Transcript | Amedeo Anniciello

Arthur Katalayi (host): Good afternoon, this is Arthur Katalayi, senior partner of A2k Advisory. This is the second episode of The Right Advice Podcast and today we’re having the CEO of the Standard Bank in DRC, Mr. Amedeo Anniciello. Thank you for having us Mr. Anniciello.

Amedeo Anniciello (guest): Good afternoon and nice to meet you, thank you.

Arthur Katalayi: Well, Standard Bank is the biggest bank in Africa, the biggest corporate investment bank in the DRC and it’s been in existence for 160 years, but you guys have been 30 years in the DRC. Obviously, you finance a lot of projects in the mining sector, the natural resources sector in Congo but also in Africa generally speaking. I’m going to start with your background. You’re of Italian origin born in South Africa, can you tell us more about it in regards to your interest in banking as well; how it started?

Amedeo Anniciello: Yeah, thank you very much. So yes I am of Italian origin, I was born in Johannesburg and grew up there and did all my schooling in Johannesburg and then went to college. In college I did a diploma in financial management and a diploma in international financial management. And then, I studied law as well during that process. Once I had graduated I looked at the different opportunities in the market and sat down with my dad and said: “where do I go from there?” and at that point I had received 3 different jobs offers, one was to go to a law firm to go and do articles and I had to spend 5 years doing articles, and I said: “No no, I am too young to be locked away from 5 years pushing a pen around”; and the other one was at a company that was listed in the Johannesburg Stock Exchange who wanted a law officer and that was quite an interesting proposal; and the third one was Societé Générale, the French banking group. They had a small presence in Johannesburg at the time and I decided to go into banking. With the goal to say “once I get into banking I will have many opportunities that will arise and I will do what is best for me from a banking perspective or from a carrer perspective having a banking experience. I started within risk, specifically credit risk and then grew through the ranks, and after about 5 or 6 years I was the head of risk for SocGen (Societé Générale) in Johannesburg. I was offered an opportunity to transfer from Johannesburg to Cape Town to go and transform the office there and to rebuild the office that we had in Cape Town. That was quite an interesting move from a risk background to a business background. So 38 years later here I am still in banking waiting to decide what it is I want to do next.

Arthur Katalayi: Fantastic, it’s a very good combination: Law and banking because obviously it’s the two categories that regulate all of our daily lives in regards to what we do.

Amedeo Anniciello: Absolutely and if you look at over the years, and especially since 2007 – 2008 financial crisis, there is a much higher levels of compliance of governance that is imposed in banks, in terms of making sure that regulations are followed and that the process that the banks use are a lot more aligned and regulated and are taking chances on different market environments. So I think certainly since the 2007-2008 crisis, banks are far more regulated. They are far more restricted in their approach to how they manage their businesses, and I think it becomes a less risky environment. But we are in the business of risk – so the question is how you mitigate your risk, how do you manage those risks in order to ensure that you‘re able to perform the business as well as efficiently as we can, providing return to your shareholders and keeping your deposit money safe.

Arthur Katalayi: And in regards to those professional experiences that you had, you’ve worked in many African countries, what I can remember Gabon, Algeria, Zambia, South Africa …

Amedeo Anniciello: Yes, so this is the 6th country in Africa that I worked in, if you include South Africa. So from South Africa I was transferred to Gabon with CitiBank at the time and I spent 15 and half years in the bank. Initially I was part of the team that opened the office for Citibank in Cape Town then, 2.5 years in Gabon and then I went to Zambia for 3 years, then from Zambia to Algeria for 3 and half years, Algeria to Ghana, Ghana to DRC. And interestingly enough in each of those cases, it’s was in particularly difficult time in the histories of those countries. 

Arthur Katalayi: So what have you drawn as a conclusion in regards to each of those experiences?

Amedeo Anniciello: Looking back at my career over the last 38 years, I think a lot of my time has been spent on restructuring, reorganizing and refreshing businesses and particular branches to make sure they become viable, contributing enterprises. And that’s basically what I’ve been asked to do.

Arthur Katalayi: And how do you manage the countries, cultures and realities that are different from one country to another?

Amedeo Anniciello: So, fortunately I have been born in South Africa, I consider myself to be an African, and I have been working with different cultures, ethnicities, ideologies, political environments, languages, even religions in some cases. You learn to adapt in each of those markets. And that’s what has been one of the factors. Being very adaptable, and learning quickly to understand those markets, who the people are, and what their requirements are, how do we integrate the business with the local environment.

Arthur Katalayi: Very interesting. So from Citibank and then you came to Standard Bank, it is also a very interesting transition.

Amedeo Anniciello: I was in Ghana with Fidelity Bank for a year, and that was a short transition between the two, and then from Fidelity I joined to Standard Bank where I have been for almost the last 5 years.

