Where did your finance journey start?
I am a qualified Chartered Accountant. I joined Ithala in September 2015 as the finance manager and have since progressed to my current role of CFO which was effective July 2023.
What have been the greatest highlights of your finance career ever since you started at Ithala SOC Limited?
For almost everyone who chooses a career in finance, one of their greatest career aspirations is to become a chief financial officer. So, I was no exception. My ultimate dream was to become a CFO of a large organisation, and I have achieved that! And that is my greatest career highlight!
Have there been major changes within your space since you started working at Ithala a few years ago, and now that you are a CFO?
There have been considerable changes, especially with the regulatory reporting requirements. As we know, the financial service sector is highly regulated, and we need to ensure we are fully compliant all the time. Requirements have become more stringent over the years. As the CFO and executive director, I need to ensure that Ithala is compliant with all the relevant regulatory and legislative requirements. Also, becoming the CFO, I now must become more strategically focused and contribute significantly to the overall success and growth of the organisation. With the previous roles in finance within Ithala the focus was more on finance, accounting, and reporting.
Can you provide the overview of your top priorities and goals when you were appointed as a CFO?
My top priority and goal as the CFO of Ithala is to help drive business growth and ensure long-term sustainability. Along this journey, we need to ensure that our mandate of banking the unbanked is fulfilled.
Banking is a highly regulated industry. As the CFO how are you managing the cost of compliance, and which regulatory compliance projects are top priority for Ithala?
Currently, the two major regulatory projects we are embarking on are the Anti Money Laundering (AML) project and the Risk Data Aggregation and Risk Reporting (RDARR). Both these projects and all other regulatory projects do come at a substantial cost which ultimately affects the bottom line. However, due to the importance of these projects and to ensure Ithala remains compliant we do set aside funding for these projects.
The nature of banking is that it is staff intensive, especially if you have a branch model. You also have to contend with attracting and retaining specialised skills, both at the management and executive level. How are you balancing this, ensuring that you attract and retain executives with the requested skills while keeping the salary bill in check?
In banking, the staffing requirements include a wide range of professions. Banking also requires specialised skills in certain areas such as risk management, Treasury, and regulatory reporting, to name a few. Ithala has been lucky to be able to attract the right calibre of staff with these specialised skills and experience. Our executives and managers come with a high level of skills and experience in banking. Our executive team has more than 150 years of experience combined. The experience and specialised skills do come at a premium, like in other specialised fields, we need to cater for this cost.
What financial strategies or changes have you implemented to enhance Ithala SOC Limited’s performance and stability during your initial months in office?
In my first 100 days in office, we have begun with the reprioritisation of our current budget. The current focus will be on implementing projects that will drive revenue growth and ensure regulatory compliance. We have also begun a thorough analysis of the cost to identify areas of optimisation and efficiency improvements. In addition to the above, the products’ team is looking at new product offerings and enhancing the current product offering to drive revenue growth. The team is working on a banking app that will move Ithala into the digital space, enhancing accessibility and providing a seamless financial experience for our clients.
What is your assessment of Ithala’s financial health and performance during your first 100 days, and how does this compare to your initial expectations?
The financial sector has not fully recovered from the Covid-19 pandemic, the July 2021 civil unrest, and the flooding, which has put pressure on a lot of organisations and the people of South Africa, especially the people in the lower LSM. This has in turn affected Ithala’s performance negatively as Ithala’s clients fall within this lower LSM. However, we are now seeing the economy stabilise somewhat, interest rates have reached their peak, and we should see interest decline next year, which will ease the pressure on the consumers. The positive outlook should see an improvement in Ithala’s performance. Ithala’s loan book is very resilient. With the recent sharp increases in interest rates and the tough economic environment, we have seen other banks increase impairments of up to 50%. Whereas Ithala’s impairments have only seen a small increase due to the book being mainly secured loans. In addition to this Ithala’s key liquidity ratio remains very healthy and well above the prudential requirements. This should show the strength of Ithala’s balance sheet and its financial health.
What strategies have you put in place to ensure Ithala’s ongoing stability and resilience?
To ensure ongoing stability we have introduced a few cost containment measures to try and reduce costs. A thorough analysis of cost is being done to identify areas of optimisation and efficiency improvements. Being a cash business where liquidity is of utmost importance, there is a strong focus on liquidity and cash flow forecasting. To assist with this, we have established a Treasury department. The intention is to grow this department as we grow the balance sheet.
How do you see your role evolving in the coming months and what are your main financial objectives and priorities for the next phase of your tenure?
My role before my appointment to the CFO role was mainly focused on financial accounting and reporting. As the CFO the focus is now more strategic. My objectives and priorities in the next few months will involve developing robust financial models, setting financial goals and monitoring performance against them, diversifying investment, and revenue streams, ensuring we secure capital to drive business growth and invest in systems and banking personnel, and exploring strategic collaborations to drive growth.
As a CFO and an executive director, can you describe the balance between your responsibilities as a CFO and those of an executive director?
As a CFO, my primary focus is on strategy and financial matters, such as managing budgets, financial planning, and ensuring the overall financial health of the organisation. On the other hand, as an executive director, you have a broader role that involves overseeing the organisation’s overall strategy and the day-today management of the organisation. An executive director leads a company, providing the necessary oversight to help the board of directors achieve its goals. The balance lies in coordinating financial strategies with the organisation’s broader goals, providing financial insights to support decisionmaking, and collaborating with other executives to align financial management with the overall strategic direction.
What is your overall focus?
Ithala is focused and our main mandate, which has not changed in 20 years is to bank the unbanked and we will continue to focus on that. There’s no intention to change that mandate going forward. Ithala has been running as a separate organisation for over 20 years now. Our aim is not to become one of the big commercial banks that are out there, but is more to serve the people of KZN, especially the previously disadvantaged. We are trying to grow the organisation, and have a wider reach in terms of our footprint in more of the rural areas. We aim to bank more of the unbanked, to provide financial services to such individuals and then to help them grow their wealth as well. We provide savings products for these people to help them grow their wealth through interest income in certain investment products. <