BIG! STRONG! RELIABLE! Sounds familiar? To most Zambians that sequence of adjectives would call to mind nothing else but one, ZANACO bank.
Being of service to the country for the past 53 years, ZANACO is more than a household name. It is part of Zambia’s banking history.
Living up to its slogan
On 3rd February 2022, ZANACO announced that it was the number one bank in Zambia as measured by Profit After Tax and the first Bank to reach K1 Billion Profit After Tax. A source of pride for not only the bank but also the Zambian people. It may sound self-explanatory but what is Profit After Tax (PAT)? This is the amount that shows how much a firm makes during an operating year, after the necessary deductions including expenses, liabilities and taxes have been paid. PAT not only shows the amount available to shareholders but also reflects how efficiently a firm managed its costs.
The Journey to 1 Billion Kwacha PAT
If “success is the sum of details”, what are the details behind ZANACOs success? A long journey. Just 7 years ago ZANACO ranked 5th on market share held in Zambia which is not the place the country’s indigenous bank wanted to be. This called for a bold strategy. Every well functioning system requires a good engine to drive it. For ZANACO, it began right at its core starting with Leadership.
To complement the chiefs, in 2015, ZANACO appointed a seamless combination of accomplished executive leaders, Charity Lumpa as Board Chairperson, Hastings Mtine as the Vice Chairperson and Henk Mulder as CEO, later on in 2016 with the primary task of getting ZANACO to the top.
The journey was not at all swift. 2016 saw ZANACO making losses. A 25% reduction in net profit from over K117 Million in 2015 to K30 Million in 2016 in efforts to clean up the bank and start off on a clean slate.
Despite this setback, focus was vital to the Strategy’s implementation. For ZANACO, focus stayed on the market and its own strengths – what it was and is good at – providing the banking service to the people.
The process came with transformation, having the belief permeate not just at the top from senior managers and management teams but all the way through to staff and customers, that truly ZANACO is big, strong and reliable. This served as the inspiration behind the strategic transformation, the need to demonstrate that ZANACO is a local bank, run by local people, and it can get back to number one, be able to not only compete with other banks but also support the government in its efforts to revamp the economy.
Overcoming the odds
The stage was set, with the right people in place to take the lead, the right blend of customers and supportive shareholders. Despite suffering a temporary downfall, the shareholders stuck right by ZANACO’s side, giving more reason to its confidence, importance and relevance to the Zambian economy in greater times of test and for sure alas, difficult times time come in the Covid-19 pandemic.
Turbulent economic times befell us all in 2020. Some companies died while others thrived during the pandemic. Strategic positioning was critical during this period.
“You must show leadership in times of crisis. The first thing we acknowledged was that we had to change the way we were doing things and needed to start with our own people. We said to our own people that whatever the government is doing, you must also comply.” said Board Chair person Hastings Mtine when he sat down for an interview with this author on 4th February 2022 at the ZANACO Head Office in Lusaka.
In reference to compliance, the Board Chair pointed out the importance of enforcing prescribed measures such as ensuring that people were correctly wearing their masks, sanitizing among others, a constant message sent out to staff and customers alike.
A second realization was that the bank could adapt to face difficult times and this was seen when people could work from home and work responsibly. “The proof of the pudding is in the results,” he added.
Indeed, without the continued hard work put in even from home, ZANACO would not be able to realise its results. “They believed in the message we were telling them and that we could achieve the results that we had set and that’s what it takes to be a leader. To make people believe that they can achieve things.”
Hastings Mtine succeeded Charity Lumpa in 2019 as Board Chairperson of ZANACO bank. To survive in banking requires strict adherence to the guidelines and rules of a financial institution and it’s the board’s responsibility to see to it that there is strict compliance and discipline within the financial institution. Obviously coupled with hard work. “There’s nothing that comes easy. It’s always hard work and we asked our people to work hard and they worked, our people are fantastic!” he appreciated his team.
“I would like to think we have a happy environment, and we try to make it that way. Covid was a typical example, we allowed people to go off but work from home. We were actually surprised that a lot of people were actually anxious to come back to the office.” he added. This is evident in the milestone achievement.
But this success did not happen overnight. The compounding effects of the hard work and support is perceived in the yearly increment in earnings per share and payments of dividends over the past 5 years. K43 Million in 2015 and 2016 was paid in dividends.
Given the losses incurred in 2016, the executive decision was made to withhold payment of dividends in 2017 and only K5 Million was paid in 2018. Delayed gratification resulted in K36 Million payment of dividends in 2019. In 2020, K75 Million was paid in dividends, an over 70% increase since 2015.
With the achievement of K1 Billion Profit After Tax in 2021, ZANACO will see the highest dividends paid on record for the bank much to the delight of shareholders. This is without a doubt a euphoric sense of success for the leadership and their goal set out to get ZANACO back to number one position.
The challenge with getting on top is staying on top. Analogously, you can win the league but to stay at number one, you have to be on top of your game because you have all your competitors there.
How does ZANACO intend to stay number one?
“To be on top of your game for ZANACO means that we must be able to satisfy our customers because they are our first priority. To keep our customers happy, give them products at an affordable price and ensure that we are relevant in keeping up with the change in times, especially from a technological point of view,” Mr. Mtine said, stressing the importance of their customers’ satisfaction. “Their loyalty to us is because they believe in us so we must always make them believe that ZANACO is always there for them.”
What makes ZANACO stand out from other banks is its delivery of service to all without class distinction?
“We are not there for a certain segment; we go right across, right from the grassroot to the top. For all Zambians.” To this end they have deliberately chosen to remain in each of the provinces so that whilst other branches may close, alternatives are provided by means of ZANACO agents. With the largest fleet of agents in the banking sector spanning over 8000, ZANACO continues to reach out to everyone.
Certainly, ZANACO has cemented itself as the leading commercial bank in the country and looks forward to staying on top. “Once you have your house in order, everything will flow so as I leave ZANACO, if we have done our work properly and have the right people steering the ship, they can drive the ship for as long as it takes to be number one and we have the right people in place,” Mr. Mtine expresses his confidence in the bank led by Ms. Mukwandi Chibesakunda who took over as CEO in 2020.
It is evident that with the right leaders, a hard-working team and the ever-loyal support of customers and shareholders, ZANACO will continue to tell the tale of being, BIG! STRONG! RELIABLE!