Standard Bank is a South African-based bank with operations across 17 countries in Africa, with its personal and business banking division being offered in 15 of those countries.

Standard Bank recently appointed Zweli Manyathi chief executive of personal and business banking for Africa (excluding South Africa). In an interview with How we made it in Africa, Manyathi speaks about the bank’s strategy for the continent, why it has identified Angola as an important market and the challenge of working in cash-based societies.

Which African countries outside of South Africa does Standard Bank see as having the biggest potential for its business?

Well, we have got what we call the big five. That is Nigeria, Ghana, Angola, Kenya and Mozambique. Those countries are characterised by substantial growth in their GDPs. That has been the case for a while and that generates good growth in the middle income groups which is really at the core of retail banking, as well as it really generates opportunities for businesses to grow and thrive. So those are the critical ones that we see for us.

Countries like Mozambique are relatively new in terms of being identified as growth markets, as opposed to Nigeria which has been on investors’ radars for much longer. When did these markets start to become serious countries for Standard Bank’s business?

If you look at all the countries that I have just spoken about, we have been in those countries for a long, long time and those who went before us as leaders in Standard Bank had the foresight to identify, and correctly so, countries that were likely to benefit from Africa’s growth.

The one that is relatively new for us is Angola and the reason that is the case is that it’s not so long ago that Angola was in a very unstable political environment. They came out of that and there is stability that has enabled Angolans to begin to work their economy and they have done very, very well. The growth in the middle income that [leads to] potential customers of banks has grown phenomenally. Nigeria has had that for quite a while.

So Standard Bank’s leadership of the past had the foresight to see these opportunities. We have been in Mozambique, for instance, for a long time; more than 10 years.

Standard Bank has opened 15 new branches in Angola since June last year.

Yes, we actually stepped up our number of branches. It is a [result] of being late in the market. We had to build our infrastructure or distribution network very fast and that shows the extent in which we believe that we can, and will, succeed in that market. But in the short term that kind of investment is heavy on the profitability of the business. So it’s one of those things where we invest very heavily upfront and now we have to do the hard work of getting to win customers and grow our business.

Angola has been described as not being one of the easiest places to do business and, while there have been improvements, it has a large number of people living on less than US$2 a day. Furthermore, it is Portuguese speaking which can be tricky for English speaking companies. What strategies has Standard Bank adopted to do business on this environment?

I suppose one very interesting thing that one learns very quickly when you operate in the continent as opposed to operating in South Africa: a lot of people talk about Africa as if it was one big country. As soon as you get involved there you realise that the continent is a collection of countries in excess of 50 and you operate in a few of them and each of them have different political environments, regulatory environments are different, culture is different.

We are in two Portuguese-speaking countries and you therefore have to make sure that as a bank you are competent and capable of navigating yourself in that environment. And one way to do it is to actually localise your leadership as soon as you can. You need to have, as soon as you can, Angolans running Standard Bank Angola because if you do that you don’t have this difficulty of being out of place… your context is Angolan because you are Angolan, and you are therefore better able to deal and navigate in that environment. So one of our very clear strategies is to localise as much of our leadership and management as we can, and do so very fast.

So it’s important, therefore, that we can attract local talent that is either already there as far as experience is concerned, or that we can groom to get into a position where they can take the leadership of the bank within that country.

In a lot of African countries many people still remain unbanked and payments are often done with cash as opposed to credit cards. Has this been a problem for Standard Bank and, if so, what is the bank doing to shift these cash-based societies to ones that use banking services and products?

For me, the interesting thing is that cash in many economies is there and continues to be there. What we can learn, however, is that in many countries the adoption of technology is not quite as difficult as we make it out to be. And we always make use of the tech or the cellular industry [as an example]. I think if you look at the number of devices that people have now in markets, it is incredible.

So [it is] possible to bring in technology that enables people to have ease in payments and we are actually rolling out, as we speak, our card capabilities across all the countries that we operate in. And that means not only issuing the plastic, it means making sure that you have got enough retailers that see value in not taking cash all the time because the cost of taking cash is very expensive. It doesn’t matter where you are in the world, it is very expensive. So what we are doing is beginning to deploy… devices with machines where you can actually swipe.

Yes, [Africa] has a very immature payment method right now, but we are making good progress.