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FIRST BANK: STILL STANDING GIDIGBA 125 YEARS AFTER

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BY ALEX OTTI

This week marks the celebration of the 125th anniversary of the existence of the First Bank franchise in Nigeria. This stands the bank out as one of the earliest institutions established in West Africa, and obviously, one of the handful still in existence today.

 

The bank began as the Bank of British West Africa (BBWA) in 1894 and quickly began playing the role of  the Central Bank of British West Africa in the absence of a regulator at those medieval times in the sub region. The bank witnessed the amalgamation of the Northern and Southern protectorates and the eventual independence of Nigeria in 1960. It was founded by Alfred Lewis Jones, a shipping magnate who imported silver currency into West Africa through Elder Dempster shipping company also owned by him.

 

In 1957, the bank changed its name to Bank of West Africa (BWA). Sequel to Nigeria’s independence in 1960, the bank began to extend more credit to indigenous Nigerians as most of its credit facilities were hitherto concentrated on foreigners living in the erstwhile colony.

 

Standard Bank  acquired the Bank of West Africa in 1966 and changed its name to Standard Bank of West Africa. In 1969, Standard Bank of West Africa incorporated its Nigerian operations and its name had to change once again, this time to Standard Bank of Nigeria Ltd (SBN). In 1971,  SBN listed its shares on the Nigerian Stock Exchange and placed 13% of its share capital with Nigerian investors. Following the implementation of the indigenisation policy of the then military government soon after the civil war, Standard Chartered Bank reduced its stake in SBN to 38%. This action led to another change in name to First Bank of Nigeria in 1979 as Standard Chartered Bank insisted that since it had lost majority control, the bank should no longer bear its name since by the action, it had failed to be its full fledged subsidiary.

 

This marked a watershed in the history of the bank as more Nigerians were appointed to the board and it began to look and operate more like a Nigerian bank. The bank had subsequently moved from a limited liability company to a publicly quoted company and back to a limited liability company which it presently is. The latest status is in compliance with changes in the regulatory environment in 2012 that required that the group operates as a holding company, with the bank as one of its subsidiaries or spin off other operations not related to banking. That marked the birth of FBN Holdings which presently has the bank and non bank subsidiaries as part of the group.

In 1982, First Bank opened a branch in London and converted same to a full fledged subsidiary, FBN Bank (UK) in 2002. Two years later, in 2004, a representative office in Johannesburg, South Africa, debuted. At the moment, First Bank has subsidiaries or representative offices in France, China, Democratic Republic of Congo, Gambia, Sierra Leone, Ghana, Guinea and Senegal. At the last count, First Bank had presence across 10 countries in three continents. It operates from over 750 locations and employs close to 22,000 people. Its has over N3.3trillion in total assets. It also boasts over N2.5trillion in Customer deposits with a tidy 19% Capital Adequacy Ratio (CAR). The bank has over 1.3m shareholders and over 14million customers.

 

Before going further, I must, in the full disclosure tradition of this column, declare that I joined First Bank as an Assistant General Manager on April 1, 2001 and left 10 years after, having risen to the position of Executive Director in 2011. I joined as part of the transformation team of the bank set up following a decision to institute comprehensive reforms in the bank. The project, titled, “Century 2, the New Frontier” effected a total change in the way things were done in the bank. Readers will realize, in the course of this essay, that a major part of the resilience and longevity of the bank has to do with its ability to keep pace with changes,  not just in the banking ecosystem, but the global environment.
It is pertinent to note that so many institutions and companies disappear after only a few years of existence and therefore, there must be some distinguishing characteristics that have made First Bank, not only to survive but to excel in the last one decade and a quarter. I will attempt to share my own thoughts on this, which would definitely not be exhaustive.
One thing that stands the bank out is that everything it does is woven around strategy. In my days at the institution, and I believe it should still be the same now, the bank will start a year with long board and management strategy sessions. These comprise long and short term strategies. The long term strategies normally have a horizon of 5 years while the short term ones are normally between one and three years. I am sure some people, particularly in other environments, will argue that 5-year strategies would be at best described as medium term, but the truth is that in the Nigerian market, 5 years is even too long  given how rapidly things change here!

