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
SHAREHOLDERS COMMEND FBNHOLDINGS FOR A SUCCESFUL AGM AS MANAGEMENT ASSURRES OF A BRIGHTER FUTURE
The shareholders of FBN Holdings Plc have been assured of brighter future and enhanced dividend at the 7th Annual General Meeting (AGM) in Lagos.
Speaking at the meeting in Lagos, Dr Oba Otudeko, FBN Holdings Group Chairman, assured the shareholders that the company had mapped out strategies aimed at ensuring enhanced value creation for the future.
Otudeko said that the board and management would work together to create shareholder value and build strong foundation for the future.
“We are not resting on our laurels, and our renewed approach to synergy and innovation will be major drivers to unlocking earnings potential for our group.
“We believe that our efforts to integrate our offerings and provide end-to-end solutions for our customers will create a competitive advantage in our markets,” he said.
Also speaking, Mr Urum Kalu Eke, Group Managing Director FBN Holdings, said that the company was committed to greater exploits in the future in its drive to deliver value to its shareholders.
” I would like to reiterate our promise to you and the entire market that 2019 represents for us the year of inflection.
“All leading indicators, derived from our numbers, point to the commencement of growth across businesses, markets and indices.
“As we transition to a new strategic planning cycle post-2019, we are confident that the focused execution of our strategy, investment in future-enabling technologies, development of our talents and our re-engineered processes to repositioning the group for ultimate benefit of the shareholders,” Eke said.
He also commended the shareholders for their unwavering support to the group over the years.
The company for the period under review posted a profit after tax of N59.7 billion compared with N45. 5 billiin achieved in the comparative period of 2017, an increase of 31.4 per cent.
Profit before tax stood at N65. 3 billion against N54.5 billion recorded in 2017, representing a growth of 19.7 per cent.
Gross earnings stood at N583.5 billion compared with N595. 4 billion in 2017, a decrease of two per cent.
Its total assets rose by 6.3 per cent from N5.2 trillion in 2017 to N5.6 trillion during the review period.
Similarly, customers deposits expanded by 10.9 per cent from N3.1 trillion in 2017 to N3.5 trillion in 2018.
The year also recorded reduction in impairment charges which declined to N87. 3 billion from N150.4 billion, representing 42 per cent drop and a proof to the improving loan book of the commercial bank.
He assured the shareholders that the board and management had restructured the entire group for more sustainable growth.
“For liquidity perspective, you have a strong institution that would pay dividend on a regular basis.
“We have built capital buffet at the commercial bank and the other entities are well capitalised also.
“2019 promises to be a much better year than 2018; all operating entities are in safe hands with good management teams.
“NPL ratio should be at single digit by end of 2019, we will pursue recovery and when it happens the commercial bank will contribute to dividend payment,” he stated.
Eke noted that significant growth in the bottom line was due to several factors including the improved risk management processes which endured that impairment changes dropped year-on-year.
He , also, attributed the growth to implementation of servers cost containment initiatives during the period.
Also speaking, Dr Adesola Adeduntan, First Bank of Nigeria Limited, Chief Executive Officer, said that recovery efforts on all accounts provisioned were in progress.
Adeduntan said that the bank would ensure that no kobo would be left in the hands of third party, noting that, they bank would work harder to resolve all the legacy NPL.
He said that the number of banking agents had increased to 20,000, adding that the figure processed through agency banking platform reached N1 trillion as at last week.
The shareholders at the meeting approved a total dividend of N9.3 billion, which translated to 26k per share.
More Winners Set to Emerge in UBA Wise Savers Promo: N90m still up for grabs
Pan-African financial institution, United Bank for Africa (UBA) Plc has again announced that another set of 20 loyal customers will get a chance to win N1,500,000 each, in the second edition of its quarterly drawfor the ongoing UBA Wise Savers Promo, which would hold in April at the bank’s Corporate head office.
This development more than anything is an opportunity for potential and intending customers to take their chance and add to the growing number of millionaires who have benefitted from the ongoing Wise Savers Promo as a whopping N90Million is still up for grabs.
To qualify for the draws, new and existing customers of the bank are expected to save at least N10,000 each month for three consecutive months, or N30,000 for 90 days in the promo, which will run for the rest of the year. Apart from the N30 million, won by 20 customers last month, January to be precise another N90 million is still expected to be won by 60 more loyal customers in the remaining three quarters of the year.
Already the following winners, who cut across all regions of the country; Nnadumije, Ebube Dawn; Onwochei Christiana Okwukwe; Eze Mathias Nnaji; Christian N Orie; Uka, Okwudiri; Okata Stephen Uche; Okafor Onyinye Esther; Nwanekezi Chimezie Jude; Ayomide V Yahaya and Olanegan, Oyetunde Keji, have already claimed their cash prize and are currently spreading the news so others can take advantage of the once in a life time opportunity.
Others winners doing same are Emmanuel Onu Chidozie; Mohammed Fatima; Aminu, Mustapha; James Nanre; Pahinti Albert; Emmanuel O Adeniji; Jaki Movihinze Mercy; Saminu Muritala Mohammed; Ezeh Raphael Uballa; Uchenna Iheji.
The Group Executive, Digital and Consumer Banking, Mr. Anant Rao, while speaking on the forthcoming Raffle draw, noted that a lot of lives have been positively impacted, following the previous draw where 20 people went home with N1,500,000 each totaling, N90 million.
According to Rao: “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 them as we always like to do at UBA by giving them plenty to cheer about and that is the reason for the ‘Wise Savers Promo”.
“I have been privileged to visit some of the customers who won in January, and was more than fulfilled to see happiness and gratitude on the faces of the fortunate 20 when their cash prizes were presented to them. That feeling is indescribable, to this end we are more than motivated to do more so our customers can better achieve their dreams and goals in life, I am happy this cash prize can go a long way, to this end, enjoin many more customers to participate in the promo, you never can tell, it could be you”
Head Retail Liabilities, Tomiwa Sotiloye, also explained that the promo was consistent with the bank’s novel initiatives in prioritizing customers and this was necessitated because our customers are invaluable to all that we do.
“He continued, we would 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 would continue to touch the lives of our loyal customers positively”. Sotiloye noted
More millionaires to emerge in UBA Wise Savers Promo
As part of UBA’s commitment to support the savings culture in Africa, the bank is rewarding its loyal customers for saving towards their goals.
So far, twenty customers have been rewarded with N1.5 million each has since the promo began in September 2018.
At the second draw happening in April, 20 lucky savers will also win N1.5 million each. The draws take place every quarter and there is still a chance for 60 lucky people to win.
The wise savers promo is open to both new and existing customers of the bank who make a N10,000 monthly deposit into their savings accounts for 3 consecutive months before each draw date. Alternatively, they can make a one-time deposit of at least N30,000 to be saved for 90 days before each draw date. The promo will run all through 2019 and a total of 80 people will become millionaires.
Speaking at the official launch of the promo, the Head, Retail Liabilities, Tomiwa Sotiloye explained that the promo is part of the bank’s promise to put customers first and reward their saving efforts. “We continue to encourage people to have a saving culture to help meet their needs and better prepare them for a rainy day”
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