For a brief period, Henk Mulder took a posting with Alawwal Bank (then Saudi Hollandi Bank) in Saudi Arabia. It was a pretty typical career move for him – after all, through his career Henk has also worked in places like Indonesia, Colombia and Romania, just to name a few locations.
Unfortunately, 9/11 occurred not long after, and Henk found the environment wasn’t particularly pleasant; today, he views the move as an unwise career decision.
But from the experience, Henk realised it was preferable to live in countries with good weather and nice people. Nearly 20 years later, he’s found exactly that in the form of Zambia, where he serves as Zambia National Commercial Bank’s CEO.
On top of that, the diversity of culture and the new experiences offered by Zambia continue to keep him passionate, repeating a pattern throughout his career.
“I have always been active in emerging markets, and the one thing I enjoy is working and living in a country different from my home country,” he says. “It’s a totally different culture, with a completely different work environment and languages, and you get to know other people all around the world. Being a part of that was my main interest, and still is today.”
In fact, Henk went into banking in the early 1980s specifically because it offered an international career. He joined ABN Bank in the Netherlands, undertook an internship for a year and was soon offered an international position with the bank.
He also recalls that during his early days, ABN Bank gave him the date by which he would be due to retire. This date, he says, was five years ago, but today Henk is still going strong in banking. “The idea was that when you started, you’d work your whole life for the same company,” he says.
“That was typical in those days, but it changed radically over time because there have been several rounds of rationalisation, as they call it in the banking sector, and everybody was part of that, including myself. So, especially internationally, you had to fight for your job, compete with other people in those respective countries. That was a big change.”
“The one thing I enjoy is working and living in a country different from my home country.”
And fight he did – Henk went on to work with ABN Bank for the next 24 years but didn’t, as was expected, spend the rest of his career with the bank. He describes his eventual departure as the best decision he ever made (besides marrying his wife), unlike his move to Saudi Arabia.
Having joined a local bank in Indonesia for a few years, Henk found it to be a refreshing move, and understands why that kind of career mobility is increasingly popular among young professionals today.
Afterwards, he found himself with Dutch firm Rabobank, and with almost four decades of banking experience across a diverse swathe of countries, Henk today leads one of Zambia’s foremost banks, Zambia National Commercial Bank (or Zanaco as it’s more often known).
Having worked around the world, Henk believes that no two countries are the same in their banking environment, although nations’ central banks learn from their counterparts internationally, in refining the regulation of financial bodies.
But what is the same universally is integrity. “At the end of the day, you have to stick to a certain set of values, of which the foremost is always integrity,” Henk explains. “It requires honesty, transparency. I think that’s a key element in anything that relates to banking and financial services. It’s a value that you always have to stand for.”
In particular, says Henk, any good organisation will ensure that its internal checks and controls are up to speed, with active anti-fraud measures undertaken. In fact, when The CEO Magazine spoke to Henk, Zanaco was in the midst of its anti-fraud week, highlighting and promoting action in the area.
People and money, he says, are a “dangerous combination”, so the right frameworks must be in position to combat financial crime. All banks in Zambia adhere to rules established by the Bank of Zambia, the country’s central financial institution, as well as by the Securities and Exchange Commission and the Pensions and Insurance Authority.
These organisations are responsible for instituting regulations around capital requirements, liquidity, profitability and so on, and while all financial institutions must adhere to these, Henk says Zanaco always tries to go beyond the basic requirements of all regulations.
Such dedication is no doubt part of Zanaco’s ambition to be the top transactional bank in Zambia. It has a long history of working towards this goal; it was, for example, the first to launch ATMs in Zambia, and was also the first to launch mobile banking in 2008, using the Xapit banking platform.
More recently, the bank has implemented a new agency network called Zanaco Xpress. The network includes small outlets that allow cash banking services, with 400 agents working in 2016.
Today, the number of agents stands at around 5,000, with plans to expand this to 10,000 this year. The availability of this service means that Zambians have wider access to basic financial services, closer, convenient, quick real-time transactions, with extended service hours “important for financial inclusion”.
