Mohamed spoke to the Business Daily about his priorities, what he is bringing on board and what to expect from his leadership.
Having spent time in regional roles in Zambia, the United Kingdom and Tanzania, how has this experience served you as you take up the new role?
The roles have given me opportunities. First being an insider gives me some good insights on what has been going on locally and inside the bank while having a view from out there.
I can be critical looking at it from the outside but I also have a broader perspective.
On the other hand, when you travel and work out there, you learn a lot and pick up different things from a product perspective and from some of the solutions we’ve tried elsewhere and have worked.
Intrinsically as a leader, some of the skills you pick around management, transformation and culture are also important.
Those journeys, some of which have been difficult, prepared me for the next phase of what we have to deal with.
You cite a bumpy ride in primary school in Garissa…then started off as a teller at Barclays before becoming a branch manager. How has that journey shaped you?
There is no magic answer to the question. I guess it’s about having a vision and being clear about what you want to do and want to achieve.
It’s about staying the course and being committed; it is resilience... You can imagine 29 years; not every day is a walk in the park, there are days when you deal with real challenges and issues.
You’ve spoken a lot about mentorship and making sure that we’ve got leaders within future generations.
I have had so many mentors and some of them are peers who challenge each other. I’ve also had many leaders at the organisation that have played that role for me.
I’ve had leaders who believed in me, helped me take the next step and took risks on me, knowing I was not 100 percent ready.
I have also tried to be that person for others, which stories I am proud of. The current CEO of Absa Tanzania is someone I hired into the bank and he has ended up as my successor; in Zambia, we now have two from my team that are now managing directors.
In Kenya, I have a few examples of people in my team who went on to run other banks, including the current Housing Finance CEO.
There have been concerns around banking sector liquidity in recent weeks as we look at the interbank lending rates and so on. Is this something that is of concern to you?
Overall, liquidity challenges will differ from bank to bank. Our average liquidity is, for instance, in the 39 percent range, and so, there is no major concern there.
For the industry overall, liquidity is okay, and you, therefore, find banks have the opportunity to invest in not just client assets but also government instruments which is always a good sign of liquidity.
Within the industry, however, there are different players at different liquidity levels and that’s where that overnight pricing comes in.
You have come from a very different regulatory environment; do you feel there should be changes to local policies?
If you look at how central banks have worked through this tough period, it has been quite good.
We have been able to address issues collaboratively between ourselves, the CBK and the government in unprecedented times even as we have had to upgrade some of the normal tools available.
As we anticipate your bank's first-quarter earnings results next week, banks have been asked how the sector remains profitable through the shocks.
First of all, that’s a good place to be. The last thing you want for any economy is for the banking sector to have issues.
It’s a critical sector supporting all others and in many ways, it’s also an indicator of the direction the economy is taking.
If the banking sector performs well, that is always a good thing. However, it’s not something that just happens.
We spend a lot of time doing the right thing, running a sustainable business, dealing with risk management and having proper governance so as the macros unfold, you can take the right action at the right time.
Absa has the approval for risk-based loan pricing and your outlook was implementing the same going into the second half of 2023, what has been the progress so far and what are your parameters on new loan pricing?
That is still a work in progress. We, however, view risk-based pricing as just not a pricing component.
We view it as a big positive for the industry in terms of not just creating higher rates for higher risk but ensuring that people who actually pay and who are low-risk customers get the benefit as well.
On the whole, we see it as a big benefit for the client and the industry in terms of managing risks going forward.
Under the 2023 Finance Bill, the National Treasury has proposed lower excise duties on fees for money transfers by banks.
Sure! Overall, the drive to support digitisation and ensure that the economy becomes more digital reduces the total cost for the economy to the extent that some of those fiscal measures address themselves to that issue.
That way, it helps us to provide more solutions to customers in a way to make digital payments better.
You now have a life insurance unit and have recently announced the return to the custodial business. What else should we expect?
One big priority is to scale up those businesses that we have started. Yes, they are fast-growing, but are just a small part of our combined business. We are looking at partnerships, especially in fintech.
We have started an insurance business but I would say that is a comfort zone as the industry is in close proximity to banking.
I agree with you, today our name should just be Absa. There is more we can do with the institution in terms of helping the economy and becoming much more embedded with what’s going on in the overall ecosystem whether you are looking at medical or education.
There are many entities doing a great job that need a banking partner which is where we come in.
