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Segun Agbaje, the managing director/CEO of Guaranty Trust Bank (GTBank), is not a popular man. To many, he is aloof, too strait-laced, not your typical run-of-the-mill Nigerian. As one of Nigeria’s foremost bankers, he has a reputation for running a tight and efficient ship, is unflinching in his pursuit and recovery of loans from the country’s systemically chronic debtors who have a sense of entitlement believing that they can borrow depositors’ funds without paying back, and does not give a hoot about those critical of his take-no-prisoners approach to banking.

In the media space, he does not seek publicity, he lets his work speak for itself, could not care less if his story or photograph makes the front page of the newspapers, limits his bank’s advertising spend to what he believes is necessary to market and promote GTBank to a wider audience, and through NdaniTV and Ndani Blog understands the power of the social media in reaching out to youths that make a larger percentage of Nigeria’s and regional demographic where the bank operates.

To me, Agbaje is the ideal banker. He is not my friend and we only interact sparingly and strictly professionally as the need arises. Yet, I cannot help but wish that we had more bankers like him in this country. If we did, fewer Nigerian lenders would have to make provisions for unpardonable impairment charges on bad loans given to delinquent debtors, fewer banks would engage in reckless insider lending that threaten their capital adequacy and liquidity ratios, more banks would recognise that they have a fiduciary responsibility to manage their customers’ deposits with care, and more banks would know how to sweat their assets in the most cost-efficient manner to make the most attractive returns to their shareholders.

In all the key parameters used in defining the size of banks, GTBank, among the five Tier 1 banks in the country, is not by any stretch of imagination the biggest. In terms of total assets, loans and advances, customer deposits, number of branches, and presence on the African continent and beyond, FirstBank, Zenith Bank and United Bank for Africa (UBA) stand head and shoulders above GTBank. By Nigerian standards, the “big three” could be called banking behemoths and are very difficult to supplant. Still, GTBank, with its cost optimisation strategy, asset quality and stability ratios, among others, has over time proved to be the most profitable bank in the country. Its stock has remained the bellwether in the banking segment of the Nigerian bourse for years, signposting the confidence institutional and individual investors have in the bank.

But this article is not about GTBank’s financial performance. Its annual and quarterly reports, including those of its peers, are public documents that can be readily accessed for in-depth comparative assessment. What I have found more interesting about the bank is its focus on corporate social responsibility (CSR) and interventions in key economic sectors targeted at strengthening small businesses through not-for-profit fairs and capacity building initiatives. For two years in a row, GTBank has solely funded and hosted its Food and Drink Fair and Fashion Weekends, making them social and tourist events that feature prominently on Nigeria’s social calendar.

That is not to say that the bank has not focused on other areas of CSR. Its 2016 annual report showed that GTBank spent about 58 per cent of the N449.62 million of its CSR funds on education alone while community development accounted for another 30.8 per cent.

But it is GTBank’s focus on food, drink and fashion that have been the most impactful publicly, bringing together scores of promising, talented and recognised local and international chefs and food vendors, drinks makers and merchants, fashion houses, milliners, fashion accessory designers and leather goods makers in a dizzying, well-put together and well-thought out extravaganza that leaves the public yearning for more.

Both events, which are open to the public, have been attended by several thousands of people, including children, for two years running that have left attendees breathless and wondering how the bank manages to package the two fairs in areas where it has no competencies.

The trick, says Agbaje, whom I had to hound to open up on the success behind both fairs, is getting and attracting the best participants and controlling costs by getting the bank to work directly with the contractors who have to build the stalls, decorate the venue, create play areas and cooking classes exclusively for children, and provide the music, etc., during both fairs; no middlemen or consultants are used by the bank. For him, the fairs present an opportunity for GTBank to deepen its footprint in the retail banking space and increase its SME lending from 2 per cent of the bank’s loan book to 10 per cent over the next five years.

With time, he would also rather extend more loans to small and medium-sized businesses that are more impactful on the economy and achieve a loan recovery rate of 70-80 per cent, than pursue Nigeria’s so-called “big men” with woeful credit track records. Although he was demur about what it costs his bank to host both events, he was emphatic that making money at this juncture is not the overdriving objective, at least not in the short-term, but recognises the long-term benefits not just for GTBank but other Nigerian lenders.

Beyond this objective and given the magnitude of both fairs and their potential to grow into annual events that could attract millions from across the global, Agbaje’s vision is not one to be trifled with. Already, the GTBank Food and Drink Fair and the GTBank Fashion Weekend create thousands of direct and indirect jobs and referrals for hundreds of young Nigerians who have to build the stalls, decorate the venue, and provide the music, entertainment, security and other support services to make them a resounding success. And they have the potential to create even more.