Across Africa, there’s a trend to embrace mobile banking as a means to access remote or rural customers, and while Zanaco is engaging with this trend, the bank also remains committed to serving such customers through its Zanaco Xpress outlets.
The bank is equally focused on investing in mobile banking, says Henk, with the use of QR codes and increasingly simple transaction methods. But while cash exists, there will be a need for these physical outlets to accommodate cash. In future, however, he believes that Zambia will follow Kenya in becoming, if not cashless, then a ‘cash-light’ society.
Zanaco traces its heritage back to 1969, when it was founded as a government-owned bank, until 2007, when it was sold to several firms, including Dutch firm Rabobank Group, which at the time owned 49%.
Rabobank now owns 46%, through its co-ownership of investment company Arise BV, with the rest in public ownership, government ownership and domestic investment. Zanaco has the largest client base in Zambia (over 1.2 million) and is a market leader in transactions among banks. In addition to Zanaco sporting club limited the Bank also holds 100% shares in a Fintech subsidiary incorporated in 2019.
Before he joined Zanaco as CEO in 2016, Henk had a senior role with Rabobank. He’d visited the bank several times, concluded it wasn’t being managed to its full potential, and so put up his hand to take the leadership.
Zanaco’s services include personal banking and loans, corporate and investment banking, and financial support for businesses – covering SMEs, the agricultural sector and other industries. It’s also worth noting the importance Zanaco places on people; for example, the board is close to gender-balanced, with 40% women. Henk says the team didn’t even need to introduce quotas or other initiatives – it was a product of the board’s culture, which includes two foreign nationals, from the Netherlands and South Africa (besides Henk himself).
Micro-lending is another avenue of exploration for Zanaco, delivered via mobile banking. It’s part of the bank’s focus on the low-wealth, unbanked section of Zambia’s over 17 million citizens, and is rolling out in July this year.
This section of the population makes up a large part of Zanaco’s market, Henk says, with many customers having as little as a few dollars, although the bank continues to serve clients across society, and doesn’t lessen its focus on clients outside this core section.
“We have a lot of very big clients, but many banks target the middle and higher segments of the market, and a lot of foreign banks do this especially,” Henk explains. “We don’t have that luxury of choice. By default, we have to serve everybody, but it is both the tradition of the bank and the future of the bank.
“However, if you do that, then you have to do business in a tougher way, in that you have to provide the right segment with the right service model and an affordable price. The mass market is much more focused on the number of clients than on the net worth of clients. We have, therefore, separated the digital division from the commercial division, whereas with most banks, digital banking is embedded in each department, within retail or commercial.
“This separation takes care of the mass market. The rest of the bank is developing with it, and gets product support from the digital division. That’s already changed a lot in our bank, and if you do that right, you get the chance to grow your number of clientele as well as transactional business, only when you separate this and focus on this.”
The bank has seen profits soar, from a loss of K62 million in 2016 to a profit of K215 million in 2019. Deposits and loans have grown over 56% and 66% to K9.7 billion and K5 billion respectively over the same period. The loan book has been very well managed, reducing the non-performing loans (NPL) ratio from 28% to under 6.5%.
“Zanaco is special because it is a universal bank. Being universal is not a choice, it is by default. Everyone from the smallest account holder to the biggest corporate member body is welcome in our bank, and it’s been like that for the past 50 years. However, you cannot deal with every client in the same fashion. The segmentation we started in 2017 was key, and that’s had a lot of consequences for the way we deal with different clients. We have our branch network now, which is around 70 branches, and is being further rationalised.”
“Everyone from the smallest account holder to the biggest corporate member body is welcome in our bank.”
Digitisation is a major strategy for Zanaco; Henk describes its online and mobile services as being equal to any offered in the US, for example, in spite of how others may perceive Zambia’s capabilities.
Along with the small Zanaco Xpress outlets, service access has increased nationwide, and it’s allowed Zanaco to further reorganise to improve efficiency.
