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Market Capitalization Ranking of Kenyan Banks, not a metric that Bothers, CEO Standard Chartered Bank Kenya




Mr. Kariuki Ngari, CEO, Standard Chartered Bank Kenya

1.What is Standard Chartered Bank Kenya best known for? Out of the 42 registered banks in the country. Where does it have its economies of scale and where do you want to take it? 

We are known for our digital expertise and our innovation. Our underlying platform for serving our clients both on the corporate side and our retail clients is superior technology. That is how our clients describe us and they expect us to be on the cutting edge of technology. 

Our bank is on the phone. For instance, our retail clients, it has over 70 – 80 services that an individual can do on the phone. On the Corporate side, we have our platform called Straight to Bank.  When it comes to digitization and innovation, we are on the top. 

Second, we are also known as a connector bank. We are the only international bank operating in Europe, America, and Asia. The bank connects by bringing capital into Kenya to support clients who want to expand into Kenya or out of Kenya, in Africa or Asia, and also supporting governments. That’s our niche and that’s where we play. 

2. You took over the reins of leadership in 2019, since then, the bank has implemented strategies that have witnessed an increase in women’s representation in senior management positions. Gender parity on the board has improved from 23% in 2019 to 45% currently with women at the management level and across… and marginally 45% – 54% respectively. What triggered the move and what sort of impact has it had on the impressions of the bank?    

I believe we are a bank that believes very strongly in inclusion. Diversity and inclusion are part of our ethos. It’s part of our culture. It’s routinely said that 52% of our population is female. Kenya is half half, it’s 52:49 or 51:50 there. If you think about it from a business perspective then it doesn’t make sense to exclude such a big part of humanity in the organization. 

Today about 57% of our total population is female. But when you start going into the more senior ranks, women’s fingers start dropping. So we have to take very concerted efforts to ensure that women are represented equally well. Our ambition is to be at 50:50 whether it’s at the rank and file, senior management, the board, or the executive membership, our goal is to be at 50:50. We have work to do especially in senior management.

At the board level, we are OK, in fact, it’s 54% in terms of representation. So it’s very concerted and how has this helped? You see the best of our female colleagues bringing their best to work and then they stay on… so there is competition and you are not losing any talent because talent is not confined to the male gender alone.

Talent is in both genders so when you deliberately work to ensure both genders have equal opportunities and they can rise to the top of the organization then an organization such as Standard Chartered Bank Kenya is able to reap positive dividends. 

3. Standard Chartered has been in the local market since 1911. What has been its mission in Kenya? 

We have been part of the transformation of Kenya when you think of what Kenya was in 1911… There is a book I have been reading about Kenya in those days so you can imagine when you talk about the transformation, when you talk about facilitating trade, when you talk about commerce, that is what has been at the heart of Standard Chartered Bank of Kenya.

We are a bank that has been known for facilitating trade. Our purpose is to drive commerce and prosperity within our unique diversity. And this is something that makes us proud of our heritage. I meet clients who tell me they are grandparents. And that they opened their accounts in the 1930s, some in the 1950s, so we have been part of what has happened in Kenya in those years.

The transformation that you have been seeing, we are a big part of that. Finance is what moves an economy, it’s the oil that moves an economy, so for us to have been there for that long, and we continue to be there in different shapes and forms. It is something that we are really very proud of and we will continue to be here for a long time to come. 

4. Standard Chartered has been a signatory to the United Nations Compact since January 2019. How has the local unit benefitted from being a signatory? 

I see you did your research. Where did you dig that out from? That is the global compact…

I think when you look at the aspirations of the United Nations, and when I look at the SDGs, there are 23 of them. In terms of how the world can become a much better place for both men and womankind, it was imperative for us to have been a local signatory.

First of all, I serve on the board and I am the deputy chair, which helps especially when you are helping the younger SMEs, and the much smaller SMEs to really have a set of values that they can leverage on, allowing them to align themselves with international organizations such as ourselves.

