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Leadership And Firstbank’s successful transitioning to ‘Click’ Banking

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FirstBank’s logo

In December 2015, the share price of First Bank of Nigeria Limited was trading around N4.8 band. About seven years later, precisely last December, the value held tightly to N15, growing by over threefold amid general asset and economic doldrums.


The steep rise in the valuation of the financial institution deviates remarkably from the average performance of FUGAZ, an acronym describing the top five Nigerian banks by market capitalisation. In the past seven years, the share prices of the leading banks appreciated by an average of 90 per cent as against over 200 per cent growth seen in FirstBank.
Deflated by the bank’s exceptional performance, Access Holdings, GTCO, UBA and Zenith stocks posted about 60 per cent growth. The performance of the entire banking sector also flattens out when compared with FirstBank, which raises questions about the fundamentals of the bank and its growth trajectory.


In terms of inflation-adjusted return on investment, FirstBank shareholders are among the investors that emerged from the turbulent years with a positive real rate of return. Was it a stroke of luck? Does the market reward poor performance?
Of course, stocks sometimes thrive on mere greater fool theory, thus triggering an asset bubble. But the positive share movement of the premier bank is but only one of the many high growth indicators.
In first quarter of 2023, the bank’s non-performing loan (NPL) ratio came down far below the five per cent regulatory threshold, which means so much difference when placed in a historical context. As at December 2015, its NPL ratio was over 45 per cent, a telling reflection of the level of effort that went into cleaning its books in the intervening years. For analysts, the cleanup, which was done without raising fresh capital, explains what disciplined, focused and forthright leadership could achieve.
On cleanup process, the Bank CEO, Dr. Adesola Kazeem Adeduntan, said the institution was “its self-created AMCON”, referring to the Asset Management Corporation of Nigeria set up in the aftermath of the 2008 financial crisis to buy up the threatening toxic assets of Nigerian banks.


Indeed, what the management of the bank has done in the past seven years is not remarkably different from the role of AMCON, since its creation in 2011, except that the former raised fresh capital for its humongous responsibility whereas the bank did not. Also, the FirstBank experience was internal; and it did face a tougher task in terms of the proportion of its assets that had gone bad.
At the height of the financial crisis in 2008/2009, the NPL ratio rose to 37.3 per cent, from 9.9 per cent on record in 2007. On the other hand, the premier bank was carrying over 45 per cent NPL on its book as at January when Adeduntan took the reins of its leadership as the managing director.


All through the process, the bank did not raise fresh capital for the housecleaning programme, meaning the shareholders’ value was not diluted in the process.
Investors may have also kept in view other impressive qualitative metrics such as pre-tax return on equity (RoE), a measure of net income in proportion to shareholders’ equity, which moved from 0.6 to 17.3 per cent at the end of last year’s financial cycle. Also, pre-tax Return on Asset (RoA) climbed from 0.1 to 1.6 per cent while the cost of risk was also down to 1.7 per cent last year, from 10 per cent recorded in its 2015 financial.
At the end of this month, Adeduntan would have spent 7.5 years in office and he would be 30 months short of the tenure limit requirement. Already, he is the longest-serving chief executive of the institution, which is known for its short-term leadership tradition. Casual observers consider him as fortunate, but deep analysts think differently – the bank has been fortunate to have had him.
The lender, which predated ‘Nigeria’, and played the most active financial role in the structuring of the country’s pre- and post-Independence economy, may have just got its groove back under the current management. The books are clean and the NPL is trending downward, faster than the industry average. But beyond, its top and bottom lines are all out of the woods and climbing.
Its total assets, for instance, have increased by 167 per cent in the past seven years, meaning that its asset size has almost tripled, which also outperformed the industry growth. In terms of liquid asset to total asset ratio, it is also ahead of most of its peers. This suggests that while the quality of its assets has increased remarkably, with the NPL ratio falling by 88 per cent in less than a decade, the bank’s asset growth has not stalled, which speaks volumes about the quality of its risk management approach.

