Barclays to spend sh3.5b on integration with Nile
Aug 06, 2007
THIS year, Barclays Bank concluded a deal to buy 100% stake in Nile Bank. <b>Sylvia Juuko</b> talked to Nick Mbuvi, the managing director<br> <br><b>QUESTION: What progress has been made since the take-over deal was sealed this year?</b><br><b>ANSWER:</b> We have been working on an integration pr
THIS year, Barclays Bank concluded a deal to buy 100% stake in Nile Bank. Sylvia Juuko talked to Nick Mbuvi, the managing director
QUESTION: What progress has been made since the take-over deal was sealed this year?
ANSWER: We have been working on an integration programme with a fully fledged team. We have harmonised products across the two banks. The banks are selling similar products which cut across all segments like the mass market, small and medium enterprises (SMEs), prestige proposition for Barclays and corporate banking. We are going to move both banks onto a single platform. We are also rolling out a new banking platform which will kick off when we achieve integration by the end of November. It is a high-end platform which will avail more products. Today (August 1) is a milestone because we achieved legal integration and will operate as one entity with Nile Bank turning into a division of Barclays.
QUESTION:How much has been budgeted for integration?
One million pounds. This doesn’t include branch roll out but the integration alone.
QUESTION: What are your plans regarding branch expansion?
We have rolled out seven branches upcountry. We are in Arua, Gulu, Hoima, Iganga Lira, Masindi and Masaka. That is part of our objective to improve our distribution across the country. We plan to continue expanding in the second half of this year. Today we have a combined network of 31 branches and over 50 Automated Teller Machines (ATMs).
QUESTION: Why is Barclays changing its strategy now?
Following a review of our strategy, we think there are opportunities with a wider range of customers than we have had previously. The acquisition of Nile Bank was to make sure that we started serving segments we weren’t reaching before. When you look at the demographics in Uganda and the economic growth achieved, there are opportunities we can tap and also provide banking services to more people. Emerging markets like Uganda provide a huge opportunity for growth. We are keen on making sure that we grow our business in the key markets where we are already represented.
QUESTION: What innovations or new products should the market anticipate? Are you looking at mortgage?
We are looking at mortgage and will roll out the product during the year. There are still few challenges like lack of developers but we are seeing a lot of interest from new developers and given the rentals in Kampala, there is lack of supply. The mortgage market provides an opportunity for that. We have already rolled out an account called Sanyuka which is targeting the mass market. It matches Nile Bank’s Cash Source. It is more flexible and applies the concept of pay as you go, meaning it is mainly ATM-based. If we grow our distribution and reach more of the population, we need to introduce products that connect with the wider population. We will increase our focus on SMEs and come up with new products in the course of the year to target this segment of the market.
What happened to the Bankom deal with Nile Bank?
We are going through integration and it comes with challenges. Nile Bank was using Equinox and we are on a different banking platform. Bankom is also switching transactions for Nile Bank yet Barclays uses another switching mechanism. So as we integrate, it will become easy from a reconciliation perspective to limit the number of systems. In addition to that, there is a forth system we are migrating into. Because of that complexity, it becomes necessary to make sure that everything goes smoothly by first switching off some of the systems to make sure that we integrate banks first and then we revisit the future of our switching mechanisms and the way forward. The Bankom’s decision was not a security risk because we have firewalls. When we achieve full integration in November, we will look more strategically where we want to go with ATMs, card management and switching solutions.
QUESTION: What progress has been made since the take-over deal was sealed this year?
ANSWER: We have been working on an integration programme with a fully fledged team. We have harmonised products across the two banks. The banks are selling similar products which cut across all segments like the mass market, small and medium enterprises (SMEs), prestige proposition for Barclays and corporate banking. We are going to move both banks onto a single platform. We are also rolling out a new banking platform which will kick off when we achieve integration by the end of November. It is a high-end platform which will avail more products. Today (August 1) is a milestone because we achieved legal integration and will operate as one entity with Nile Bank turning into a division of Barclays.
QUESTION:How much has been budgeted for integration?
One million pounds. This doesn’t include branch roll out but the integration alone.
QUESTION: What are your plans regarding branch expansion?
We have rolled out seven branches upcountry. We are in Arua, Gulu, Hoima, Iganga Lira, Masindi and Masaka. That is part of our objective to improve our distribution across the country. We plan to continue expanding in the second half of this year. Today we have a combined network of 31 branches and over 50 Automated Teller Machines (ATMs).
QUESTION: Why is Barclays changing its strategy now?
Following a review of our strategy, we think there are opportunities with a wider range of customers than we have had previously. The acquisition of Nile Bank was to make sure that we started serving segments we weren’t reaching before. When you look at the demographics in Uganda and the economic growth achieved, there are opportunities we can tap and also provide banking services to more people. Emerging markets like Uganda provide a huge opportunity for growth. We are keen on making sure that we grow our business in the key markets where we are already represented.
QUESTION: What innovations or new products should the market anticipate? Are you looking at mortgage?
We are looking at mortgage and will roll out the product during the year. There are still few challenges like lack of developers but we are seeing a lot of interest from new developers and given the rentals in Kampala, there is lack of supply. The mortgage market provides an opportunity for that. We have already rolled out an account called Sanyuka which is targeting the mass market. It matches Nile Bank’s Cash Source. It is more flexible and applies the concept of pay as you go, meaning it is mainly ATM-based. If we grow our distribution and reach more of the population, we need to introduce products that connect with the wider population. We will increase our focus on SMEs and come up with new products in the course of the year to target this segment of the market.
What happened to the Bankom deal with Nile Bank?
We are going through integration and it comes with challenges. Nile Bank was using Equinox and we are on a different banking platform. Bankom is also switching transactions for Nile Bank yet Barclays uses another switching mechanism. So as we integrate, it will become easy from a reconciliation perspective to limit the number of systems. In addition to that, there is a forth system we are migrating into. Because of that complexity, it becomes necessary to make sure that everything goes smoothly by first switching off some of the systems to make sure that we integrate banks first and then we revisit the future of our switching mechanisms and the way forward. The Bankom’s decision was not a security risk because we have firewalls. When we achieve full integration in November, we will look more strategically where we want to go with ATMs, card management and switching solutions.