NC Bank a wholly owned subsidiary of NIC Bank Ltd is one month old in business and is targeting corporate companies for now but will in future offer services to the other categories of clients. The bank's Managing Director, John Okulo, spoke to The Independent's Julius Businge about the expectations of the bank.
You are about one month old in business. What is the experience so far?
NC Bank opened its doors to the public on June 1 and there has been a lot of interest in our products and services and we expect to reach as many corporate companies as possible. We are supported by the adequate minimum capital of over Shs25 billion that the bank has.
What reasons are behind your coming to Uganda?
Over the past decade, Uganda has had one of the fastest growing economies in Africa. Kampala has become an important business hub with a large number of companies setting up. The country's middle class is growing and this has encouraged further investment by businesses. Uganda's position as a gateway to South Sudan, Rwanda, Burundi and DRC has helped to increase investment by both local and foreign companies that are tapping into the regional export market. There are also many logistics companies that are setting up base in Uganda so as to efficiently link both Uganda and the neighbouring countries to the port of Mombasa as well as to serve the emerging oil and gas industry. Our investment in Uganda is driven in part by the opportunities arising from these developments.
You are targeting corporate businesses yet other players in the financial industry already have that product. How competitive is your product?
Many local companies and investors from the region are faced with the challenge of competing with imports or not having sufficient capacity to grow their exports. These companies would like to develop a working relationship with their bankers, one that is based on the bank's ability to identify solutions to their needs, in particular the need to grow and compete effectively both domestically and internationally. Most banks offer products that have similar features. It is however difficult to replicate excellent service or relationships. NC Bank will be developing long term relationships with its customers pegged on excellent customer service and a vision to grow our businesses together. This will be our competitive advantage.
NC Uganda is a subsidiary of NIC Bank of Kenya, one of the largest financial service providers in East Africa. Where does such a status put the future of NC Bank Uganda Ltd?
As a wholly-owned subsidiary of NIC Bank Limited, we stand to benefit from the group's resources. As at December 2011, the Group's total assets were in excess of US$950 million while its total capital base was in excess of US$125 million. Since 2007, NIC Bank has positioned itself as a "One-Stop-Shop" financial services supermarket making all financial services products available under one roof. This means that NC Bank will have access to both the Group's financial strength and its product knowledge and expertise. This will enhance NC Bank's ability to deliver its promise to customers in Uganda. NIC Bank is the largest provider of asset finance facilities in East Africa. We believe that our asset finance products will play an important role in enhancing our customers' ability to purchase machinery and other forms of moveable assets that they require to grow their businesses. We will be leveraging off our group expertise in this area to provide our customers with relevant solutions.
NIC bank has presence in most East African countries. What are the reasons behind that?
The East African region has evolved into one large economic block. Businesses are increasingly operating across the geographical borders either through subsidiaries or third party distributors. Our establishment of a presence in Uganda is therefore in line with on-going economic integration of the region.
The investment climate in Uganda is still unpredictable with inflationary pressures still being the highest in the East African region at 18.5%. Do you think you joined at the right time?
Our entry into Uganda is based on a long term view of the economy, the opportunities that are available and our ability to add value to our customers. Most countries in East Africa have been faced with high inflation rates. The positive and most important aspect for an investor is that the high inflation rates and other economic challenges facing Uganda are being addressed through policy interventions. The past 10 years have witnessed significant investments in most of the key sectors of the economy including infrastructure, power, telecommunications, and manufacturing.
You were once working for Stanbic Bank Uganda as head of Corporate and Investment banking before you joined NIC Bank in Kenya. Now that you are back as Managing Director of NC Bank Uganda Ltd, how are you going to relate with your former employer and other players in the industry?
As you are aware there are 25 commercial banks in Uganda. All of us are competing for customers. This means that banks need to be continuously innovative to remain relevant to their chosen customer segment. The competitive environment will work to the benefit of customers as there will be a greater variety of service providers to choose from. Our relationship with other players will be based on healthy competition.