Interview: We had to change our approach - Maria Ramos

Maria Ramos talks about the reconfiguration of the South African market since the crisis of 2008/2009 and the bank's new plans for Nigeria.



The July 2013 consolidation of Barclays' African subsidiaries and its shareholding in South Africa's Absa created an integrated African operation for the Britain-based bank. With recent results encouraging despite a tougher environment – Barclays Africa announced 11% headline earnings growth in its June 2015 interim results – Maria Ramos has strengthened her hand in the company.


"Reforms that we're doing in South Africa ... we're rolling that out country by country"

Having served as chief executive of the transportation parastatal Transnet, she became chief executive of Absa, which is majority owned by Barclays, in 2009 and then Barclays's chief executive for Africa in 2011. There have been challenging times for South Africa's financial sector, especially during the 2008/2009 financial crisis, the collapse of unsecured lender African Bank in late 2014 and now with the downturn in the Chinese economy. As Barclays Africa has strengthened its role in the Kenyan insurance market and made the first steps to operate in Nigeria this year, analysts warn that the bank needs to keep an eye on costs.


You applied for a banking licence in Nigeria. Is this to help South African customers who are already present or thinking of entering Nigeria or are you targeting Nigerian corporates?

Maria Ramos: We thought about this from the perspective of serving corporate clients across the continent – so both African clients doing business in Nigeria and Nigerian corporates doing business outside of Nigeria and across the continent. And then obviously because we're part of Barclays.We're also an international bank, and actually one of the things we believe is quite unique about us is that while we are fully local in the markets that we are operating in, we are also fully regional and we are fully international. And so it's about helping our international clients who are doing business in Nigeria. The strategy is broader than just taking South African clients into Nigeria.


Looking at your business in South Africa, just how much does the retail element contribute to the overall profits?

It's the biggest share of our business and makes up just over 60% of total profits. For the first half of this year, our retail and business bank headline earnings were up 17%. We have gained just over half a million new customers. Customer satisfaction is up, and customer complaints are down. So that's a very different world to the world we were in in 2012, when we had to change our approach.


Are you going to take those same levels of service and apply them throughout Africa?

Well, in fact, in some countries our customer service levels are actually a little bit better than they are in South Africa. But, yes, the objective is that the reforms that we're doing in South Africa – the investment into our network, whether it is the physical network in the branches or in the retail banking space, or the digital network – we're rolling that out country by country in the rest of the continent, in the retail and business banking space. And then, of course, in corporate and investment banking we have to be able to roll out the product set, whether that's in trade finance or foreign exchange or cash management. We are rolling out all of those systems across the continent into our network.


What was it that hit your retail business in South Africa back in 2012? How have you managed to turn it around over the past few years?

It was really a combination of things. It was a business that was changing. It was making sure that we had the right skill set, that we had the right systems in place. It was a different market environment, a more bullish market experience, capability and talent to deliver on that. I think we all struggle, whether you're in the public sector or in the private sector: there's a war for talent. There's a war for skills, and there's a lot of people competing for the same set of skills. I think probably the biggest and the most important thing for us to resolve in the South African economy is how to continue investing and involving those talent pools and those skills – making sure we've got deep enough talent pools. After all, we live in a part of the world that has got a significant amount of young people – all of them incredibly ambitious, all of them with tons of potential.


Is there a tension between the financial sector and the manufacturing sector in South Africa with regard to interest rates?

No, because we don't have a market where interest rates are determined in that way. I think the South African Reserve Bank has one core objective, and that's inflation. And so, if you think about the conduct of monetary policy, it's managed very independently. The central bank has got its primary objective, which is price stability, and then it has to do that with respect to economic growth.


This isn't a contest between the financial sector and the manufacturing sector, I think, when you're making decisions about interest rates. You're looking at where inflation is, where demand is, because that's an indicator of inflation down the road [...] But I don't think we have a monetary policy in this country which is directed to enhancing the fortunes of one sector over another.


Would you want to see a United States-style dual mandate for the central bank, where they have to look at unemployment as well?

I was part of the team that negotiated the independence of the central bank in the interim constitution. I am very comfortable with the central bank's mandate.



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