Business

Fidelity bank will be among top 5 banks in few years time – CEO, Nnamdi Okonkwo

Published

6 years ago

June 6, 2018

From just a merchant bank with few branches, Fidelity Bank Plc has, over the years, maintained a steady growth, emerging the top tier 2 bank in Nigeria. In this interview with the lender’s CEO, Mr. Nnamdi Okonkwo, he speaks on the economy, the banking industry and the secret behind the stellar performance of the bank during its financial year ended December 31, 2017 at an interactive session with business editors in Lagos. Excerpts:

What is the bank’s roadmap for the next five years?
Let me give you some historical background. If you look at where Fidelity Bank was as at end of 2013 and where we are today, you would have noticed some marked improvements. The bank has had a stable leadership in our 30 years of operations. I am the third CEO of the bank.
The first CEO served for 15 years and the second was there for 10 years. Both of them laid solid foundations for the bank before I took on the mantle of leadership.
From day one, the watchword is to keep the bank safe and that was the same gospel that was transferred to me to ensure that the bank’s capital adequacy and liquidity are strong.
At some point, people thought Fidelity Bank was too conservative, but it was for good reason. It has enabled us to survive three or four cycles of crisis in the banking industry with us acquiring two banks in the process.
When I came on board, it was clear to me that we needed to be mindful of these and management also agreed to retain this posture when we had our retreat to strategies for the next growth phase.
We said to ourselves at the retreat that we want to be the clear leader among tier-two banks. So, we crafted the medium-term strategic initiatives built around balance sheet optimisation, cost reduction, and increased digitisation. We were sure that if we remained focused on the implementation of these initiatives, we would achieve success.
Four years down the line, we like the results we have achieved, even though we also realise that we are not yet where we intend to be ultimately. Specifically, in answer to your question, in the next five years we plan to break into the league of top five-six banks in the country.
This has implications for market share, number of customers, balance sheet size and all. We had a board retreat late last year to strategise and agree on the imperatives for achieving this goal and by God’s grace and the disciplined approach to the execution of the outlined initiatives, we will realise this goal.
Whilst I am not at liberty to completely divulge in details our plans for the next five years, let me speak to some of the quiet changes and internal realignments that we have made in preparation for the future.
Starting with governance, we ensured that as directors retired, both at the executive and non-executive board, we maintained quality by replacing them with equally very strong professionals from diverse backgrounds.
If you take a look at our board, you will see high profile representation by people who have been in regulatory roles, from our Chairman, Mr. Ebi, a former Deputy Governor of the Central Bank of Nigeria (CBN), to a former CEO of a multi-national corporation, former CEO of a bank, legal practitioners, former Chief Risk Officer of a bank, accountants and accomplished businessmen.
On the executive side, the professional background of our directors also speaks for themselves. We also started our mid-year audit last year. Nobody compelled us to do it. We are required to audit our account once every year, but we did it on our own because of our future aspiration. We decided to adopt international best practices.

Are you looking at organic growth, merger, capital raising or a combination of strategies?
We plan to grow organically, but that does not mean if we see a brownfield transaction, we will not do it. Getting to the top five-six league of bank is more important than just doing a combination today to become such, which means you did not get there by deliberate efforts.
But if we see an opportunity in the market that aligns with our goals, we will evaluate it but that’s not our primary plan. On capital raising, as a bank, we have a policy set out by the Board, which ensures that we remain above regulatory benchmarks.

We used to know Fidelity Bank as a bank that handles big transactions. Why have we not heard about such in recent times?
Apart from our reputation as SME-friendly bank, Fidelity has core competence in corporate banking; Fidelity is still financing the big corporates. On agriculture, we funded one of the biggest rice mills in Nigeria located in Kano, supported cocoa value chain in Ondo State, to name a few. We are also very active in food and beverage industries, construction,oil and gas, fast moving consumer goods (FMCGs), iron and steel, among others.