 

Organizations succeed and fail on strategy. The profound saying that when you fail to plan, you plan to fail fits in perfectly here. It is also said that when you are not certain about where you are going, any road takes you there. Having a clear strategy is one thing, achieving flawless execution is another. I am aware of organisations that are very long on plans and short on implementation. On this, you must give it to First Bank as it is also very good on monitoring and measurement. It is a known fact that what doesn’t get measured, hardly gets done. So, to execute, you must have measurement tools and put in place, a system that not only rewards good performance but also poor performance. I can still remember our strategy sessions as we joined in 2011, where the then CEO, Mr. Bernard Longe reeled out the Big Hairy Audacious Goal (BHAG) of “being twice as large as the second largest bank in Nigeria by a defined future date”. Yes, the bank may not have achieved that goal within the timeframe, but it did have a goal and it did work towards that goal. It is in strategy that you define who you want to be, who you want to serve, how you want to serve them and what distinguishes you from the “guy down the road”. Once you have those agreed, the tools and the people must also be addressed. I have seen situations where management disbands a strategy put in place by the organisation only to replace it with a weak strategy or none at all and in consequence end up as lunch for competition.

 

First Bank is noted for its very strong corporate governance regime. I believe this is at the heart of the longevity of the bank. In our days and I believe it is the same till today, there are things you simply could not do irrespective of who you were. Just like any organsation, the bank had a soul, meaning the key board members who called the shots. But every decision had to go through a process. Having survived over a long period of time, most things were documented and rules were strictly adhered to. I recall that even loan applications from viable businesses of shareholders of the bank must not only be disclosed, but must go through rigorous processes before they were approved. And with the Risk Management function under very experienced professionals with the brilliant Sanusi Lamido Sanusi, who was later to become CEO of the bank and six months later, the CBN Governor and currently the Emir of Kano, you couldn’t go round the process. By the way, it will not be out of place to mention that I was appointed an Executive Director the same day, September 4, 2005 with HRH Sanusi who had joined from UBA. Others appointed same day with us were Oladele Oyelola, Remi Babalola who went on to become Minister of State For Finance, and Mrs Bola Adesola, the current CEO of Standard Chartered Bank. We joined the only surviving executive director from the regime before ours, Mr. John Aboh, who is the current Chairman of Ecobank Nigeria and the then CEO of the bank, Mr. Jacobs Moyo Ajekigbe.

 

As we were appointed, we were handed over a merger and acquisition deal, (some called it outright takeover bid) with another bank with footprints in some other African countries. The deal looked good on the surface, but some of us saw danger in the whole transaction as proposed. We struggled with that transaction for close to two years before resting it. Even though there was very strong support for the deal from some influential shareholders, management thought it was not going to create value for First Bank and therefore had to let it die a natural death. Yours truly had argued then that based on “back of the envelope analysis”, over 60% of mergers and acquisition destroy shareholder value. This my held position was to be corroborated by the Harvard Business Review Report in 2015 which stated that between 70% and 90% of mergers and acquisition destroy shareholder value and in fact fail. The reasons for failure are fully documented in the literature. One is glad that we still have the foremost Nigerian bank with us today celebrating its 125 years anniversary as some of us are persuaded that the situation would not have been the same if that deal went through. On this note, permit me to acknowledge the resilience of Mr. Jacobs Moyo Ajekigbe who showed strength of character as the buck naturally stopped on his table.

 

One of the lessons to learn from the First Bank story is its ability to adapt to changing situations in the environment. For an organisation to adapt, it must understand the environment and be able to read changes and sometimes predict them, even before they happen. The reality is that human beings will normally gravitate around their comfort zones and oftentimes, become very resistant to change. It is only an organisation that constantly interrogates the status quo that will be able to adapt to changes or even lead the change itself. In our time, we realized that we had what our Human Capital Management department referred to an “aging workforce”. Like Clinton would say about Senator Dole, “we did not have a problem with their age, but with the age of their ideas”. The bank started a workforce renewal strategy which saw to the entry of young people with fresh ideas who could relate to the youthful population who were basically in control of the “new money”.

 

To attract them, one needed people that not only looked like them but also reasoned like them. An age band was approved by management for different levels in the staff cadre. This tilted the average age of staff down significantly. Younger people were selected to replace those retiring on account of age. Technology was massively deployed as part of strategy.  Service delivery, which was measured by external consultants, spiked in the positive direction. The bank was able to compete with smaller and younger banks, giving them a run for their money.

