When CEO East Africa Magazine, first interviewed PostBank Uganda’s Managing Director, on his first anniversary as the chief at the government-owned lender, he made it known that one of his key big hairy goals, was to deliver an identical or even better customer experience for the tier-two lender’s customers.
In his scheme of things- a pleasant experience for everyone who got into contact with the brand would deliver him the numbers to replicate and sustain the business. For anyone very familiar with the PostBank of yesteryears, this sounded a little bit far-fetched. But for those who know his track record at Orient Bank where he oversaw a 69.3% growth in assets, underlined by an equally good performance in deposits, lending and profitability, it was not hard to believe him.
“As an employer, before hiring someone, I always believe that the person must have an interest in the role and the organisation. It should not just be about money. To work in an organisation, you must like what the organisation does, you must have an interest and buy into the dreams of that organisation and in this case, PostBank,” he told CEO East Africa Magazine, in an interview.
“If you look at our new strategy, our vision now is: “to be to be a pacesetter in transforming lives and livelihoods”, which is a very powerful vision with a mission of “Offering affordable and sustainable financial services that drive financial inclusion for socio-economic development.”
Armed with this dream, he has spent the last 15 months, working with consultants and the Board of directors- an equally enthusiastic selection of financial, management and governance experts, to put together a team of elite bankers, to bring alive this vision.
Take a look at Andrew Kabeera the Bank’s new Executive Director and Chief Operating Officer who joined PostBank from dfcu Bank, one of Uganda’s top 5 banks where he was the Chief Operating Officer and Chief Change and Innovation Officer. At dfcu Bank, he had just completed the bank’s digitization, centralization and productivity monitoring agenda, saving the bank some UGX15 billion in costs.
Ssenyange Peter, the current Chief Finance Officer, was until June 2020, the CFO for United Bank for Africa for over 4 years.
Martin Mugisha, the Chief Risk Officer, joined the bank in January 2021 from Ecobank Uganda where he was the Head of Credit Risk since February 2014.
Andrew Agaba joined PostBank in April 2020 as the Chief Business Officer from Orient Bank, where he was the Head of Retail and SME Banking.
Judy Namanda Kikonyogo the Chief HR and Administration Officer is one of those who were retained from the old exco- but her role was elevated from just being Head of HR. Before PostBank, in 2013, Judy worked for Barclays Bank Uganda (now Absa Bank Uganda) where among other achievements, she successfully oversaw the merger of Barclays Bank and Nile Bank human capital.
Justine Tumuheki Wabwire, the Chief Legal Officer and Company Secretary who has been with PostBank for the last 10 years was also retained. She previously worked at the Uganda Law Reform Commission as an Assistant Commissioner, Law Revision and before that as a State Attorney at the Directorate of Public Prosecutions. She is a seasoned lawyer and boasts of over 20 years of experience in legal, regulatory, and corporate governance in Uganda’s civil service and the banking sectors.
“Our people strategy is focused on feeding our 5-year strategic ambition to become a fully-fledged tier-one commercial bank. The people we have brought in have come with a lot of expertise in terms of risk management, we needed help there; in terms of portfolio management, IT skills- we had to do a lot of work around our ICT especially on IT security, processes etc,” explains Kakeeto.
The decision to restructure the bank’s structure and disrupt the management composition came out of a comprehensive review, done by a consultant, True North Africa.
“The review was to advise us on how to improve both the bank’s operations and performance,” he explains.
“Amongst the recommendations of the review, was that, for the bank to achieve its aspirations and move forward, it needed to restructure itself,” he adds.
“To fill all the senior executive roles in the new structure, the board decided that they all had to be competitively filled, meaning that they had to be advertised inside and outside the bank. Even those roles that were retained, but had existing holders, they had to be readvertised and their holders defend their roles,” explained Kakeeto, saying the process is nearly complete and the new team is ready to play ball- literally.
“We are at the tail end of the process, and we should conclude it by the end of this month. We now have a full line-up of the new structure of the bank. We have retained some very good talent, but we have also been able to attract particularly good talent from top tier-one banks, such as Standard Chartered Bank, KCB Bank Uganda, dfcu Bank, Bank of Africa, Orient Bank etc.,” he stresses.
“We’ve got a lot of seasoned experienced people. If you look at the profile of our senior management team, it is as good as most commercial banks. It is a very competitive team,” boasts Kakeeto.
Shedding off ‘excess fat’, with technology
In this age when fintech is causing a stir in the financial services world, great people without enabling technology can amount to nought. This is why PostBank has rebooted its fintech arsenal.
“We have revamped our distribution channels. A year ago, over 90% of our customer transactions were over-the-counter, but that has been reduced to 60%- meaning that our customers trust and rely more on digital channels. We have achieved this by availing cards – we launched Union Pay International card, enabling mobile phone banking- the mobile app is up and running and can do several transactions. The USSD code for *263# is running and with that, you can do a number of transactions such as checking your balance statements, internal payments, mobile money and so forth, ensuring system uptime” he enthusiastically says.
