While announcing Mumba Kalifungwa’s appointment as Absa Bank Uganda’s Managing Director, on March 23rh 2020, Nadine Byarugaba, the Board Chairman said the bank had all faith in the new Managing Director’s ability to lead the bank to new horizons.
“We have no doubt that Mumba’s experience across several African markets, deep knowledge of the bank, as well as his demonstrated strategic and operational vision will be invaluable as Absa firms its position on the continent,” she said.
Even though this was the first time Mumba was taking on a CEO role, Saviour Chibiya, the then Regional MD for Absa Regional Operations and now Chief Executive Regional Operations, also expressed confidence in Mumba.
“We will benefit from Mr Kalifungwa’s experience across several African markets, deep knowledge of the bank and his demonstrated strategic and operational vision as we continue to drive our growth strategy in Uganda,” said Mr. Chibiya.
Before coming to Uganda, Mumba had held various positions within the Group, including CFO in Botswana and Zambia. Uganda was his first time in a CEO role.
Upon taking the role, in some of his early media interviews, Mumba intimated that his focus would be on keeping his people (staff) and customers happy.
For his people, he said, he needed to “demonstrate as leadership that first and foremost, we care for our people” and show them that we are “there to take care of their interests”.
For the customers, he said the bank would continue implementing a “customer-focused strategy that gives us flexibility to develop tailored financial solutions to help our customers meet their growth ambitions”.
To drive a superior customer experience, he said the bank would “become a digitally-led bank that is centred around the ever-changing needs of customers”.
“Today’s customer demands even greater convenience as they look to reduce the amount of time spent banking and therefore our customers should expect more digital innovation from us that will enhance their banking experience”, Mumba said, in April 2020 media interview, while releasing the 2019 results.
Four years down the road, that people and customer-first strategy is paying off, enabling Mumba to live up to the expectations of the Group in him.
According to the 2023 results released this week, the bank reported customer deposits-led all-round growth.
Deposits grew by 16.3% from UGX2.45 trillion to UGX2.86 trillion- a growth of UGX400 billion. This, the bank said was a result of a growing active customer base, itself, a result of new-to-bank acquisitions, reactivation of inactive accounts and “increased customer engagements due to the capabilities built by the bank across its various alternate channels”.
“We continue to see increased customer confidence in Absa evidenced by a 30% year-on-year increase in customer banking transactions,” Mumba said in a speech during the 2023 results release.
Burgeoning deposits fuelled a healthy 12.9% growth in customer lending from UGX1.57 trillion to UGX1.77 trillion fuelled by an increase in customer working capital requirements.
“With the resurgence of economic activity, we saw an increased customer uptake of our working capital and trade solutions to meet their business finance needs. As a bank keen to play a role in supporting economic growth, we played our part by financing opportunities within key sectors that drove economic activity,” Mumba explained.
With a particular focus on agriculture, he said the bank’s total lending to the sector, stood at UGX249 billion, taking up 13% of the bank’s loan book, while the trade sector accounted for UGX289 billion or 14% share. The manufacturing sector accounted for UGX232 billion (12%) and personal loans UGX453 billion (24%).
“We saw many more of our customers take up instruments including working capital requirements, asset finance and trade instruments to finance their business financing needs. We disbursed more loans mainly driven by increased demand from customers for working capital requirements and our trade loans and overdraft utilisation yielded 19% and 29% growth respectively. This reflects that our efforts towards sustained customer engagement to provide the necessary business and financial advisory are paying off as we witness businesses take up various credit instruments to support their business financing needs,” Mumba reiterated.
With more lending, revenue grew by UGX64 billion (15.6%) to UGX474 billion, largely driven by a 42% growth in transactional banking and trading income.
On the back of this, the bank reported that net profit grew by 3.3% to UGX145.8 billion from UGX141.2 billion the previous year.
Assets grew by 7.8% from UGX4.2 trillion to UGX4.6 trillion⏤ argot of UGX328.5 billion, on the back of strong growth in customer lending.
