Banco Austral, the Mozambican bank within the Absa Group, has announced solid growth in earnings for the year ended March 31 2004, the second consecutive year since Absa acquired it that the Mozambican bank has shown positive growth.
“This is significant, particularly considering that substantial resources are being invested in technology, systems, training and the new operating model in order to make the operations more efficient and more sustainable. It’s about providing a better service to all our customers,” says Johan Stander, managing director of Banco Austral.
The strong performance is attributed to a focus on the core capabilities of the bank. Total assets grew by a strong 25% from MZM 2,835-billion to MZM 3,548-billion, with liquid assets such as cash, short-term and money market assets growing by an astounding 70% from MZM 988-billion to MZM 1,674-billion. Total customer deposits grew by 30% from MZM 2,346-billion to MZM 3,047-billion.
In a statement issued on Wednesday, Absa said that Banco Austral is financially sound.
“Its capital adequacy ratio has improved from 25% in 2002 to 37% towards the end of 2003. This equation places Banco Austral in a favourable position in terms of potentially increasing its risk-weighted assets, particularly in the form of loans and advances.
“From an income point of view, its mix has improved and is now more diversified, which reduces risks and exposure to any particular category. Interest from advances has grown by 60% from MZM 78-billion to MZM 126-billion, net trading income by 72% and commissions and fees by 46%.”
On the other hand, the bank has improved its costs efficiency with operating expenditure reducing by 6% from MZM 482-billion in 2002 to MZM 454-billion in 2003.
Absa added that for both 2002 and 2003, Banco Austral’s financial statements have achieved a clean and unqualified audit report from KPMG. The bank is also taking all the necessary steps to be fully compliant with South African (AC133) and International Accounting Standards (IAS 39).
“We believe that the 2003 strong balance sheet and positive results are, among other things, an excellent base in which to continue to build a more successful bank to serve all our stakeholders,” says Louis von Zeuner, Absa Group executive director.
The Absa Group acquired a controlling interest in Banco Austral in October 2001. Absa currently holds an 80% stake in the bank, with the balance being held by the Mozambican government. The deal fitted perfectly into the group’s African expansion strategy and was based on a model Absa had already successfully applied in acquisitions elsewhere.
Absa’s investment included management development to ensure that Mozambican staff were empowered to run the bank on a highly efficient basis. The group also adapted and deployed high-tech solutions to overcome Mozambican infrastructural hurdles that previously limited the development of the banking market there.
Banco Austral is largely a retail bank and currently has 69 branches, 1 200 staff members and 45 ATMs.
Absa also announced that, after almost two-and-a-half years as MD of Banco Austral, Stander has decided to leave the service of Absa to pursue other business opportunities in Mozambique.
Stander will be replaced by Gerald Jordaan, who has been in charge of the National Bank of Commerce (NBC) in Tanzania for almost five years.
In this position, Jordaan significantly reduced the bank’s cost-to-income ratio and managed to turn the bank’s fortunes around from a bank that was insolvent to a bank that has produced profits for four years in succession. NBC was named the number-one-ranked bank in Tanzania in 2003, based on a number of financial criteria, and Jordaan’s experience will serve him well to take Banco Austral to new heights.
“The challenges presented by Africa allow for creative thought and innovation. Tanzania offers a good example of how unique solutions can be applied to bridge the logistical gaps that have hindered the implementation of advanced technologies to the consumer. The challenges facing Banco Austral are issues we have already addressed in Tanzania — my challenge will be to apply those lessons to optimise Banco Austral’s long-term potential and grow its business,” says Jordaan.
Jordaan will be succeeded in Tanzania by Christo de Vries, currently general manager of Absa Delivery Channel Services’ service management and support.
“The growth in our Mozambican operation has been very encouraging. The African banking sector is very competitive and we work hard to stay one step ahead of the local and international players. Absa offers Mozambique the opportunity to bridge the gap with the developed world by transferring skills and providing banking services equal to those available elsewhere,” adds Von Zeuner. — I-Net Bridge