 

The brand equity is an important part of any organisation, more so a bank. First Bank benefited so much from its brand. Because some banks had come and gone and bank failures has not ceased even at this moment, the bank benefitted from its longevity. Some people joke about dead people’s money being warehoused in the bank. Besides, what the brand represents is also the conscious effort at tweaking the brand to be in tune with modernity, of course without doing away with the reassuring effect of the ‘elephant’. I remember with nostalgia, the first strategy session we attended in Gateway Hotel, Otta in 2001,  a new colleague, had proposed that the bank should do away with the elephant as the animal is not known to be smart, fast and efficient. We were all shocked at the response he got. Virtually everyone, except those of them that were new, charged at him, in the manner of the elephant he wanted removed. That was the last time he made that kind of suggestion. It was considered a heresy to remove the elephant. The rest of the people that mustered courage to speak about the elephant talked about how to make it nimble, how to face it forward rather than backwards, how to get the elephant to raise one of its legs and generally how it would reflect efficiency in strength.
Finally, I have always maintained that an organisation cannot be better than its people.

 

First Bank has built a culture of employing very sound and good people. The recruitment process is excellent and gives little or no room for manipulation. The reward system ensures that the best people stay and misfits are gradually eased out. The compensation system remains competitive from what I hear and positions at the top are tenured such that the CEO and Executive Directors must retire after a maximum of two tenures of 3 years each. This policy makes it difficult for people to sit tight at those levels and also keeps the top open for deserving younger people to aspire. It is my sincere hope and belief that these time-honoured traditions of First Bank endure.

Let me therefore join millions of Nigerians to congratulate First Bank on this 125th Anniversary celebration and wish the Board, Management, Staff, Shareholders and Customers well. Of course, I pray for the continued sense of camaraderie that exists among the ex-staff of First Bank

 

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UBA Foundation’s National Essay Competition 2019 to Reward Schools with Highest Entries

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UBA Foundation, the corporate social responsibility arm of the United Bank for Africa (UBA) Plc, has commenced the 2019 edition of its annual National Essay Competition in Nigeria with a call for entries.

Now in its 9th year, the essay competition, targeted at senior secondary school students in Nigeria is organised annually, as part of UBA Foundation’s education initiative which is aimed at promoting the reading culture and encouraging healthy and intellectual competition amongst secondary school students in Nigeria and across Africa.

At the media launch which took place at UBA headquarters in Lagos, the call for entries was announced today. Speaking at the event, the Chief Executive Officer, UBA Foundation, Mrs. Bola Atta, said the essay competition, which is in its ninth edition, will provide an opportunity for students in secondary schools across the country to put in their entries and to win prizes in the form of educational grants to study in any university of their choice on the African continent.

Beginning from last year, the prize money increased significantly as the UBA Foundation emphasises that education remains one of the foundation’s key initiatives.

Group Head, Brand Management, United Bank for Africa(UBA) Plc, Mr. Lashe Osoba; English Teacher, Holy Child College, Ikoyi, Mrs Ezechukwu Ngozi; Managing Director /CEO, UBA Foundation, Mrs Bola Atta; Group Head, Direct Sales Agency, UBA Plc Ogechi Altraide; Group Head, External and Media Relations, UBA Plc, Mr. Ramon Nasir, flanked by students and teachers of some selected secondary schools in Lagos during the commencement Ceremony for the 2019 UBA Foundation National Essay Competition for senior secondary school students in Nigeria held at UBA House on Tuesday

The first prize for the UBA National Essay Competition is a N2 million educational grant, while the second and third prizes are N1.5 million and N1m educational grants respectively.

Speaking to the students and participants at the event, Bola Atta said, “To us at the Foundation, this is our drive to improve the quality of education across the continent. It is also our way of giving back to the society.  The competition is a key aspect of our investment drive in human capital, as we seek to improve knowledge base, allow students to express themselves and write creatively. We will continue to sustain the initiative because education is very important to UBA and we are more than committed to providing the necessary support for students in Nigeria and across the African continent,” she noted.

“We are driven by the mantra to do well and do good and we will not relent in our efforts to touch lives through our various projects, and initiatives,” Bola Atta told the excited students.

Explaining the modalities for the competition, she stated that entries received from students for the competition will be reviewed by a distinguished panel of judges made up of professors from reputable Nigerian Universities, who will then shortlist 12 best essays for further assessment.