Currently, FirstBank had in its portfolio of about 41 million customer accounts, an extraordinary 276 per cent lift from its 2015 record. The figure is about 30 per cent of total bank accounts held by Nigerian banks. Customer depositors also jumped by as much as 153 per cent to 10.6 trillion.
The growth seen is also robbing off on the bottom line with the profit before tax (PAT) increasing by N137 billion in the period. That translates to over 1300 per cent, probably contributing majorly to the sudden spike in the share of the bank.
Perhaps, owing to its long history dating back to when banks were mostly associated with corporate and public sector financial infrastructure, FirstBank was mostly seen as a go-to for savers and borrowers. But that seems to have changed with its many smart digital channels. For its management, that is deliberate.


“Our goal is to transform the bank from lending-based to a transaction-based financial institution,” the chief executive pointed out.
Yes, its transformation is no longer a dream. From zero share of corporate e-bill payments, it has shoved its competitors behind to take hold of 42 per cent of the market. The bank, in the words of its managing director, has pivoted from brick and mortar to “brick and click”, making payment seamless and a click away for individuals, corporate as well as public entities.


“We have built a very formidable trade and cash management platform that we call FirstDirect, which allows corporate banking customers, from the comfort of their home, to initiate a trade transaction and complete it. You have a single view, giving you an interface where you can add your different accounts and transact,” Adeduntan explained.
FirstMobile, a standalone digital bank, has also emerged as a household name in the financial technology ecosystem. In 2015, when the platform was still at its teething age, its users were about 60,000 a number that soared to over six million (a growth of over 10,000 per cent). That has contributed immensely to the changing tradition of banking with FirstBank, as about 85 per cent of its transactions are now initiated via digital windows.
FirstMobile appears to have hit the bull’s eye in the bank’s reinvention drive and effort to appeal to younger demographics. But the platform itself is merely one of the potpourris of telecommunication-driven initiatives it has taken on to get the young depositors on board. FirstOnline users have also grown from about 90,000 to over one million within the timeframe just as its USSD, which targets feature phone users, is even more successful with users increasing by close to 3,000 per cent in seven years to 14.7 million.
Overall, its digital banking has evolved in both volume and public impression. Ease, convenience and reliability have moved the customer base from its tiny 0.6 million to 22 million.

Indeed, FirstBank is transmuting into a transaction-led institution. Last year, the volume of transactions hit 17 million, 8.5 times what it was in 2015 when it experienced some corporate turbulence. But the growth is not only in volume terms, as its non-interest income ratio hit 40.6 per cent for the first time last year, which aligns with the strategic direction of the current management in weaning the group from excessive credit risk exposure.

Over the years, most Nigerian banks have consolidated their global outlook. FirstBank has led the pack with its 40-year United Kingdom subsidiary, which is bigger than some of its competitor wholesale operations back home. But some of the pro-offshore Nigerian banks had been accused of extroversion and ego-seeking as most of the outposts were nothing but cost centres.
In the past few years, the assumption has been deflated; and the performance of the African subsidiaries of FirstBank is among what could be changing the tide. Before the 2015 change of the guard, the subsidiaries’ operations left had created a gaping hole in the PBT of the consolidated account. Last year, they contributed a combined 21.3 per cent to the group’s pre-tax profit.
But that was not because there was no risk out there. In the heat of the Ghanaian government debt crisis, Adeduntan revealed, FirstBank took the least impairment among Nigerian banks that were exposed to the crisis “not because we saw it coming but because we have consistently done the right thing and adopted best risk management practice”.

There is also a humane side to his management approach. Today, FirstBank is among the highest-paying Nigerian banks and offers the most attractive conditions of service, including training, accelerated career growth and many more. In 2021, its efforts were compensated with the Great Place to Work Award. Today, the once-touted conservative bank is attracting young and upwardly mobile professionals with the average age of its employees estimated at 39 years.
Being the longest-serving managing director of the pre-colonial financial behemoth, Adeduntan has the leverage of time and experience to enforce its transformational agenda. But he had also prepared for the job. At KPMG where he co-pioneered the firms’ financial risk management advisory services, he trained in almost all areas of human endeavors – presentation, people management, business writing and all sorts. On assumption of office, he was bold and firm in his decision to headhunt, institute new work culture, clear career growth blockages and challenged the status quo.
His courageous outing in the past seven and half years has transformed an institution once considered one of least prepared for the age of “brick and click” banking into the Usain Bolt of the emerging financial technology space.


