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“We customise our services by client; we are the tailors of the financial system”

Interview - June 13, 2013
Focusing on a personalised approach to client services, Mozambique’s Banco Único opened its doors in 2011 after identifying an opportunity to challenge the four main banks by meeting the demand for financial products and services built around customers’ actual needs. João Figueiredo, President of Banco Único, talks to Upper Reach about the country’s banking sector, its low bancarisation, and how “Banco Único, more than being a transactional bank, is a relational bank” as it concentrates on building close links with each of its customers.
Taking into account the last 10 years of development, what is your own analysis of Mozambique’s current situation and of the creation of Banco Único for a niche market that is different from the rest?

In the recent past, Mozambique was a country that lived off aid from a group of countries that supported the State during a period of economic weakness that the country was going through, which lasted from the times of the Civil War until peace was reached.

In spite of all challenges during that phase, and in some way still today, we had very weak infrastructure and therefore the majority of the population was living below absolute poverty line.
In recent years, people started talking about Mozambique’s mineral resources (coal and gas), as well as others, that could help jumpstart the economy. Many challenges come with that; from the experience of other countries, the most significant one for the future of the country is to resist the temptation to transform the model of economic development into a model of development based on a commodity.
Mozambique has to continue with its current multi-sector model. We have a very vast country, with nearly 22.5 million inhabitants, of whom more than 50% are under age and more than 70% live in rural areas. It is with these demographics that we have to structure our country.
The Mozambican society has always looked at agriculture as a very important sector for its development. I would not say that it will be the kick-starter of its development, but it is an unavoidable sector. We have a shoreline of nearly 2800kms, paradisiacal beaches, fishing grounds – the Mozambique Canal is fantastic, with magnificent fishing resources – and tourism, and we have high expectations that the agro-industrial sector will start to emerge. 
We have to start the process of down-streaming certain industries, which is fundamental in terms of turning the page of the Mozambican economy, and that is associated with large projects. This means that we have to make sure part of the production value chain is retained inside the country, and that Mozambique is not just seen as an exporter of raw materials. 
Mozambique, should then head towards a model of multi-sector sustainability, and attempt to meet these challenges and make gas and coal the jump-starter of economic growth. At the same time, it needs to promote a better more equitable distribution of the national income through the means of an efficient fiscal policy that promotes wealth generation in the country. 
In this spectrum of natural growth of the economy, there is always room for the financial sector, which is the bulwark for the development of it. The financial sector, as it is well known, is the first element of sustainability for any economy. This goes hand in hand with the economy. But in this country, we have a somewhat fragile social knit, which constitutes a big challenge for banks. We still have a middle class that is not very significant and banks – in order to have a healthy intervention – need to find a more robust middle class.
For example, all banks have housing related loans available, but the issue is not to have those loans, but rather to have people with salaries at such levels so that individuals have the capacity to pay these loans. But before anything, the creation of national wealth and an increase in the number of jobs must precede the distribution of that wealth and the operation of banks. 
In the past few years the authorities of Mozambique have adopted an expansionist policy in monetary terms and aimed to reduce the base rates, promoting with this an increase of credit in the economy. Since March of last year until March this year, credit grew by almost 20% and if we consider that GDP has been growing at 8% we can see that credit in the economy is evolving at a pace even faster that the increase of national wealth. 
From this point of view, the financial system has been evolving to do its job. To increase even more, it is necessary to capture more savings, and for that to happen, families need to have incomes, and so we need to see a rise in national production to increase incomes. Therefore, this value chain has to be established so that the effect which generates banking activity takes place. 
What would be the main role of the financial sector to international investors who come to invest in Mozambique but are afraid of materialising their business plans due to, for example, the loss of FX competitiveness in the future (as a product of the appreciation of the currency, given by the export of natural resources)? How could an investor trust the Mozambican financial system and national profitability?

