Nedbank fights for market share
Nedbank, the country’s smallest commercial bank by assets, is embarking on a drive to regain its lost market share.
As part of the ambitious drive, the bank said it is placing big emphasis on expanding its retail footprint across the country. Managing Director Lionel Mathews revealed at a media briefing held in the capital on Thursday that 15 new branches will be added to the bank’s current network of 21 branches to help increase the bank’s market share from the current 12% to 20%.
Mathews said: “We have embarked on a drive to regain and retain our 20% market share. We don’t want to be the biggest bank in terms of assets, but we just want to regain our market share in the next five years.”
Although he could not give specific figures on how much the exercise will cost, he said a full feasibility study will be carried out soon for every branch that the bank intends to open adding that every new branch is expected to break even or become profitable within the first two to three years as that is key.
“Obviously the capital investment in a branch network is quite significant, but we believe that through our envisaged strategy and vision of being a bank for all, we need to increase our footprint and visibility to the general public,” Mathews said.
In addition to an increased retail footprint, Nedbank intends to expand its mobile footprint across the country within the next 12 months making it more accessible to ordinary Namibians and thereby increasing financial inclusion.
Nedbank will also roll out a new core banking platform at a cost of N$120 million by mid next year. Mathews said the bank is pulling out all stops to ensure that the new core banking platform will have no [negative] impact on its customers.
He said: “The banking platform investment is quite significant, it is over N$100 million. And like I said, we are very mindful of the impact that the system change will have hence it is important that the management of that implementation is critical so that we don’t have a significant impact on our customer base. “In the morning when you go live and and you turn on the screen and the customer walks in and say I want to deposit money, that system needs to work. So it is as simple as that, and it is sometimes a very simple and small thing that has got the biggest impact. The ordinary Namibian does not have to feel that the system has changed. They have to have consistent and reliable access to their funds so that they can transact in the economy and contribute towards economic growth.”
Mathews added that Nedbank will also focus on SME financing as part of its solution to the country’s “single biggest challenge – unemployment.” He said Nedbank will have a different approach to SME financing.
“We have developed a particular value proposition for small business services in terms of how we manage that risk, but more importantly I think we have realised over time that it is not only about access to finance, but also how we support those small and medium enterprises. So without letting out what we want to do, we feel that where we could potentially be differentiated in the market is by looking at how do we broaden our support other than financial support.”
He said SME financing will start towards the end of the first half of next year as there are a number of things that needed to be put in place before implementation.
“I don’t want to say actually what we want to do but we have very clear differentiating strategies around this and we are also consulting broader stakeholders.”
He said Nedbank is embarking on its ambitious project at a time when it has a strong balance sheet. “Our capital base is just over N$1 billion and our ability to make loans and advances to the general public is in excess of a billion dollars without bridging any regulatory matrices so we actually have a balance sheet that is ready to be deployed optimally.”