But other challenges exist within Zambia’s banking sector. Henk believes the sector is oversaturated – there are about 19 banks at present and he says even 10 would be too many. This creates a disadvantage for small banks particularly, and it’s harder to meet investment requirements around capital and so on.
It’s a difficult environment for Zanaco to navigate, particularly because investment is a major focus for the bank. “As a bank, we are focused on all sectors,” Henk explains.
“In the old days, it was mainly agriculture, although that is not the case anymore. However, the main sectors in the economy are two – mining and agriculture. It is traditionally an agricultural country, so you can’t deny a focus on that industry as a strategy. To service this kind of sector, we need to get expertise and experience in it. Over time, we’ve built up a lot of expertise and experience.”
Zanaco’s approach to support of the sector is complex, and examines the value chain around agriculture – where agricultural products are processed and sold, and the market for these products. The bank looks beyond primary producers (the farmers themselves) to support industry participants throughout the agricultural supply chain.
“We play a very important role in financing and distributing so that farmers get an income just before the rainy season begins, and they can start planting in time,” says Henk. “There are hundreds of thousands of farmers here, and you need these systems so that people receive their subsidy and can purchase their fertiliser on time. That’s an extremely important function of the bank.”
Zanaco takes a similar approach to the mining industry, although it doesn’t directly finance mines since the timescale is more long-term than the bank typically follows. Instead, Zanaco operates across other areas of the mining value chain, supporting the industry beyond the primary producers.
A great deal of this, says Henk, involves supporting SMEs, an example being a company that supplies and repairs large tyres for mining machinery.
Zanaco has played an important part in addressing some of Zambia’s infrastructure and equality issues. Chief among these is water sanitation – about a third of Zambia’s population lacks access to clean water, with most of these living in rural or densely populated areas. The bank has assisted by supporting drilling for more water facilities and access, and with the establishment of mechanical water systems.
Financial education, widely regarded as an integral part of widespread economic inclusivity, has also been a cause for Zanaco. The bank has targeted youth, farmers, SMEs and more through school programs, interactive activities and mass media broadcasts. Furthermore, a donation initiative was implemented, for which the bank pledged to match staff donations to communities in need – the drive resulted in K344,256 (around €21,000) being donated to 45 charities across Zambia.
Another of Zanaco’s contributions to Zambia’s community is Zanaco Football Club. Sponsored by the bank, Zanaco FC is based in Lusaka, and was initially launched as a social team for management trainees. The club has grown to become one of Zambia’s most successful teams, today playing in the country’s top football division.
Within these sectors, Henk predicts that honey will be a growing industry for the nation. Cobalt shall continue to be a major Zambian product, and while uranium won’t be big per se, it will certainly get bigger. But outside of mining and agriculture, Henk believes a crucial area of investment for the country will be energy.
“The national issue at the moment is providing sufficient electricity. There’s always been a total reliance on hydro and its efficacy depends on the water levels where the generators are located. But that’s changing over time and the need for electricity is increasing rapidly, so at the moment we only just have enough with hydro. We always talk about solar and all these things, but the big question mark is will that be enough for the future? Can we really supply enough electricity to meet the need?”
“Zanaco will never leave. We’ll always be here, and Zambians can trust us.”
The bank is working towards investment in bigger solar projects, as well as other clients on a smaller scale – again, SMEs that are adjacent to the solar power industry, either in terms of supplying or investing. Zanaco also offers two- to three-year loans designed for companies that want to invest in solar, specifically to enable equipment integral to the industry.
These loans are flexible and don’t necessarily require high collateral, making them perfect for smaller innovators and investors.
It’s part of Zanaco’s complete dedication to the country – Henk says it’s a bank that services Zambia as a whole, thanks to its status as a truly local bank.
“We are a local bank,” Henk declares proudly. “There are banks such as Barclays, Standard Chartered and Citibank, who say they are here to stay, until they have a problem with head office, or they get worried about the market, like Barclays did, and then they leave.
“But Zanaco will never leave. We’ll always be here, and Zambians can trust us.”
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