Arthur Katalayi: And Standard is the biggest bank in Africa, and since 2007 you have partnered with the ICBC (Industrial Commercial Bank of China) which is the biggest bank in the world.

Amedeo Anniciello: Yeah, ICBC acquired 20% of Standard Bank, and it’s in a very strong relationship with the Chinese and from their perspective we are the primary corridor for Chinese business and investments into Africa, also for Africa back to China. Being the biggest partner together in our respective market, we have a very strong relationship together and we provide very strong synergies.

Arthur Katalayi: And that gives you almost what? Unlimited financial power to finance appropriate projects?

Amedeo Anniciello: I wouldn’t go far to say unlimited, because everything has to be managed and measured according to the requirements and in a lot of cases we’ve partnered with other banks and local markets; we do syndication, we do deals, we do various transactions, where we are not the sole banker to their transaction.

Arthur Katalayi: As you know, DRC has many extraordinary assets in regards to natural resources but there has been a lack in liaison between the assets and the capital available for many projects to get going. How is that possible to be able to liaise the two in an environment that is complicated in many instances? I have had the thought to be sometimes naive and thinking that because the assets are there and the capital is there, usually there shouldn’t be any issues to get projects going but the business climate makes it that’s sometimes it is a little bit more complicated than that…how about from your perspective in different countries?

Amedeo Anniciello: Absolutely and I’m thinking, look across the different countries all over Africa, and the risk profile from an economic risk, political risk, sovereign risk. Each one of them has their particular nuances. If we look at the DRC, it is blessed to have $24 trillions of mining resources or mineral resources in the ground. And when you say that there is capital available, people also look at the risks to deploy that capital in the particular market. One is the risk of putting my money into that country but I’m not able to repatriate that capital in due course. How do I get my investment return from that country? So investors take a very close look at different countries and in making that decision to invest capital there has to be a very high level of certainty that I’m going to be able to get the capital back plus the return on the investment. So capital is available globally, and DRC like other countries across Africa have had its political risks and economical risks, and in the mining sector people have been more optimistic in terms of the mining investments. Outside of that it’s been a little bit more restricted, we’ve seen some of the big multinational corporations exited the DRC, and when I take a look back in history, at the time of independence, DRC was the second most industrialized country in Africa after South Africa. So the probability or the propensity for DRC to get back to that exists. It’s not going to be a question of how do we resolve the political risks, how do we manage the economic risks, and how do we make sure that the country promotes itself to continue on the forward trajectory to achieve those objectives. Now I think that President Tshisekedi has done a reasonably good job in addressing things like corruption, and try to put the country on a much more positive footing, there has been support from the IMF, The World Bank, various of the embassies provide a lot of support to the local government and I think that’s good. Not a question of we had the elections couple of years ago, the next set of election is at the end of 2023, the country is in the process of preparing for those elections and it’s absolutely critical that the country goes forward to have free, fair, transparent, bloodless, non-violent elections which are accepted globally, whatever the outcome and that the country then continues on the positive momentum forward.

Arthur Katalayi: And in that regards going back to mining, what are the specifications on the projects that you usually finance; artisanal, industrial or semi industrial?

Amedeo Anniciello: We focus primarily on big industrial mining corporations, some of the majors; we don’t get involved in any artisanal mining that is not our business model.

Arthur Katalayi: Semi-industrial?

Amedeo Anniciello: We support the mining companies of the ecosystems of those mining companies; so suppliers to the mines of potential clients of the bank. In terms of artisanal mining we know that the government is in a process of trying to put better control and regulations around artisanal mining, and I think once that is in place then potential projects around that may become more attractive, from the Standard Bank perspective.

Arthur Katalayi: The demand for copper and cobalt is going to quadruple between now and 2050 and it’s also going to double from now and 2030 and many mining projects related to copper and cobalt need to go online to be able to absorb the demand for that particular metal and especially taking in consideration that the electric vehicle demand that’s going to skyrocket and also everything relative to computers, phones that use cobalt; how do you see all the demand with the global energy transition that is currently taking place and the will for the world economy to shift from fossil fuels on greener economies than what we have currently.

Amedeo Anniciello: Yeah, so absolutely I think that if one looks over the last 2 years or 2 and half years, because of the higher demand for copper and cobalt, some of the mines that have been in care or maintenance have come back into full production and that has ramped up the output – so that is critical, we’ve also seen one of the very big mine that has come online its yields is very good and its production is very high. So from that perspective we see continued growth in the mining industry, we also started to see that some of the big mining companies have started to reconsider coming back into the DRC having exited previously and we think that there are some significant opportunities there. Demand for copper will continue to grow because populations around the world will continue to grow and as the emerging middle classes continue to have higher demand for all sorts of things whether it is fridges, or air conditioners or copper piping for water and so on… Demand for copper will continue to grow as it has been. For cobalt I think it’s been a similar sort of story and you talked about electrification of motorcars, computers, etc. as the world becomes more digitized they will continue to be a growth from that perspective. Where I see a challenge with cobalt maybe is that in the future, there may be new technologies that will replace cobalt, as a resource…