One of the fundamental elements for a balanced evolution of the economy is the equilibrium of the currency, the metical, because one of investors’ major worries is how our currency will evolve – if the investor invests in foreign currency, he/she receives the profits in local currency; but if when converting it to its currency of origin the metical is depreciated, the investor will come out worse off. The Central Bank has been conducting a very responsible policy with regards to the stability of the currency. Although in recent years we have seen a depreciation of the metical in relation to the dollar, there clearly is greater currency stability. 
The financial system of banks, in general, is one of the principal entrance points for investors in any economy. At Banco Único, we have an area that welcomes guests and outsiders and guides them through the national procedures to be met, so that the repatriation of funds invested is as smooth as their entry in the investment phase. The bank works as a consultant, advisor and gateway to invest in our country. 
Banco Único can perform the role of catalyst of wills. We know the market deeply, the national economic agents, and the demands and skills needed by the market. We can convey the weak and strong points of the system to investors and we are in a position to support investments with more peace of mind. 
Strictly in financial terms, Banco Único can finance operations and ensure compliance with international rules and standards of the financial sector. Mozambique has one of the most modern financial systems in the world. Our financial system is ready to serve clients who come from outside, foreign investors, in the same way they are used to being served in their local economies. There is a large balance between the Mozambican financial system and the financial systems of the rest of the world. It is one of the sectors that is closest to international market standards.
This partnership of investors with the bank is extremely important, to the extent that with our experience, we can transmit to them the fundamental requirements for investing in Mozambique.
So what is the biggest fear that foreign companies/investors have when investing in Mozambique?

I would not say there is a fear. There is a normal desire to know the legal requirements, norms, and processes of how things work in this economy, to know who is who in the market in relation to a particular business. The bank can perform a fundamental role in the transmission of that information. 
How did Banco Único come about and what were the needs of the market for the creation of this bank? What makes it stand out compared to other banks?

Banco Único emerged after a market study we carried out: four banks had nearly 87% of the market share, which only showed by itself there was still room for other banks to enter the market with a different value proposition. Looking at the bankarisation level of the country, the numbers are shocking: less than 20% of the adult population is bankarised, less than 8% uses credit and less than 5% uses some kind of insurance product. 
We concluded that the reason for four banks to hold 87% of market share was that there weren’t other options. The degree of differentiation that the existing 17 banks in the market brought to the table was not notable for clients and because of that we found there was room for a bank that brought in something new to clients and that was Banco Único.
Banco Único results then, essentially, from looking at the market and getting inspired by it. When we look at the client, we put ourselves on his shoes and try to find out what drives him. Contrary to the majority of banks, which design products and services to sell in competition with other banks, Banco Único has all the products other banks have, but it doesn’t pretend to differentiate itself with those products, but rather by the relation developed with each client. 
It is because of that we say that Banco Único, more than being a transactional bank, is a relational bank. We customise our services by client; we are the tailors of the financial system. This means we do not sell products and services, but rather solutions, because we seek to understand the client’s world, what his problems are, what he offers to the market, etc., and build with him the best solution. 
A university reached out to the bank because it could not reconcile the payment of fees in their accounting. They contacted us and along with them, we built a solution which allows reconciling the payment of fees performed through various channels of Banco Único with its accounting system. But our value-added solution developed with the university does not end there. We wanted to take it further: open a branch of the bank, internet rooms at the university, work in joint conferences, offer housing loans to professors, student bank cards, financing for students’ parents, housing for future students, etc. 
It is from that relationship that we developed our activity and not the other way around. This way of doing things makes the client feel unique; it is not the bank that is unique, it is the client; therefore, the name of the bank comes from the client: each client is unique.
This way of working was very well received by the Mozambican market and is evidently reflected in all aspects of our service. Upon entering one of our branches, there is ambient music, a lounge for people to sit down, tables and interactive screens with fundamental features of our DNA so that clients can interact with the bank. In nearly a year and a half, the bank achieved a market share of nearly 3% (due to the clients’ perception of how we operate) and managed to “shake” the 87% nobody changed. At the moment, Banco Único already has 3% of the market share and we are on the path to grow even more.
Customer loyalty is so important to us that it becomes sickening; we are so concerned about the client that we are in constant contact with him and periodically we perform assessments of clients in order to validate their level of satisfaction with our services.