Aside the suppliers, vendors and designers that make brisk business and achieve record sales during the fairs, the Master Classes included in both events are helping to build capacity and drive innovation in the creative industry that has proved to be a major magnate for Nigerian and African youths. By bringing them under one roof, GTBank has also provided a platform for shared services and given them the exposure that help these small businesses to grow and create more employment opportunities.

Without doubt, both fairs are worthy initiatives. But they could be better. In the last two years, GTBank has handled both fairs singlehandedly without support from other institutions and/or the Lagos State government, a direct beneficiary of the events and their spin-offs. In 2016, the food and drink fair alone attracted 25,000 people; this year, it attracted 75,000 people. I do not have the numbers for the bank’s fashion weekends, but I can imagine that the number of visitors will not be far off from those who attended the food and drink fairs.

Given the swelling numbers, both fairs have already started to cause traffic gridlocks on the days they are held. They are also attracting touts and hoodlums who mill around the roads leading to the venue and try to pounce on unsuspecting visitors as they alight from their cars or walk to the venue. On a positive note, big and boutique hotels, restaurants and food caterers on the Lagos Island experience an upsurge in occupancy rates and patronage by participants and the international media who have flown in to take part or cover the events. All these translate to more tourist dollars, taxes and revenue generation for the federal and Lagos State governments.

The import of this should not be lost on the federal and Lagos State governments.

They have to do more than just show a passing interest in what GTBank has started.

Given the potential for both fairs to become global destinations for tourists and visitors on the African continent, Lagos State in particular needs to improve on its infrastructure in and around the venue where both fairs are held. It must improve on traffic management and security to ensure that visitors can move about with ease and feel secure. According to Agbaje, in terms of support, the state government has not yet stepped up to the plate, nor has his bank sought for any. But he does acknowledge that with time, GTBank will have to reach out to Lagos State because of the interest both fairs are generating in terms of attendance and participation.

Right now, Agbaje appears to be satisfied with what his bank has accomplished in terms of bringing both fairs to the public’s consciousness. But do the federal and state governments understand the roles that they have to play in institutionalising them and ensuring that they outlast his stewardship in GTBank? Cities like Rio de Janeiro, London, Paris, New York and Melbourne that host major sporting, fashion, carnivals, music and film festivals every year, attracting thousands of visitors do not owe their success just to corporate sponsors but to the municipalities, state and federal governments that understand their roles and lend the required support to the private sector. As such, Lagos State needs to buy into the GTBank fairs as a public-private partnership that can and should work.

BUSINESS

Zenith Bank To Intensify Presence In Retail Segment —- Amangbo

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Managing Director/Chief Executive, Zenith Bank Plc, Mr. Peter Amangbo, said that the bank is pursuing a retail strategy focussed on increased lending to small businesses, households and individuals at affordable interest rate.

He disclosed this yesterday in an exclusive interview with Vanguard Newspaper.

Noting that the sluggish loan growth in the banking industry in 2018 might persist this year due to the slow pace of economic recovery, Amangbo said that Zenith Bank has decided to focus on the retail segment to grow its loan book this year.

He stated: “We just talked about the loan volume going down in the industry but we are now looking at other areas. If the big ones are not taking loans you won’t fold your hands because those deposits that you are holding, the deposits can even sink a bank. If you take deposit and you don’t know where to deploy it, you can die in liquidity, that is what we normally say, you sink in that liquidity.

“So we are looking for other outlets. We are developing our retail end of the market and we are being very aggressive about that. We believe that is an area with a lot of potential.

We are looking at individuals, households, small businesses. We are reaching out to them with credit facilities, whether to pay school fees or to meet some obligations pending payment of their salaries or whether to develop their small businesses, we are reaching out; and about two weeks back, we had an event tagged, “Style by Zenith Bank.”

“The whole objective is to galvanise the economy to let them know that we are well positioned to serve small businesses and to serve households and individuals and even the students; that we are actually there for everybody. That is actually the stage we are moving to.

“We are not that perception that we are elitist; no, we are there for everybody, we have different offerings for everybody. So those that don’t even have security, we have ways of handling some of those things too.”

Referring to the difficulties most banks face in loan performance in the retail segment, Amangbo stated: “We try to be much more efficient in terms of how we do our business in that segment. If you are able to bring down your cost of funds, it is much easier to pass it on to our customers in terms of cost of lending to them.

And we believe if you are going to lend to the retail segment, households, small businesses and you are looking at those high rates, then you are inviting a bad loan.

