African banking sector goes mobile

With growth in Sub-Saharan Africa remaining robust, high levels of market activity in Mozambique have led to a need for more immediate banking. In under 20 years, BCI has taken the helm, reporting extraordinary results


BCI’s best ever result was taken from its annual accounts for 2012, which have been approved and include growth of 36.88 percent in its net income (2.66 percent in 2011) to 1,239 million meticais (around $43.5m). In a year characterised by a particularly difficult economic environment – on an international level into an across-the-board crisis and contraction of investment scenarios – and on a local level into a significant increase in banking sector competitiveness, much has changed the financial landscape.

The most relevant indicators of this growth are the customers, with 563,500 (up 38 percent over 2011); 128 branches (up seven percent over 2011); 320 ATMs 320 (up nine percent); 3,862 POS terminals (up 57 percent); and 1,906 staff (up 12 percent). The turnover of 82,342 million meticais (around $.768m), was up 22 percent over 2011.

Fast track indicators
Market share indicators show very high levels of activity that, as a whole, continue to be in line with the preceding indicators, considering the above referred-to environment,market share (deposits) are down 28.18 percent, market share (credit) is 30.22 percent, and market share (assets) are down 27.25 percent.

The difference between the current leader (credit: 2.91 percent against 3.95 percent in 2011; deposits 2.41 percent against 6.15 percent year-on-year) has been significantly reducing. This is a remarkable achievement for a bank that is only 16 years old.

Financial strength indicators are also truly remarkable. Special reference should be made to the reduction of the loans-to-deposits ratio from 80.38 percent to 64.1 percent and improvement in asset quality based on a reduction of the non-performing credit ratio to 0.97 percent (against 1.13 percent in 2011). The solvency ratio of 12.43 percent remained at much higher levels than the eight percent established in the regulatory framework established by the Bank of Mozambique.

2012 was the last year of the implementation of the Strategic Vision approved for the five-year period of 2008 to 2012, which defined that BCI should consolidate as a universal and structuring bank in Mozambique’s financial system. In continuing to implement the plan, the main points are the maintenance of branch office network expansion with the opening of new branches, BCI Exclusivo centres and spaces and its geographical expansion, including districts not covered by the banking system.

As a result of this dynamic approach, BCI’s branch office network is currently the most comprehensive in terms of the banking sector cover, from northern to southern Mozambique and also has the highest percentage cover of around 33 percent in peri-urban and urban zones.

By increasing the size of the customer portfolio, investment and the results of relationships with customers are reflected in almost 155,000 new customers (up 38 percent over 2011).

Introducing mobile-to-mobile banking
In terms of electronic channels, BCI continued to implement a policy of expanding and developing its electronic network, with nine percent and 57 percent increases in its number of ATMs and POS terminals (3,862 active items of equipment, up by 1,402 units) respectively over 2011.

This expansion was accompanied by on going improvements to customer service, resulting in a 39 percent increase in the number of transactions, 45 percent increase in transactions by financial volume and reduction of means of payment downtimes. Other highlights include:
– BCI’s introduction of an innovative mobile-to-mobile bank transfer service, enabling mobile phone users to make cash withdrawals from ATMs without the use of a bank card, allowing the bank to provide customers who do not have a bank account with basic financial services.
– BCI’s ongoing development of its electronic means of payment facilities, creating specific products for the miner’s segment as part of a joint project with Mozambique’s Ministry of Labour, comprising the use of bank accounts in Mozambique for the differed payment of wages component of the remuneration of Mozambican miners working in the Republic of South Africa (with the development of a global offer comprising, inter alia, an interest-bearing current account and debit card with a special design and specific conditions).
– The bank has developed a debit card component for the young people’s segment (between the ages of 14 and 21) with the introduction of its “Tá-se” debit card. It has, at the same time, continued to expand the supply of its university student debit cards under various protocols entered into with Mozambique’s major universities.
– BCI has maintained its temporary ATM placement policy in locations on which events with a major mediatic and image impact are held. Special reference should be made to the installation of equipment at FACIM – Feira Internacional de Maputo (“Maputo International Fair”), in two air-conditioned kiosks exclusively for the use of the ATMs, providing various banking services to hundreds of thousands of national and foreign visitors and exhibitors.

