatest enemy to the economy. It is just a confirmation that demand supersedes supply. We need to ramp up supply in order for prices to decline. Some of the challenges (we are experiencing) date back from the Covid-19 period when several companies shut down. We need to focus on local companies and start encouraging local production to circulate money locally. It may take time to produce giant companies but when you look at small medium enterprises, they can bring a larger impact if they are supported. They have the ability to grow and absorb more workers. I love the fact that agriculture has become fashionable and the youth have shown keen interest in it.
LT: What does 2023 and the near future look like for Nedbank Lesotho? What strategies does Nedbank Lesotho have or will introduce in the near future that are targeted at making your customers’ lives easy?
Matete: We have recently unpacked our digital channels. It has become old fashioned for people to come to a branch every time they need services whereas they can transact in the comfort of their homes. We have a digital strategy which introduced products such as the Money App which enables customers to transact from their cell phones. We also have internet banking which we use mostly for businesses that can also transact from their business premises without physically visiting brick and mortar branches.
Our employees are our biggest asset. We train them to offer the best client services and that guarantees customer satisfaction. I lead a versatile team, a very gender and age balanced team right from the most senior roles and indeed across the different functional areas. I mention this because we do subscribe to the notion that our differences (to competitors) can be our biggest strength. At Nedbank Lesotho, diversity is in our DNA, the participation of women leaders in our structures is very visible, and very effective. We are grateful to have such brilliant minds in our midst.
Looking ahead to the remainder of the year 2023 and beyond, we are committed to delivering market-relevant solutions. We aim to enable a lot more Basotho businesses to participate in big business projects, to upscale their own operations, and to embrace the value in collaborations. A key responsibility which we take on very seriously, is encouraging sustainable business management, adherence to all applicable legislation and financial records keeping. This enables our conversations with potential clients to be even more fruitful as we can help them shape their growth strategies with our proven financing and investment models. We’ll be taking the conversations a lot more to the people on the ground, across the different parts of Lesotho. Our ultimate objective is to become the bank of choice for a lot more clients in Lesotho. We will continue to execute on this mandate with clean alignment to our regulatory requirements. As a responsible corporate citizen, we continue to explore means in which we can use our financial expertise and resources, to support meaningful and impactful initiatives across the land. We are very encouraged by the emergence of many such initiatives, which benefit a lot of people in Lesotho. Our commitment to keeping the market excited and engaged will be seen in our deliberate continuation (of our initiatives) in close affiliation with partners and promotion of platforms that uniquely match with our vision as a brand.