Culled from Guardian Newspaper

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Olam Agri Reaffirms Commitment to Food Security, Meets Minister of Finance

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The leadership of Olam Agri in Nigeria (left) comprising Ade Adefeko, the Director Corporate & Regulatory Affairs, Olam Agri in Nigeria, and Anil Nair, the Managing Director, Olam Agri in Nigeria, during the meeting with Wale Edun, the Minister of Finance & Coordinating Minister of the Economy (middle).

Lagos, Nigeria, April 16, 2024 Olam Agri in Nigeria, an agribusiness in food, feed and fibre has reaffirmed its commitment to helping Nigeria achieve food security. The company made the pledge during a recent meeting with the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun. The meeting which is part of the agribusiness strategic engagements with critical stakeholders had in attendance the Managing Director of Olam Agri in Nigeria, Anil Nair, the Chairman of Federal Inland Revenue Service, Zacchaeus Adedeji, the Accountant General of the Federation Oluwatoyin Sakirat Madein, and the Director Corporate & Regulatory Affairs Olam Agri, Ade Adefeko. The latest engagement came on the heels of a courtesy visit to the Vice President of the Federation, Sen. Kashim Shettima (GCON), and a tour of the agribusiness rice farm and mill by the Honourable Minister of Agriculture and Food Security, Sen. Abubakar Kyari. Speaking during the meeting, the Minister of Finance and Coordinating Minister of the Economy, implored Olam Agri to leverage its impressive scale with presence in the Rice, Sesame, Animal and Fish Feed, Wheat Milling value chains as well as biscuits confectionery and culinary product manufacturing. He spoke on government reforms to curb inflation, particularly food inflation, and called on the agribusiness to continue deploying its scale, global expertise, and deep resources to engender wider access to quality food and nutrition to the teeming population in a bid to achieve food security.

In response, the Managing Director of Olam Agri in Nigeria, Anil Nair, said, “Our commitment to driving food security is evidenced by the sprawling investments we keep making to raise productivity in the rice, animal feed and protein, wheat and flour milling, sesame, and edible oils value chains. We consistently scale this investment as well, as we expand involvement in various out-grower programmes, research & development, partnerships, collaborations, and the integration of smallholder farmers into various empowerment initiatives for the betterment of Nigeria.” “We do realise that deepening partnership and collaboration with other stakeholders in the economy is crucial to maintaining and sustaining the government’s food security agenda. We are fully aligned with the ongoing fiscal reforms of government and only seek support for an enabling policy framework, and regulatory environment that will not only enable us play our part but stimulate the development of the agricultural value chain,” he added.

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Doing Business in Nigeria: Interswitch Founder reiterates need for focus on business’ unit economics

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As Nigeria, arguably one of the principal economic powerhouses of Africa, continues to attract global attention against the odds as a destination which cannot be ignored for investment and business opportunities, the 2024 edition of the ‘Doing Business in Nigeria Conference’ which held on Saturday 13th April in Lagos, the nation’s commercial capital served as a pivotal event for entrepreneurs, investors, and business leaders seeking to tap into the country’s vibrant business landscape. Delivering a keynote on the theme ‘Doing Business in Nigeria: The Opportunities, Challenges and Realities’, Interswitch Group Founder and Chief Executive Officer, Mitchell Elegbe set the tone for deliberations at the conference, sharing robust insights and perspectives hinged on over 22 years operating in Nigeria, from where the company has expanded into other African markets, being in the driver’s seat of one of Africa’s most influential digital technology businesses. Among other incisive pointers, Elegbe walked participants through the dynamic trajectory of Interswitch’s business operations, starting from 2002 when key infrastructural elements such as power and telecoms were at a nascent stage. The Interswitch Founder acknowledged that Nigeria is probably not one of the easiest markets in the world to do business, however stressing that compelling business opportunities exist only where there are challenges, pointing out that regardless of the challenges and constraints in the local operating environment, some particular industries and sectors have consistently bucked the trend and shown great promise. In his view the performance of these outliers is attributable to factors such as the ability to adapt and innovate within the local market hinged on pragmatism and nimbleness, understanding of consumer behaviour and agile responses to changing business landscapes. According to Elegbe, who set things in context through the lens of fintech businesses, there are significant differences between the typical Silicon Valley business model and what is necessary for sustainable success in a market like Nigeria, particularly in the current global investment climes. In his words, operating in the Tropical Savannah that Nigeria is, as he described it, warrants the business to ensure products/services are designed to meet people at their points of need, whilst essentially ensuring proof of concept, focus on unit economics and scaling to achieve volumes in spite of thin margins, with a view to driving profitability as an early priority. He emphasized that Unit economics are instrumental in evaluating the economic sustainability and profitability of the business model, providing insights into whether the business is generating sufficient value to justify the associated costs. Other keynotes were delivered by Wole Adeniyi, The Chief Executive Officer, Stanbic IBTC Bank, who was represented by Olu Delano, Executive Director for Personal and Private Banking as well as Binta Max-Gbinije, Chief Executive, BMG Seven Limited, each bringing unique perspectives and expertise to the discussions. The conference agenda was thoughtfully curated to address key themes and topics relevant to doing business in Nigeria, with sessions covering market entry strategies, regulatory compliance, risk management, investment incentives, innovation, and sustainability, among other salient themes. Beyond the informative sessions and workshops, the Doing Business in Nigeria Conference 2024 provided platforms for networking and collaboration, including a business pitch session targeted at emerging entrepreneurs.