The described actions resulted in a large volume of cash withdrawals from ATMs, of more than 36 billion meticais (around $120.6m), over the year as a whole, up 45 percent over the preceding year and 39 percent by transactions.

Banking remotely
Special mention should be made of the BCI Mobile platform, on account of its introduction of several features, reflected in growth of 297 percent and 451 percent in the number of customers and transactions performed on this channel, respectively.

In association with BCI Mobile, the “Tako Móvel” service was launched as part of a concept associating a virtual bank account with a mobile phone number (on any of the national networks). It enables transfers to be made from bank accounts to a mobile phone, whose user does not need to be a bank customer.

The recipient, in turn, can perform transactions involving payments for services, topping up mobile phone credit balances and even transfer amounts to other mobile phones. The recipients of the transfers can also make cash withdrawals on BCI’s ATMs without associated costs.

The three million transactions made by mobile phones is on a level of the 3.8 million transactions using BCI’s POS terminals, in spite of the fact that the number of bank cards in Mozambique is much higher than the number of customers using the BCI Mobile and Tako Móvel services.

BCI also pioneered the local implementation of a project for the issue of EMV chips in Mozambique, increasing the security of its customers’ transactions. It provided a service for the payment of customs duties on its diverse channels, particularly internet banking, ATMs, contact centres and even the use of mobile phones, in addition to setting up a dedicated bank counter.

An intense level of activity involved the design and launch of new products and commercial promotion of banking products and services, improved commercial relationships and securing of new customers, notably:
– The launch of diverse promotional savings campaigns, with comprehensive, innovative solutions providing low earners with access to high interest rates over all maturities.
– The launch of campaigns designed to encourage the use of means of payment (debit and credit cards).
– The launch of innovative credit and debit cards, tailored to various market segments (corporate, affluent, private), and others in association with the national airline company (private label) and the major national universities (co-branded), facilitating young students’ access to credit and their use of banking services.
– The launch of a branch office network for the affluent segment – as an entirely groundbreaking market concept in Mozambique – where customer account managers are responsible for relational management in more private, select ambiences. These are already available in Mozambique’s main development hubs.
– Boosting an innovative offer to micro and small enterprises, particularly the BCI Negócios, BCI Empresas and BCI Mineiros cards, which essentially operate with an overall credit aggregate on short-term liabilities, providing autonomy, flexibility and a free credit period.
– Cooperation agreements with public bodies and companies, providing access to special banking conditions and promoting the muse of banking.

It extended its commercial partner network, providing BCI card customers with a range of discounts on their purchases of goods and services on a diversified network of goods suppliers and services providers.

Working closely with SMEs
Under the Special Line of Credit for the Development of African SMEs, one of the eight measures defined by the Government of the People’s Republic of China to consolidate cooperation between China and Africa, BCI and the China Development Bank Corporation (CDB) entered into a financing agreement for a £20m commercial line of credit, with a maturity of five years, exclusively to finance projects boosting the activities of Mozambique’s SMEs.

This amount will enable BCI to increase its financing capacity to this important segment of the economy, help to boost their activities and promote the development and growth of Mozambique’s economy.

Successful negotiations began with BIO – Belgian Investment Company for Developing Countries. This institution has granted a $15m senior loan to BCI. The loan will be used by BCI for lending to SMEs. This is the first sizeable local currency transaction by a foreign lender, and also BIO’s first investment in Mozambique – a partner country of the Belgian Development Cooperation.

BIO’s loan will enable BCI to provide loans in local currency with longer tenors to 15 to 20 SMEs, hereby contributing to maintaining or creating approximately 450 jobs.

It will demonstrate the viability of long-term local currency financing from foreign sources, and contribute to increasing access to financing by SMEs, which have essentially local currency revenues and require long-term financing for investment purposes.