‘Economy will get better if private sector consumption is sustained’

Ugandans going about their daily economic activities in Kampala City. For the economy to grow and thrive, such businesses and private sector consumption must not only be sustained but also improved. PHOTO BY STEPHEN WANDERA

What you need to know:

This year came with its own share of economic challenges that led to the revision of the national growth downwards based on anticipated reduced public expenditure and impact of drought. However, seasoned banker Olufemi Martins Omotoso is optimistic that the year will turn out well if the private sector consumption seen towards the end of 2016 is sustained. Daily Monitor’s William Lubuulwa had a conversation with him, and below are the excerpts:

Briefly tell us about Guaranty Trust Bank, and how it benefits the people of Uganda.
Apart from being a major employer of labour, we are a banking/financial service provider, a strong platform facilitating businesses in Uganda and a responsible corporate citizen.
Guaranty Trust Bank is a leading bank in Nigeria that has been in existence for about 27 years now. The bank is quoted on both the Nigeria Stock Exchange and London Stock Exchange.
We are also the leading banking brand in Anglophone West African countries. GTBank just started its launch into Francophone African countries and Cote D’ivoire is our entry point.
We are in the UK and also in the East African countries of Kenya, Rwanda and Uganda. We hope to open to the Tanzania public in the second quarter of 2017.

Managing a bank of Guaranty Trust’s magnitude is no mean feat given the challenges the banking industry is currently going through in Uganda. What are your experiences at the top of the bank, especially as an expatriate MD?
It has been a great and fascinating experience so far in Uganda because Ugandans are generally friendly and receptive people. we have regulators who are quite strict and thorough constantly adding value to the industry.
This is not the first country where I have held this same position and I can comfortably say that the challenges are not peculiar to Uganda.
I believe the industry is evolving and will continue to improve as long as all stakeholders are ready to embrace changes and keep their eyes on the ball.
Sector players continue to post mixed results with some hardly making a profit in the market. Others are being taken over by more strong ones. Is this a sign that Uganda’s banking industry is troubled?
It is no sign of trouble at all. Do not forget the banks all got to the market at different times, at varying growth phases and also have differing perspectives or approaches to tackle the market.
While some of us have a select niche or exclusive market to play in, others are retail in outlook or deliberately choose to remain small and agile. The industry profit keeps growing and I am sure that ultimately all players will be profitable.

The industry is struggling with many non-performing loans. How different is your situation in the retail segment especially after you acquired Fina Bank?
For us at Guaranty Trust, we believe Africa is our tuft and over the years have developed unique sets of strategies to address issues around loans.
GTBank does not have NPL as a major challenge after the acquisition because of our strong risk acceptance criteria.
We have activated the strategies and I believe it is working for us so far.

Legislation is a key in business operations. Are you for or against capping interest rates in a country where lending rates are prohibitive?
I am strongly against it. I believe in the free market economy where things are left to the dictates of demand and supply.
I see capping interest rates the same as dictating prices of commodities as milk, cement or rice in the market. Apart from the different cost profile for each bank in Uganda, the risk acceptance criteria are different and as such pricing should be allowed to take a free course.

Some consumers think the market is saturated with more players than needed. What is your view?
With the growing population in the country comes more opportunities. It is never too saturated especially when a player identifies a niche in the market, there is always room for some more.
There is a natural course of events and I believe the industry will evolve. In line with that, banks choose what business they are interested in doing and also determine the volume or size based on its capital.
To become a serious player or a force to be reckoned with in corporate banking you might need more than the minimum capital. This may determine the trend of events in the future and banks can determine whether to be a big player or remain small or be swallowed up.
Mainstream banking seems to be making a decline in terms of customer attraction and retention. One would think the era of traditional banking is gone. How are you tapping into digital products?
We are a dynamic organisation and have won many accolades in the African banking space, a recent one being the most digitally innovative bank in Africa awarded by Euromoney in 2016. We have remained the most profitable bank in Nigeria for the last four years.
In an economy like Nigeria, customer service, robust tech platform and innovation have helped us achieve the feat.
Service is at the centre of our proposition and we have a superb internet banking platform deployed in Uganda which is same as what we have at the parent bank and our UK operations.
We have the benefit of leveraging the strength of the group’s product development ability and thus have many innovative and well adapted e-products targeted at various markets we play in.
For instance we have GTCrea8 targeted at the students and GAPs for business banking, ChurchApp for churches, GTPay and GTCollect for school fees.
Guaranty Trust Bank is also the first MasterCard issuer and merchant acquirer bank in Uganda.

As a banker, what is your projection of Uganda’s economy in 2017?
Every year comes with its peculiar challenges although economic growth in 2017 has been revised downwards based on anticipated reduced public expenditure and impact of the droughts.
I am optimistic that the year will turn out well if the tempo of private sector consumption seen towards the end of 2016 is sustained by the easing of monetary policy.

You are the CEO of Guaranty Trust Bank (Uganda) Ltd. But who exactly is Olufemi Omotoso?
That’s a tough one. I am a family man and more importantly a Christian and that forms the tenets of my dealings on all fronts.

Olufemi Omotoso

Mr Olufemi Martins Omotoso

Mr Olufemi Martins Omotoso, is the chief executive officer and managing director of Guaranty Trust Bank (Uganda) Ltd since 2014.
He also served as executive director GTBank Liberia for three years, before moving to GTBank Gambia as managing director for three years.
Femi, as he is fondly called, has been described as an extraordinary achiever who has made immense contribution to GTBank’s success within the bank’s history.