These things are there because we will always go for the global cause, but when you come to the institutions in Kenya, the SMEs for instance, need somebody to help them in areas of say governance, or anti-corruption. 

So that is what the difference has been in our role as being in the global compact locally and also in my role as the deputy chair, it helped me help a lot of the local organizations in the local chapters who do not have that global scale so that they can be able to do some of the things they do.

There are a lot of companies that we have helped in matters of sustainability and now they are able to define what it means for them and this allows them to have Key Performance Indicators (KPIs) of how they can have very clear codes of conduct, how they can have clear KPIs they can measure to.

5. On 13th June 2022, The Lender launched its first Sustainability Impact report highlighting efforts made to accelerate stewardship towards the environment widening economic participation between and within communities and addressing the growing imbalances brought about by globalization. To date what milestones can you report as having been achieved as a result of this initiative?

Also, you indicated the bank would raise 10% of its revenue from sustainable resources. With the initiative pegged on the bank’s sustainable economic growth perspective, which has two client business segments, how are we doing on this front?

First of all, it was something that we are really proud of in terms of launching that sustainability report. It’s the first time that it has been done within the Standard Chartered group, so it’s something we are very proud of. My colleagues in corporate affairs, brand, and marketing are extremely proud of that milestone. 

Secondly, it helps you audit yourself. You see, these are goals you set for yourself and there is nothing important in life as you know as setting your own goals. And then you look back and say: did I manage to deliver or hit the goals that I set for myself? So that sustainability report helped us reflect and actually go through and see where we have fallen short and what we need to do, what more we need to do and that helps. Just to give you a couple of examples.

If I look at one of the areas that we worked very hard at since I became CEO it’s when we talk about our supplier base. We talk about women’s businesses, I mean women-owned businesses.

There are very few organizations that can actually tell you how many suppliers to their organizations are women-owned businesses. So we established a baseline. Let’s go through our database and see all suppliers, how many of those are singularly women-owned businesses. And when we talk about women-owned businesses we mean businesses owned by women with  51% and over ownership – not tokenism, not Mr. and Mrs.

They have to hold the company majorly. Previously it was very bad for it was rated at only 17% of our entire supplier base. So we spent most of 2019 to establish the baseline. 

The second line we looked at is, what is our spend in that 17%. It was a paltry 2% of our entire spending and you know we spend a lot of money. And then we set ourselves a target. We said we want to hit 30% of our suppliers by 2024 to be women and we need to increase our 10%. At least we move from 2 – 6 %  because we need to do a lot more to get to 10%.

So those are the kind of milestones with key deliverables that we set for ourselves and that we wanted to hit and be able to look back and say, when we hit this milestone, let’s set the bigger one. 

There are also some internal ones that we have done. When I look in terms of energy consumption, we have reduced our energy consumption by about 51% across the network. In this building ( headquarters) we recycle 99% – 100% of all the waste in this building. And that is something we are really proud of. And then when you look at water, in this building all our water is recycled, rainwater is harvested, when you go to our bathrooms, that is the water we use. 

So these are very specific actions we have taken for ourselves. 

And also we are single-use plastic-free. So you will not find a bottle of plastic in any of these buildings. And that has extended to 17 of our local branches. These are very clear milestones that we have put. We told ourselves that we know the damage plastic is causing to the environment and therefore we cannot on one hand be talking about the plastic scourge and then go ahead to using plastic. 

So these are some of the milestones we have delivered and we are very happy. And we see that the way we are going we should be carbon neutral by 2025. It’s very deliberate, very clear metrics, something we are tracking very closely. 

6. Prior to your current role you were global head of retail distribution for Standard Chartered Bank in Singapore and you were instrumental in formulating global strategies in building the future for retail branches and … through digitization as well as revision of branch models. How has this background helped you steer the local community here?

I think one of the things that really helped. There is a Kikuyu proverb that states that a child who does not leave the mother’s homestead thinks that the mother is the best cook. And that’s what this taught me. When I left here, I used to think I used to be world-class until the day I left Kenya and worked in Singapore for 3 years. Now I’m very circumspect in using that word.