Following this, a second round of the competition will involve the 12 finalists who will write a second supervised essay from which three best essays will be selected as the overall winners from the 12 finalists emerged from the first round of the competition.

Atta explained that the choice of essay for this year’s competition is one that helps promote creative and analytical thinking in students and helps them to be problem solvers. This year, the topic is “What do you think the government should do to control fraud in Nigeria?”

It is important to note that apart from Nigeria, the national essay competition has been taken to other African countries including Ghana and Senegal. More  countries including Mozambique and Kenya will kick off the initiative this year. A unique component of this year’s edition is that, schools that turn in the highest number of entries will be recognised and rewarded a special prize by the Foundation.

Also speaking at the call to entries today, the Group Head, Direct Sales Agency, Ogechi Altraide, who spoke on the benefits of reading and writing essays, motivated the students to research into the topics and give it their best shot, adding that there is the need for them to focus on adapting themselves to happenings in their generation, and to have a growth mindset. This she explained, will ensure that they can apply themselves and conquer whatever challenges they are faced with.

According to her, reading and writing go hand in hand, and so it is important for students to keep abreast of how the economy can develop through reading and writing.

An English teacher from Holy Child College, Ikoyi, Mrs Ezechukwu Ngozi, gave the students tips on how to write good essays, and advised them to keep to the proper tenets of essay writing to come out tops in the competition.

As the CSR platform for the UBA Group, UBA Foundation embodies the Group’s CSR objectives and seeks to impact positively on societies through a number of laudable projects and initiatives.

Each year, the bank donates thousands of books to students in Nigeria and across Africa, under the ‘Read Africa’ initiative to encourage and promote the reading culture in secondary schools.

 

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UBA Makes 20 more customers Millionaires, Doles Out N30m in 3rd Draw of UBA Wise Savers Promo

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Pan African financial institution, United Bank for Africa (UBA) Plc, has again rewarded another 20 customers who have emerged winners in the third quarterly draw of the UBA Wise Savers Promo winning N1.5 million each, bringing the total amount won so far by 60 customers to N90 million.

The electronic raffle draw, which was held at the UBA Head Office in Lagos on Wednesday, July 31st, was witnessed by the relevant regulatory bodies including the National Lottery Regulatory Commission, Lagos State Lottery Board and Consumer Protection Council.

Lucky customers who emerged winners in the latest draw cut across all regions of the country. They are Yusuf Muhammed; Adebakin Anuoluwapo Elizabeth; Babatunde Temidayo Ruth; Christian Emetole; Nwabuife Ikeagu; Omoye Amiengheme; Ogechukwukanma Okoh; Akinyemi Abidemi Betty; Okoro Chukwuma and Chukwu, Patricia Nnenna.

Others are Adejoke Olarinoye; Fatoki Hassan; Nwokocha Ikechukwu Emmanuel; Owolanke kole Emmanuel; Ferreira Adesola Afolatomi; Emmanuel Omoigui; Uzoigwe Anthonia; Elesin Titilayo Oluwabunmi; James Suleiman Umar and Lawan David Nahinokan.

The ongoing promo, which commenced in September last year, is expected to run till September 30, 2019 and will see a final 20 customers from across Nigeria become millionaires, winning N30 million in the last quarter of this year.

At the end of the fourth promo, a total of N120 million will have been won by 80 customers.

Speaking during the event, UBA’s Group Head, Consumer & Retail Banking, Mr. Jude Anele, said that since the promo began late last year, the bank has been impressed at the level of response by its customers and the general public across the country, adding that the purpose of the campaign is to reward loyal customers while encouraging the savings culture.

He noted that there has been a remarkable increase in the number of participants in this edition compared to the previous one, adding that the bank’s objective of helping customers’ save for the rainy day is being achieved.

He said: “It is very easy to spend money but to save is a habit all must imbibe. Our key objective is to encourage our customers to save regularly. We are here to support our customers and to encourage them to save as well.”

Anele urged other customers to take advantage of the subsequent opportunities the last quarterly draw will offer.

The Group Head, Transaction and Electronic Banking, Sampson Aneke, who also spoke at the event said,  “There is no better time to give back and delight customers than this challenging economic period where people need all the support they can get to make life more meaningful. With this in mind we decided to prioritise our customers as we always do at UBA by giving them plenty to cheer about and that is the reason why another 20 customers have been made millionaires today.

Aneke noted that the promo is consistent with the bank’s novel initiatives in prioritizing customers, and said it was necessitated by the invaluable belief the Bank has in its customers.