Since relations are built based on dialogue and interaction, on the day of their birthday our clients receive a birthday card signed by the bank’s president along with a toast. This shows how we want to treat the client.
We still have a long road ahead of us, many things to fine tune. We aim to grow with quality and more challenges. A client gained and one who works with us is of the utmost importance; a new client is good, but the loyalty of existing customers is even more important, because what we do is a partnership.
Giving clients a special service requires a well-trained workforce. What is the strategy to empower the human resources of the bank?

The strategy starts after the definition of the bank’s three pillars of development, namely infrastructure, technology and human capital. You will never hear us say that something does not work because of a weakness in our human capital. Our responsibility goes far beyond what we receive from the education market, which people give us. It is up to us, as companies, to obtain the human capital, train people, and place them at the desired levels.
If something does not run well with the bank, the responsibility is ours. We are not going to put the responsibility on the country. It is we who have to select personnel, work with them, and place them to work where needed. Before any person starts working with us, for whatever vacancy there is, the individual must go through a process of formation and integration – the first one to talk with these individuals, at the opening session, is the president of the bank, myself. This is a fundamental point of our DNA; it has a very high degree of importance. 
Regarding the exchanges of experience and know-how with foreign institutions, they are important in order to guarantee a brighter future for our Mozambican staff. Our experience comes from many years of working in banking. Our markets brought that knowledge to Banco Único; but our mission does not conclude with the execution of each task but rather with the execution of our tasks, we teach others what we do. We are transmitters of our experience. 
Speaking of the most recent participation in the purchase of shares from Nedbank, what is expected from international partnerships like this one and what will your strategy in the future be to seek more partnerships and attract more shareholders?

In spite of being the newest bank, Banco Único is the one with the most management experience in the country, with more than 15 years in the sector. We have a very significant capacity to build international relations with several countries, banks, and international agents. We know what the critical elements are, what moves an international investor when he or she is advancing towards an investment operation in a given economy. We know what the elements of success are, and the assumptions and national conditions; in fact, we have great conditions to develop these partnerships and promote them.
Banco Único has relations with several banks at the national level. We develop partnerships in many ways: cooperation and accompaniment of the clients of other banks that do not have representation in Mozambique; we develop partnerships at the know-how level, in the corresponding banking areas and we develop partnerships at the shareholder level, like with NedBank (still awaiting the approval of the regulatory entities of each country, in the sense of allowing the announced operation).
This is an area in which we perform very well, because we have vast experience in relation building in the international market.
Just like the Prime Minister and the majority of ministers have already said, public-private partnerships are the most viable and efficient way to develop an economy and build consensus. In your opinion, what is there on the private side to work with the public sector?

It is unavoidable to work with the government, given that the principal economic agent of country is the State; therefore it is a necessary step to work extensively with the government for the development of the economy. For us, it is important to secure there is an orientation in the sense of economic rationale for big projects we jointly had with the State.
The State has a sense of direction, which in recent years has been very assertive with respect to private initiatives. The State has various initiatives and among them various infrastructure projects which have to be put in place to serve the economy. The only way to establish these infrastructure projects in an efficient way is through concessions/partnerships with private enterprises. As long as these are created with a safeguard of the public interest and with an orientation to private management, we will always agree and be motivated to participate. 
The State must have great discipline with public accounts. We agree on that and contrary to Europe (which was not used to these “wanderings”), we already have the IMF (International Monetary Fund) on our backs, and therefore, we are used to a lot of discipline.
We now have an emerging entrepreneurial class with high self-esteem and who are proud to be Mozambican. What is the contribution of Banco Único for Mozambicans to feel that way?

We have created a bank that contributes towards the development of the national economy. That’s our biggest contribution. Having a well-structured national economy, national production, and equitable distribution of national wealth, with the people (who are welcoming and know how to live along various nationalities, languages and peoples) being the first beneficiaries of this process of national wealth, we will have an exemplary country.
The role reserved for an institution like ours is to promote the development of the economy, to promote financial products that could create jobs, promote the emergence of SMEs and everything that has to do with the generation of jobs and wealth in the country.