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Interswitch Kicks Off InterswitchSPAK Nigeria 6.0: Calls for Registration, Doubles Value of Winnings

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Interswitch, Africa’s leading digital payment and commerce company, has announced the commencement of the sixth edition of its annual National Science Competition, InterswitchSPAK, in Nigeria with a significant boost in prize monies and added incentives for more participants, as the company doubles-down on its long-term support for STEM advancement across Africa. The competition, a Corporate Social Responsibility (CSR) initiative of the Interswitch Group, now in its 6th edition in Nigeria (and 5th edition in Kenya, where it also runs) aims to foster interest in Science, Technology, Engineering, and Mathematics (STEM) subjects among senior secondary school students across the country. Schools in Nigeria can now register up to twenty (20) SS2 Science Students each, marking an unprecedented scale of participation. Registration for students will be open until May 10th, 2024, and it is free of charge to all applicants. The qualifying examination is conducted entirely online, allowing candidates to take it from the comfort of their school, home, or any convenient location. The Computer Based Test (CBT) exams are scheduled to hold from Tuesday, May 14th, to Saturday, May 18th, 2024, from 8 am to 6 pm daily. Participants have the flexibility to choose the most suitable day, time, and venue for their exam, with two trials available. Following the online qualifying examination, the top 81 students will proceed to the semi-finals and finals to compete for the coveted title of Nigeria’s Best STEM Student. This year’s edition, with a prize pool of over 30 million Naira, marks a 140% increase from the erstwhile 12.5 million Naira in prize winnings, demonstrating Interswitch’s unflinching commitment to educational development by doubling cash prizes for winners. The first prize winner will receive N15 million tertiary scholarship spread over 5 years, a laptop, and monthly stipends. The second-place winner gets N10 million spread over 3 years and a laptop, while the third-place winner will get N5 million for 1 year. In addition to the top three prizes, cash rewards are also available for the participants who secure the 4th to 9th positions. Furthermore, the top 18 semi-finalists will also receive cash prizes. The competition also recognizes the contributions of teachers and offers cash rewards for the top 27 contributing teachers. Interswitch will also purchase JAMB e-PINS for the top 200 preliminary qualifiers to enable them register for the Joint Admissions and Matriculation Board (JAMB) examinations free of charge. Speaking on this year’s edition of the competition, Cherry Eromosele, Executive Vice President & Group Chief Marketing and Communications Officer at Interswitch Group said “We are excited to kick off another edition of InterswitchSPAK, the 6th in the series in Nigeria, and this year promises to be bigger and better than ever before. By doubling the prize pool and expanding opportunities, we are not only investing in the winners but also in the entire ecosystem of STEM education. We are thrilled to see the impact this initiative has had over the last 5 editions and look forward to witnessing the brilliance and innovation of Nigeria’s young minds in this year’s competition”. The last edition saw Abraham Daramola, a student of Hallmark Secondary School, Ondo State, emerge as the winner, while the duo of Emmanuel Omoegbeleghan from The Crescent International School, Ogun State, and Emmanuel Angelo-Hyuwa from The Ambassadors College, Ogun State, came second and third, respectively. Secondary schools are hereby advised to visit the InterswitchSPAK portal to register their best science students in Senior Secondary 2 (SS2) for the competition. All eligible students and schools are encouraged to visit the website, www.interswitchspak.com, for more details on how to participate in the competition.

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