Global political and economic ructions mean uncertain times for the banking industry. We chatted to Nico Botha, the well-travelled CFO of global banking behemoth Citibank's South African operation, about his experiences abroad, transition and the challenges the industry faces in 2017.
Please tell us about your background (education/career).
After graduating, I started my accounting articles in 2003 and successfully completed my CA by the end of 2005. Together with my wife, I relocated to London in January 2007 and started my career in Banking. I held various controllership roles at Goldman Sachs and Credit Suisse, before moving to a role in Accounting Policy at UBS for three years prior to joining Citigroup.
You worked out of London for many years. What did your role for Citi entail?
I joined Citigroup's Accounting Policy team in July 2011, with a remit to widen the IFRS knowledge across the Bank and develop formal IFRS accounting policies for the group. In April 2014, I was appointed the Head of Accounting Policy for Europe, Middle East and Africa (EMEA), covering all Citi's businesses in that region, leading a team responsible for providing technical accounting guidance under both U.S. GAAP and IFRS on the accounting for new and complex transactions, new accounting standards implementation as well as providing input and comment on proposed new standards to the International Accounting Standards Board (IASB).
What key lessons did you take away from your experience there?
I arrived in the UK about 14 months before the 2008 financial crisis began, so most of my career in the UK was post the crisis. Although there were incredibly uncertain times during the crisis, it was very exciting from a career point of view with ample opportunities to learn and develop. There were so many unprecedented issues which arose, that one had to develop a creative way of thinking in order to find solutions. A key lesson that I took away from my experience in London, and especially during the heights of the crisis, was that in the most challenging of times, when faced with the greatest adversity, most great leaders I have encountered have the ability to stay calm and collected. Another lesson I took away from my experience in technical accounting is to fully understand any issue that arose, to 'peel back the onion' as some folks would say. Developing an approach of fully grasping a topic, seeking the root cause of an issue, coupled with a questioning and investigative mindset, has served me well in my career thus far.
What has the transition been like in returning to South Africa?
It is really good to be back. South Africa is such a great country, and despite all the negative publicity that sometimes dominates the papers, there are so many opportunities. The people are fantastic, with so many smiling faces around. I sometimes think that people do not realize how fortunate they are to be living in South Africa, and deem myself fortunate to have been able to gain that perspective from my time overseas. The transition has been fairly easy, as in a way it is coming back home, with the added benefit of continuing my career with an organization I am familiar with, albeit in a different role.
What are the key differences between operations in London and locally?
The only key difference is that the local operation of the South African franchise is much smaller than London in terms of employees. There are approximately 9 000 employees in the UK, versus approximately 300 locally. What I appreciate about only being about 300 local staff is that one feels more intimately involved with different aspects of the local franchise and relationships with other colleagues feels more personal.
How do you view the local banking sector?
Established, sophisticated and safe. South Africa has the ability to produce great talent and that certainly benefitted the banking industry over the years to reach a level of sophistication that would compete with the best in the world. Banking regulation in South Africa is also at the forefront and certainly contributed to establishing a safe Banking sector, with South Africa being one of the first countries to fully adopt IFRS as well as implementing Basel 3 for prudential banking supervision by the South African Reserve Bank.
What developments in the local sector interest you, going into 2017?
Political and economic uncertainty in South Africa will remain during 2017, and may have a significant impact on the local banking sector. A potential downgrade of South Africa's sovereign credit rating remains a risk. There continues to be developments in the regulatory space, and more so than ever, is affecting a bank's strategy. It will be interesting to see how regulatory requirements such as Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR) impact the local banking landscape during 2017.