World Class is really different. I mean just to give you an example, I watched Singapore Formula 1 and then you see, then you look back and remember those guys are driving cars at 300 kph on a street and they take corners, that’s world-class driving. I mean how do you drive a car at 300 kph for 2hrs? And you are able to navigate? Think about driving between Kenyatta Avenue, Koinange Street, Latema, just within Nairobi, and within the city center and you are moving at speeds of 300. 

So those kinds of things start making you reflect and say wow. World Class is a different thing again. But also it showed me how far we can go. There are some things we do very well in Kenya for instance Mpesa was a really good innovation.

But there are also a lot more things there to learn. It allowed me to see what scale is in terms of when you see how huge those economies are in that part of the world. It allowed me to explore Asia a lot more. So you learn a lot about Asia and the transformation taking place there and it allowed me to see what is possible not only in Kenya but within Africa.

But we have a long way to go and so if we lay the foundation correctly, then there is no reason why we cannot be able to get at least where Asia has gotten; some of the countries in Asia, when you think about whether its Singapore itself, whether its South Korea, this has happened within a lifetime, in one generation.

Not something that has happened over 100s of years like in Europe. Those are the insights it gave me. And then working and meeting different cultures. When I was there, I spent a lot more time in Asia itself. I said look I know Africa and the Middle East. For many years I have been here, let me spend time in markets that I don’t know.

So I spent a lot of time in markets like Korea, Hong Kong which are some of our biggest markets, Singapore itself, and  India. And that gave me another perspective. Convenience is at the heart of it. Technology is what is going to be the biggest enabler. But also the role that banks and financial institutions can play to really make a big difference and be the voice of good in any of those markets.

So it was an exciting outing, challenging but good. It made me get out of my comfort zone. We use that word again loosely, it’s good to get out of your comfort zone and go to a place you are not comfortable with. 

7) Early this January a local newspaper reported the NCBA group and Absa Bank Kenya had risen and overtaken Standard Chartered Bank Kenya in the market capitalization ranking of the Kenya business index. Does this metric matter to you?

No, it doesn’t. What does that mean? It doesn’t mean anything. I think for me the most important thing is that we are very clear about what we need to do. Very clear on our strategy and we have routinely delivered very good financial outcomes. When you look at the dividend we declared of Ksh, 22, I think in total, the shareholders are very happy. The number of shareholders who I meet, some I do not know, just tell me to thank you for that dividend.

That’s what is important. It’s not about where our ranking is in the market cap. Market capitalization is a factor of the share price and availability of the shares and we know that Standard Chartered shares are very much sought after. They are not as available as so they are very much sought after…. So hardly anyone ever sells. 

So it’s not a metric that we even think of. You are the one who is telling me. We never look at it. For me it’s about whether I  am serving my client, whether are we meeting their needs, whether are we able to solve their problems, and whether are we able to, when it comes to shareholders, give a dividend. I think we are. I don’t know why you did not look at the dividend payout… It’s one of the best…. It was the highest.

There was a report that was released yesterday by Standard Investments Bank. It rates us very highly.  

8)Standard Chartered Bank integrated its mobile banking platform into the Airtel money payment system in Kenya and it’s the only bank in Africa to have a real-time, online integration payment system with a telco with no human intervention. Is this statement correct and if so, what is so special about the system? 

  I think first of all, when you look at what is happening today, the consumer really wants to do things digitally. Yes, you hear there is an argument that people want to visit branches, but not our clients. We can see from the statistics that it is clear that people do not want to visit branches. And this happened during the  Covid era. Covid accelerated it.

And then our investment into the digital platforms both for the retail and corporate clients, has made it extremely convenient to do whatever you want to do without visiting a branch. 

When you and I were in school, we had to create time to go to the bank. Today you don’t have to. You could be in the middle of something and you are also doing your banking. You could send someone to do something and they send you the till number and you make the payment.  That’s the convenience we are giving our clients.

