RBB Rest of Africa offers a comprehensive suite of retail and business banking products and services to individual and commercial customers on the African continent outside South Africa. We provide a range of solutions to meet customers’ transactional, borrowing, savings, protection and payments needs. Customers and clients are served through branch and self-service terminal networks, electronic and mobile telephone channels and a dedicated relationship-based model.
This is a summary extract from our segment performance reporting. For the full segmental analysis, see our 2015 financial results booklet.
- Headline earnings increased 24% with an improved return on average risk-weighted assets of 0.99% (2014: 0.84%).
- Non-interest income grew 21% largely from a strong Card performance and higher foreign exchange sales.
- Cost-to-income ratio improved to 69.3% (2014: 73.1%) driven by positive Jaws of 5%.
- Operating expenses grew 7% in spite of inflationary pressures and once-off restructuring costs.
- Loans and advances to customers and deposits due to customers increased 26% and 20% respectively (14% and 6% excluding the impact of foreign exchange translations).
- Commercial loans grew 22%, excluding the impact of foreign exchange translations.
- Impairments increased 21% resulting in a marginal increase in the credit loss ratio to 2.07% (2014: 1.95%).
- Emerging liquidity constraints in some markets due to dynamic country-specific monetary policy actions.
- Regulatory impacts in some markets, including central bank regulations on fee pricing.
- Currency exchange rate volatility in most of the markets in which we operate.
- Increased competition from local banks.
The operating environment for 2015 remained promising, confirming its healthy resilience to internal and external shocks. Demand for borrowings remained positive across the continent and most of the economies in which we operate showed steady growth. Some of the challenges impacting our operating environment included:
- security concerns, particularly in the tourism sector;
- adverse weather conditions affecting the agricultural sector;
- weak commodity prices, weakened global demand and tight policy stances impacting inflation and interest rates;
- regulatory changes, including a 400 basis point increase of the statutory reserve ratio in Zambia and liquidity tightening in various markets;
- inflationary pressures, with particularly high inflation in Ghana and Zambia, and changing interest rate environments across various markets; and
- a slowdown in transactional activity in some markets as well as increased competition from local and international banks in a number of markets.
We made significant progress on the strategic priorities set out at the end of 2014. Underlying business performance continued to show good growth with increases in loan and current account sales. We continued to enhance our customer service model and optimise our cost-to-serve, to ultimately improve customer experience. Our sustained investment in innovation was underpinned by the launch of new, appropriate product solutions to suit individual customers’ needs.
We sustained our digital strategy through the increased promotion of internet banking and other digital solutions, with biller transaction usage growing exponentially during the year. This added to the efficient use of existing channels and provided customers with more convenient banking capabilities.
Asian Banker named NBC the Best Retail Bank in Tanzania and our Group Savings Account in Kenya, Zidisha, the Best Deposit product in Africa.
We also launched the My Shoes Are My Office initiative in four markets, which has seen colleagues mobilised to spend time with customers at their offices. The following are some of the benefits that were realised through this initiative:
- We increased our visibility to the market, demonstrating a commitment to becoming the financial services group of choice in Africa.
- We improved customer service levels.
- Enhanced customer relationships through the introduction to senior leadership.
- A deeper understanding of our customers by taking time to engage and listen to them.
- An opportunity to share the Group’s vision with customers, thereby increasing market engagement.
- Growth of pipeline and new customer acquisition.
RBB Rest of Africa’s focus remains on making customers’ lives easier, continuing to refresh core customer value propositions for targeted segments and revamping customer solutions. The strategy focuses on:
- delivering a multi-channel franchise through the launch of digital products with a focus on mobile solutions, ATM enhancements and self‑service kiosks;
- continuing to build fit-for-purpose branches to ensure we are optimally positioned to serve our customers and reduce service costs;
- migration of commercial customer transactions to Barclays.Net, an online banking platform for cash management; and
- continuing to focus on broadening business banking propositions given the current low level of penetration and the large potential which exists.