Arthur Katalayi: It’s already the case, it’s under study…

Amedeo Anniciello: Yeah, will Tesla continue to have the demand on cobalt for its batteries in the future? We know there will be a strong demand for the next 20 years, but post that what then? We know that some of the new mines take 5, 6 years before they become productive and have 20 years of capacity after that. So, I think there are a lot of opportunities in mining, and I think from a DRC perspective, it’s blessed with not only copper and cobalt but it’s got gold, diamond, tin, and many other different resources which are in high demand and which have high prices … The question is how do you manage the risk associated with mining and some of the areas where those resources are, and especially along the eastern frontier of the Congo where we know there are a number of challenges.

Arthur Katalayi: As we all know, private companies, try stay as far away from politic as possible because you are there to make profits, you are there to be able to have a positive impact in the communities that you operate in, but we see today there are situations and it’s hard to get away from what’s going in the world; now we have a situation in Russia which is a political situation but when we look on the economic situation it’s seems like there is going to be less access to Russian oil and gas and we see the situation in Saudi Arabia and Qatar in which those countries want to shift away from oil because their economies is solely based on that and obviously it’s going to accelerate the energy transition; how do you think DRC can position itself within those whole economic political changes that are happening currently and that are going to have an impact on different economies, such as African economies?

Amedeo Anniciello: I think from the DRC perspective, the point is that the political transition must continue on a positive trajectory as I said earlier, because it’s only with political certainty that you can invest capital, the political certainty also brings stability. With that stability comes economic growth. Those are the drivers that will certainly empower the country to move forward into the future. They have the resources, for me I think where some of the biggest opportunities exist is to do beneficiation of some of these resources in country rather than exporting raw materials and importing finished goods. How do we go back to a point in time when Peugeot, Ford, General Motors, Nestle, and Unilever had manufacturing plants in the country? Those are the things that the country should be focusing on in terms of doing local beneficiation. We have 7 million hectares of irrigated arable land in the country. How do we ensure that the products from that arable land gets to market? Where there is the domestic consumption for international export? If we don’t have the infrastructures to get those goods to market, they sit on the farm and go bad. So it’s important that we know the population are growing, how do we make sure that from our DRC perspective, the potential to use that arable land efficiently and transform that output into benefit or beneficiation for the country is critical.

Arthur Katalayi: For sure. It’s a lot to take and a lot to do, that we must create the business climate that is appropriate for the investors to put their capital in and there is no way around that…

Amedeo Anniciello: Absolutely, if I look at the 5 years I have been in the DRC, in natural time I see already some transitions; I´ve seen how people are starting to change some of their ideology, some of the philosophy, some of the archaic mentality that is: “DRC is a high risk country, we can’t go there…” to say: “DRC is a high risk country, how do we invest in and achieve our objectives…” and I think for me that is a important and certainly from our perspective at  Standard Bank as we do across the continent, we said: “Africa is our home, we drive our growth…” and our philosophy for DRC is the same; “How do we drive the growth, in the DRC?”

Arthur Katalayi: It makes sense; we have to think about it. The show is called “The Right Advice”, What would be your advice to an individual or an enterprise, to be able to thrive in DRC, an environment that is in many instances complicated, on access to capital for small enterprises or even big enterprise or individuals is not easy or at least not as easy as in North America in Europe, how do you bridge that gap of difficulties between the ambition that you have and the goal that you want to reach?

Amedeo Anniciello: Firstly, I wouldn’t give advice to anybody, I’m not an advisor. I am a banker. My viewpoint is that, coming to this country one need to be aware of what the challenges are and we know that it is country that has very high regulatory, controls … In coming into the country make sure that you follow the regulations to the spirit and letter of the law because if you try and bridge that you’re going to fall far from regulation and you will get into trouble. So, be mindful and respectful of the Congolese. They are the people that earn and run the country, incorporate them into your business, and makes sure that in terms of driving your own  business strategy that is you clearly understand what the end  objective is, and don’t get involved in any mischievous  behavior.

Arthur Katalayi: Thank you very much Mr. Anniciello, we wish Standard Bank the best in DRC, I know this is your 30th anniversary this year.

Amedeo Anniciello: That’s great, yeah…

Arthur Katalayi: So, I’m sure you’re going to be here for next 30 years, and 50 years and so on…

Amedeo Anniciello: And there’s no reason why not? We’ve been here 30 years, the group has been around for almost 160 years and certainly our ambition is to continue to grow through this market.

Arthur Katalayi: Absolutely, we thank you very much and all the best to Standard Bank.

Amedeo Anniciello:  Thank you very much.