We are giving our client no reason to think about whether I need to think about cash, I mean I just traveled, I’ve just come back. I never thought for one minute to get dollars. There was a time when traveling abroad when you visited the bank to get dollars. Now you just get into the plane and go because your account is there with you. I was thousands of miles away and I was making payments in my shamba in shags.

They did not know where I was. They were sending me a message ‘Please I need Ksh. 8000 to pay for the labor’. I just go to the Mpesa app, I give the guy Ksh 8000, he doesn’t know where I am. Such convenience. Before you would have met them, sat down, told them this arrangement, left them the cash, then everyone knows you’ve gone. You can only know when someone is gone when you call them and the ringtone will inform you that one is out of the country because it’s different. 

So that’s why we do these interventions. In terms of that investment, those linkages with telcos. We no longer see telcos as competition,  we see them as partners. We don’t see fintech as competition, we see them as partners, and we partner with them. Some of the offerings we have on the phone are actually being offered through others, not through ourselves.

Because they are the ones who specialize in that. We are the face of it because when you want to come, you want to see Standard Chartered, the underlying platform is somebody else. So those linkages, those partnerships are what makes a big difference in our offering. 

9)How do you rate the local banking ecosystem in regard to the number of banks? And when you scan the market, you realize that the local banks are ahead in relation to asset capitalization. Does this worry you? 

No, I think it’s good for Kenya. Could we do with fewer banks? I think… so that we can enhance local competition. It’s very clear that in 42 months that there is a very clear difference between what you call the tier 1 banks and tier 3 banks, there is a very big difference.

It has benefitted this country, and that is what has driven financial inclusion that is obviously a lot higher than in most sub-Saharan Africa. So that helps. Financial Inclusion is important because it has powered this economy.

I think when you look at what Kenya has been able to do especially in the private sector. We talk about the SMEs. SMEs in this country have been assisted by the banking system, to be honest. That’s what powers trade, credit. So a strong financial system powers an economy.

You cannot have a weak financial system and a robust economy… So it’s something that I think we are all ready for. I am very proud of the stability in the banking sector, and hopefully, it is going to continue helping the Kenyan economy to keep growing and diversifying.

10)When you make an exit from the bank, what do you want to be remembered for? 

A couple of things in terms of driving matters of sustainability, I think that’s important and not just by talking about it. But also being able to say this is what we have done.

We committed to planting a million seedlings two years ago and we are 230/ 250. We looked and said ‘Everybody talks about planting trees but where is the source?’ So we partnered with Kenya Wildlife Services and they got us some space at Nairobi Arboretum and that’s something that I’m really proud of.    

Secondly is in terms of how we stand in terms of diversity that we talked about. How do we ensure that the platform that is laid is going to continue being sustained in terms of ensuring that diversity is entrenched in the bank? And what is more important is understanding that you could achieve diversity but not have inclusion.

You can be in meetings and you are not talking the language that makes everyone feel included. So that is something that is very important, looking out for minorities. For example, there are some colleagues who are visually impaired and when I sat with them one day and they gave me feedback, I was like oops, things we take for granted, that we are not looking at the lifts, bathrooms, and being deliberate to solve the challenges that they face… These are things we need to do. When a new technology is being rolled out, sometimes we don’t remember a different software. It comes as an afterthought.

Looking out for that is something I want to be remembered for. And then how do we ensure our employees bring the best of themselves to work? I want to be remembered for creating an environment where people feel comfortable to challenge the status quo.  They can feel comfortable changing the processes because they are the people who are receiving the process, the people who are actually using it, the ones who will suggest differences, and also the clients to feel that yeah, he made a big difference. 

And finally, of course, a strong financial outcome. At the end of the day, there are shareholders. I meet them sometimes when I travel out of the country and during our AGM and you see it makes a big difference to a lot of these, they are the people who bought these shares especially when Standard Chartered launched.

Now they are elderly, late 70s, and you see the difference that payment makes in their lives. That is very important. So I want to be remembered for having kept the cheque going and not doing anything stupid. 

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