Relentless investing in people
While net profit growth was slowed down by a 23% growth in total costs in 2023, that was was largely driven by investment in people, branch networks and digital systems, Mumba said this was a worthwhile investment in serving customers better.
“As a leader, I am passionate about growing and driving people to achieve their potential. I can boldly say that at Absa, our people are our strength. They drive our competitive advantage, enabling us to better serve and show up for our customers daily. Our business strategy to invest in the growth of our people as a key enabler for business growth has paid off,” he said adding: “I am pleased to lead an organisation that prioritises employee experiences. This has helped us to attract and retain the best pool of talent in the market”.
He said that in 2023, Absa Bank Uganda was ranked number one across the Absa Group in the Absa Colleague Experience Survey. The bank also achieved an employee net promoter score of 63%, with 82% of the bank’s staff being delighted and satisfied to work with the bank and an overall colleague experience score of 79%.
Abscaling: 4 four years growth under Mumba Kalifungwa
The 2023 results shed light on what Mumba has been up to in the last four years since he took up the leadership of the bank in April 2020, literally being thrown in at a deep end.
The bank was undergoing a name change⏤ from Barclays Uganda to Absa Bank Uganda, a process started in November 2019. At the same time, the Ugandan economy had in March 2020 entered into a lockdown following the reporting of Uganda’s first confirmed Covid-19 case, a month earlier.
Several other lockdowns and reopening would follow, until the country fully reopened two years later in January 2022.
An analysis of performance over the 4 years shows that despite the lockdown and the name change, Absa has continued to thrive and enable its customers especially, to thrive too.
In the 4 years, deposits have grown by a compounded annual growth rate of 6.6%, from UGX2.36 trillion to UGX2.86 trillion, a growth of UGX499 billion. Lending has also after stagnating between 2020 and 2021 picked up, growing by a CAGR of 10.6% from UGX1.3 trillion in 2020 to UGX1.77 trillion⏤a growth of UGX462 billion. Net profit has also grown by a CAGR of 53%, from UGX40.7 billion to UGX145.8 billion in the same period.
As a result, assets, in the 4 years of Mumba’s leadership have grown by a CAGR of 8.8%, from UGX3.54 trillion to UGX4.56 trillion, a growth of UGX1 trillion.
A force for good and creating shared value in communities
Commenting on the bank’s social impact, Mumba said that the bank was “driven by a commitment to play a shaping role in our nation’s growth and sustainability” in cognisance of the “large array of societal challenges facing our country”.
Our commitment to being a force for good and the sustainability journey that we have embarked on is driven by the philosophy of creating shared value in the communities where we operate.
“In a move to impart financial literacy skills to underserved communities, we reached over 46,000 people with financial education. In advancing financial inclusion through entrepreneurship, 530 business owners were trained under the Absa SME Academy in partnership with Enterprise Uganda. We are intentional about reaching people in the last mile with banking solutions. Over 1.6 million customer transactions were processed via our agency banking distribution network in 2023, across 1,553 locations countrywide,” Mumba said.
The bank also paid UGX110 billion in taxes during 2023.
Other social impact initiatives included:
- 340,590 trees were planted under our environmental conservation efforts, in partnerships with like-minded partners.
- A 30% energy saving is achieved through the adoption of more environmentally friendly sources of energy for our operations.
- Under the Absa Uganda Scholarship scheme, UGX160 million was spent on Absa Scholars where 69 youth were supported. The last cohort of 5 students graduated in 2023 and have all gotten employment.
- UGX135 million worth of Equipment was donated to Kabalye Police Training School for their resource training centre.
- UGX200 million collected through the AbsaKH3 7 Hills Run positively impacted 2,647 women and girls. The funds were put towards school fees, skilling and menstrual health management under the cause to keep the girl child in school.
- Under our skills and development programme, Absa ReadytoWork, 2,566 youth were prepared for work readiness.