PostBank is also migrating its ATM network from the old dispensers to recyclers that can accept and credit deposits in real-time. To drive this, the bank is upgrading its switch and the core banking system. To further decongest the banking halls, but also create a better customer experience, PostBank has also rolled out a 6-days-a-week contact centre, that for now serves customers remotely, in 5 different languages. There are also plans to operate it 24-7.
“This is all aimed at becoming more efficient and we are starting to see it in the bottom line. When you see our financials that will be coming out before the end of the month, you will see that for example, the bank’s operating expenses have dropped by 5%, despite doing all these investments. This gives us a very solid foundation to build on and take the bank to the next level. Our transformation journey is just starting,” intimates Kakeeto.
Pebuu’s John Paul Semyalo: Reimagining Africa’s Agent Banking and Last-Mile Digital Economy for Efficiency and Scale“Our thought process, our philosophy has been, how do you achieve more with less? How do we keep our eyes on the prize without literally bursting the bank? In fact, in some cases, we have found cheaper people who can even do more. What we’re going through is a process of trying to cut excess fat, get more agile and dynamic and that never comes without pain- but it is sweet pain,” explains Kabeera, the Executive Director and Chief Operating Officer.
“For example, even something as simple as account opening or loan approvals used to take quite long, but today, an employee loan, if you have an account with us, it takes one day- it would take two weeks with files and paperwork,” he adds.
“With this new momentum, new energy- we have grown faster than the three preceding years in aggregate. Our deposits and loans growth is equal to or more than what we grew, between 2017 to 2019,” he further says.
According to Kakeeto, these efficiencies are not just important for the bottom line, but they are also important for the sustainability of the bank.
“We have requested the government for more capital and we know the government has several other priorities. So, in the meantime, we have asked them to allow us to retain our profits so we can be able to self-fund a part of our strategy,” he says, adding: “So far, we have been able to self-fund all these activities through savings on our operations.”
Kakeeto says the strong foundation laid thus far, has been complemented by the full constitution of the bank’s board, this January, further anchoring the bank’s transformation agenda and the journey to tier-one.
The board is now chaired by investment banker and corporate finance expert, Andrew Otengo Owiny.
He wields over 32 years of practical experience in Banking, particularly Investment Banking, Corporate Finance/Financial & Investment Advisory and Capital Markets activities in the USA, Europe & Africa. Also appointed to the PBU board, is Ms Farida Mukasa Kasujja, a banker and Francis Onebe, an audit, accounting and taxation expert. The trio joined Beatrice Amongi Lagada, Lawrence Kasenge, Julius Kakeeto, Andrew Kabeera and Justine Tumuheki Wabwire, whose terms as board members were still running.
“Now that we have a fully functional board, it will help us move faster in terms of our transformation,” says Kakeeto.
PostBank punching above its weight
PostBank may be a tier two financial institution in regulatory classification, but in a pound for pound with tier one bank, and going by 2019 financial results, it had the 12th largest loan book and was the 12th most profitable. With about 47 branches and one pending approval at Bank of Uganda and serving about 1 million customers, it is also among the top 10 by footprint and number of customers served.
“We serve about 57,000 borrowers, out of whom 9,400 are agriculture borrowers. In terms of borrower numbers, PostBank is the leading lender to agriculture,” Kakeeto echoes.
“The numbers for 2020 will soon be out and we will soon be able to give you the up-to-date market ranking, but we are quite big in tier two and by all means a very powerful player in the industry, much as we have a tier two license. Even in the market, for some portfolios, our direct competition is Stanbic, Standard Chartered Bank, Centenary Bank, Equity Bank etc and not tier two institutions,” he emphasises.
Looking ahead: the journey to tier one
Kabeera, who is co-leading the transformation, says there are a few more gaps to close, such as realigning everybody to the new “do more, with less” culture.
“Every restructuring comes with some bit of discomfort- because, in the actual sense, that’s the nature of the task- to shake up things, that were previously not aligned. So, a lot of questions have been asked. But we are managing this by being very transparent and openly engaging with staff, every step of the way. It has been and continues to be an open process, with open communication,” he volunteers.
Kabeera also adds that considering both the potential and mandate of PostBank as envisaged in the Government’s master strategy- Vision 2040, requires more resourcing.
“We are well capitalised to meet the Financial Institutions’ Act (FIA 2004) requirements for a commercial bank, which UGX25 billion in capital; in fact, our capital is UGX100 billion, but given our key role in the National Development Plan, and Vision 2040, it would be more helpful if we can have more capital from our shareholder, which is government,” he says, adding that dealing with MSMEs requires a slightly different approach.
“To play the kind of role that PostBank is made for— to serve and enrich MSMEs and other lower segments of the market, you need patient capital. If you are going to support farmers, you don’t need money that understands that sometimes, there will be no rain, there will be pests etc, You need patient capital,” Kabeera insists.
For Kakeeto, however, it is progress and not perfection. He says, for now, he and his team are focusing on remaining efficient and profitable.
“If we are loss-making, we can’t finance all these things we are talking about. We are doing all these things with our internal resources, but if the government gave us more capital, there’s a lot more that Postbank can contribute towards improving and transforming the livelihoods of Ugandan households,” he says.