“So for you to say you are going into retail, you must be sure of your cost of funds, which is what we are very mindful of, and that is why we said that deliberately we must bring down our cost of funds, which is basically what we are doing, so that it makes it much easier for us to lend in the retail space. Because the rate must be affordable, if it is not affordable from day one, you have set out to fail and to have bad loans.”

Zenith Bank has one of the lowest cost of fund in Nigeria banking industry, recording 3.3 per cent as at September 2018.

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BUSINESS

Union Bank Supports 6,000 Underprivileged Citizens During Festive Season [PHOTOS]

Gbemileke Ajayi

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Union Bank, through its UnionCaresinitiative,provided relief for thousands ofthe underprivilegedby donating over 6,000 care bags containing staple food items.

The campaign, now in its third year,is co-funded by Union Bank and its employees. The bags containing nutritional staples included rice, beans, oil, salt and readymade stews. In various parts of the country, the Bank’semployees were seen handing out the bags to people in underserved communities. 

The Bank also made financial donations to over 30 orphanages, care homes and NGOs including Wesley Schools for the Blind and Hearing impaired as well as Pacelli School for the Blind and Partially sighted children, all under its UnionCares umbrella.

The Head of Corporate Communication and Marketing at Union Bank, Ogochukwu Ekezie-Ekaidem described the initiative as one of the Bank’s ways of supporting charitable causes and contributing to the wellbeing of the needy, particularly during the festive season.

According to her;

Union Bank will continue to lead the charge for social responsibility and impact. We are firm believers in supporting the communities within which we operate. This outlook drives the initiatives we organise and support under our Corporate Social Responsibility pillars.

We launched the UnionCares initiative to touch as many lives as possible during the festive season and it is fulfilling to see the level of impact the initiative has had.”

As part of its year end welfare initiatives, Union Bank also distributed care bags to children at the Makoko Christmas party organised recently by Slum2school.

The UnionCares initiative has come to be acknowledged as a viable platform which supports the less privileged. In 2017, the Bank and its employees also donated thousands of care bags to the needy across the country during the festive season.

Union Bank recently received the ‘Peoples’ Choice Award for theMost Outstanding Company in CSR/Sustainability’ at the 2018 Sustainability, Enterprise and Responsibility Awards (SERAs), emphasizing the Bank’s role as a socially conscious organization, actively supporting its host communities.

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BUSINESS

Diamond Bank Confirms Merger With Access Bank

Gbemileke Ajayi

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The board of Diamond Bank Plc on Monday finally announced its merger with Access Bank Plc expected to be completed in first half of 2019.

Both banks recently denied media reports of any merger.

Uzoma Dozie, the bank’s Chief Executive Officer, said in Lagos the board had selected Access Bank as the preferred bidder with respect to a potential merger of both banks.

Dozie said the potential merger of the two banks would create Nigeria and Africa’s largest retail bank by customers.

He added that the transaction to be completed in the first half of 2019 was in the best interest of all stakeholders.

Dozie said the completion of the merger was subject to certain shareholder and regulatory approvals.

He said: “The proposed merger would involve Access Bank acquiring the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a Scheme of Merger.

“Based on the agreement reached by the boards of the two financial institutions, Diamond Bank shareholders will receive a consideration of N3.13 per share, comprising N1 per share in cash.”

Dozie also said the transaction would include the allotment of two new Access Bank ordinary shares for every seven Diamond Bank ordinary shares held as at the implementation date.

“The offer represents a premium of 260 per cent to the closing market price of 87k per share of Diamond Bank on the Nigerian Stock Exchange as of December 13, 2018, the date of the final binding offer,” Dozie said.

He said the bank’s shares would be absorbed into Access Bank at the completion of the merger and Diamond Bank would cease to exist under Nigerian law.

“The current listing of Diamond Bank’s shares on the NSE and the listing of Diamond Bank’s global depositary receipts on the London Stock Exchange will be cancelled, upon the merger becoming effective,” he added.

Dozie said the proposed combination with Access Bank would create one of Africa’s leading financial institutions.

“The board of Diamond Bank believes that the proposed combination of the two operations provides an exciting prospect for all stakeholders in both businesses,” he said.

Herbert Wigwe, Access Bank Chief Executive Officer, said: “Access Bank has a strong track record of acquisition and integration and has a clear growth strategy.

“Access Bank and Diamond Bank have complementary operations and similar values, and a merger with Diamond Bank with its leadership in digital and mobile-led retail banking.

“This could accelerate our strategy as a significant corporate and retail bank in Nigeria and a Pan-African financial services champion.”

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