Let’s start off with why Absa Group is involved in this B20 summit.
When we decided to participate in B20, it was largely because we’re a pan-African bank, and this story being an African story with having a G20 for the first time on the African continent, we felt that it was quite important that we could bring all the African voices into the discussion.
We see Africa decisively from an Absa perspective as the space we would want to grow in. And we are very deliberate about solving African stories.
How does Absa’s recent acquisition of Standard Chartered’s retail and wealth business in Uganda strengthen your East African strategy, and what specific advantages does it unlock for Absa?
The most obvious advantage is scale; we’re able to get to a lot more people, and SMEs as well.
We’ve been able to get some more individual, SME and wealth customers. But I think East Africa in particular, what we want to see out of this is a large local corporate development, ease of trade within the East Africa region, so that you can connect your clients, not just in Uganda, but clients that are growing into Kenya, Tanzania and DRC in quite a seamless way. And for us, that’s really the opportunity to be able to impact at scale.
Beyond Kenya, what makes East Africa the most compelling growth corridor for Absa, and which markets are showing the strongest momentum?
I think from our operations, Kenya remains very important overall and is a huge market. And we do have quite a big market in Tanzania that we see as a growth engine, and it is very open to doing business. The Tanzanian ports are going to be very exciting from that perspective.
Uganda is a formidable country, and we’ve actually grown more in the corporate and investment banking business just because of the growth that we’re observing in the Ugandan market.
The benefit of having our businesses in East Africa is that, where we don’t have a presence in a market like DRC, we’re able to support our clients in those regions that we don’t have a presence in.
So even though we don’t have Ethiopia or Sudan as our presence markets, Kenya becomes quite a big business to actually advance regional businesses into East Africa. So our approach is to go where our client is.
We use proximity to get us to a place where we might decide to set up a representative office, or we might decide to grow.
Absa’s B20 Summit theme emphasises banking systems that power innovation. How is Absa deploying digital tools such as AI, data analytics, and ecosystem partnerships to build more resilient and future-ready financial systems in East Africa?
Firstly, I think we always have to locate Africa in its age median, which is about 19-20 years.
Tribunal Backs URA in UGX 10.2 Billion Century Bottling Tax FightIt’s a digital population that’s grown up in a way where you get your information on your handset, and you get information a lot more readily available than previously.
And banks are essentially technology companies that want to be able to solve problems using data and AI, and are trying to connect systems to be able to solve problems a lot faster within the communities that we have.
But Africa is also a space where we have small businesses evolving, entrepreneurs, SMEs, that we think will scale into much larger corporates or regional corporates. And when you start that journey from the individual, your propensity to be able to grow with your individual partner into Africa’s growth trajectory is very big.
So for us, generative AI and digital capability allow us to get a much better understanding of our customer so that we can grow and solve problems together, which will solve some of the problems that we have in the continent, whether it’s energy, food security, or trade complexity.
Are there live examples where you’ve embedded emerging technologies in your operations?
Absolutely. I mean, in our retail businesses, we’ve gotten into spaces where we can hyper-personalise our proposition towards the client. In the corporate space, we’re able to solve the client’s problems using their data and our own data. And from a client perspective, information is so readily available.
How you use that data to monetise both for the client and for us, and to also connect different clients, is quite important. We’ve been able to do that a lot across the continent.
Dollar shortages, regulatory fragmentation, and currency volatility remain major hurdles. How is Absa helping clients navigate these risks, and how do you de-risk your own balance sheet in such environments?
Look, we actually have very close relations with regulators. We have the ability to have discussions around the impact of foreign exchange not being available, both to the economy and to the country.
We are pivoting to local currency funding because I think African banks need to get more comfortable with local currency funding, but we also have capabilities within our foreign exchange swaps.
We have set up a lot of our East Africa custodial businesses, and you would use your custodial business to do your foreign exchange. But that access to the public sector and really being able to influence the inability to do foreign transactions has been one of the things that we’ve used as leverage within the banks.
But we are very excited about looking at local currency funding, both for ourselves in terms of de-risking, but also for Africa.
I think we have to be a lot more deliberate in accessing or at least getting capital markets within the African region, and also looking at local currency funding to have a natural hedge within your business.