“We will continue to listen and give them nothing short of the best that they deserve. UBA will not relent, because we are impressed with the impact this has made so far and will continue to touch the lives of our loyal customers positively,” he explained.

The criteria for qualifying for the draw is to save at least N30,000 in a UBA savings account or in instalments of N10,000 each for a period of three months. Those yet to be UBA customers can open a savings account on any of the numerous bank channels, including Magic Banking (*919*20#) and LEO, or in any of the UBA branches across the country, and start saving to stand a chance of winning.

United Bank for Africa Plc is a leading pan-African financial services group, operating in 20 African countries, as well as the United Kingdom, the United States of America and with presence in France.

UBA was incorporated in Nigeria as a limited liability company after taking over the assets of the British and French Bank Limited who had been operating in Nigeria since 1949. The United Bank for Africa merged with Standard Trust Bank in 2005 and from a single country operation founded in 1949 in Nigeria – Africa’s largest economy – UBA has become one of the leading providers of banking and other financial services on the African continent. The Bank which was awarded the Best Digital Bank in Africa by the Euromoney awards in 2018, provides services to over 17 million customers globally, through one of the most diverse service channels in sub-Saharan Africa, with over 1,000 branches and customer touch points and robust online and mobile banking platforms.

The shares of UBA are publicly traded on the Nigerian Stock Exchange and the Bank has a well-diversified shareholder base, which includes foreign and local institutional investors, as well as individual shareholders.

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FBNHOLDINGS RECORDS N294.2BN GROSS EARNINGS FOR H1’19, REPORTS IMPROVED NPL AT 14.5% DOWN FROM 25.9%

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By Babajide Komolafe (VANGUARD)

 

FBN Holdings Plc, the parent company of First Bank of Nigeria Limited, yesterday, said it recorded gross earnings of N294.2 billion for the six months ending June 30, 2019 (H1’19).

 

This represents 0.3 percent growth when compared with the N293.3 billion recorded as gross earnings in the corresponding period of 2018 (H1’18). The company disclosed this in a statement announcing its financial results for the six months period ending June 2019. The results also showed that the company recorded profit before tax of N39.9 billion in H1’19, up by 2.6 percent from N38.9 billion in H1’18. Profit after tax however dropped by 5.4 percent to N31.7 billion in H1’19 from N33.5 billion in H1’18.

 

Commenting on the results, Group Managing Director, FBNHoldings, UK Eke said: “Despite the difficult operating environment, we remain resolute in delivering on our guidance across key metrics, including our commitment towards a single digit Non-Performing Loans (NPL) ratio by the end of year, as evidenced by the reduction in NPLs from the last quarter.

 

“Essentially, Atlantic Energy, our largest NPL, was written off, translating into a decline in the NPL ratio from 25.9 percent in December 2018 to 14.5 percent as at June 2019, a step that brings us closer to our full year 2019 target and create more headroom for quality asset growth.

ARNINGS FOR H1’19, REPORTS IMPROVED NPL AT 14.5% DOWN FROM 25.9%

By Babajide Komolafe (VANGUARD)

 

FBN Holdings Plc, the parent company of First Bank of Nigeria Limited, yesterday, said it recorded gross earnings of N294.2 billion for the six months ending June 30, 2019 (H1’19).

 

This represents 0.3 percent growth when compared with the N293.3 billion recorded as gross earnings in the corresponding period of 2018 (H1’18). The company disclosed this in a statement announcing its financial results for the six months period ending June 2019. The results also showed that the company recorded profit before tax of N39.9 billion in H1’19, up by 2.6 percent from N38.9 billion in H1’18. Profit after tax however dropped by 5.4 percent to N31.7 billion in H1’19 from N33.5 billion in H1’18.

 

Commenting on the results, Group Managing Director, FBNHoldings, UK Eke said: “Despite the difficult operating environment, we remain resolute in delivering on our guidance across key metrics, including our commitment towards a single digit Non-Performing Loans (NPL) ratio by the end of year, as evidenced by the reduction in NPLs from the last quarter.

 

“Essentially, Atlantic Energy, our largest NPL, was written off, translating into a decline in the NPL ratio from 25.9 percent in December 2018 to 14.5 percent as at June 2019, a step that brings us closer to our full year 2019 target and create more headroom for quality asset growth.

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