What will be key drivers of Nigerian banks going forward?
It will depend on strategic focus of each bank. At some point it was easy to make 20 per cent returns from treasury bills, we knew that was not sustainable, so expectedly, it has come down.
Those who stay focused in their core business at a time like this will remain profitable. For instance, if you look at our income distribution in 2017, you will see that we made about 25 per cent of our revenue from non-interest income, which was as a result of investment in digital technology. We used digitization to drive a lot of non-funded income.
We also took advantage of our balance sheet optimization to increase yield in short-term instruments. We have also cautiously resumed extending credits to customers in the consumer/retail segments, following improvements in salary payments.

You are known to be strong in the SME sector that has not been de-risked in the Nigerian banking environment and coupled with the issue lenders are having with Non-Performing Loans (NPL), are you still going to be bold lending to them while driving your NPL down to five per cent?
The NPLs you see in the banking industry are not even predominantly from SMEs. Fidelity approaches SMEs from a different strategy completely. When we started supporting SMEs, we did not want to use risk asset penetration strategy.
Businesses fail either because owners borrow for the wrong reasons or they don’t know proper book keeping and there is nothing tying them together and preventing them from behaving otherwise.
When a significant percentage of businesses go bad, there will be a spike in bad loans. Because of this, about eight years ago, Fidelity set up a division to understand SMEs and train people in that area.
A General Manager headed the division. We divided SMEs into general SMES and managed SMEs. We use the cluster approach to manage people that have similar needs.
You can have 500 people who have similar needs and talk to them as an association. Those that do not have proper book keeping, you make it clear to them that we need to see your business through your record keeping and we train them to imbibe and inculcate these habits. Recently, our people spent two weeks in Aba, in the shoe and leather segment of the market.
Today we have a thriving branch there, with the Bank of Industry (BOI) approaching us for collaboration. What they want from us is to use our office to provide money to support people in that market because our model is working. Now if any member of the cluster defaults, the other members will come against him or her in mutually re-enforcing manner.
Our products are specifically designed and if everybody in a particular cluster is facing bad time, we will know, but in a situation where only one person is not repaying, we know that person is doing something wrong. So that’s the way we approach the cluster SMEs. For the stand alone SMEs, we have developed templates.
For instance, if we check transactions across industry over a period of time, we can tell what kind of SME a business is, using account statements. That way we can query inflows and outflows and ask questions where there are gaps – we ask why you are not selling or are you deliberately stocking up, where we see stocks growing are higher than demand. Yes we are that detailed. the awards we keep winning on SME banking is an outcome of a deliberate strategy.
-Culled from New Telegraph

Business

Oil marketers counter Dangote

Published

1 hour ago

November 5, 2024

Sahara Weekly

Oil marketers counter Dangote over allegation of substandard product importation

The Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN) has countered the claim by Dangote Refinery that any oil importers landing petrol at a price cheaper than what the refinery is selling are importing substandard products and conniving with international traders to dump low quality products into Nigeria.

The refinery had made the claim on Sunday.

In a statement yesterday, DAPPMAN’s Executive Secretary, Olufemi Adewole, said none of its members was engaging in activities that could shortchange Nigerian fuel users by conniving with anyone to bring in low quality product into the country.

“We’ve said this for the umpteenth time, and it bears repeating, those in the downstream sector business of petroleum products trade are patriotic Nigerians who will not shortchange Nigerian citizens for filthy lucre. Our members are in this business to add value to the businesses of their fellow Nigerians and not to defraud them.

“Prices of products in the international market are dynamic as they’re dictated by prevailing circumstances at every given situation. We calculate our landing costs based on the dynamics of market forces, and the templates are always in the public domain. To claim that if the landing cost of imported product happens to be lower than that of the refinery indicates importation of low quality product is not only preposterous, but also fallacious. In any case, the management of the refinery has, until now, kept its cost and prices close to its chest and put it away from public scrutiny. “

“This type of submission, targeted at projecting our members negatively before the public, cannot help the management’s desire to have oil marketers patronise its products. What will ensure such patronage is transparency, fair play, and readiness to compete with others, including foreign refineries, on an even keel and on a level playing field.”

Adewole said the disclosure by the refinery’s management that the facility has a huge stock of 500 million litres fuel reserve came to its members as news.

“We were surprised because we believe that if the refinery has such huge stock, it’s the marketers that should be put in the know first.

‘Secondly, it was even more surprising given that the news came about the time the refinery was working on rationing what each marketer could pick from the refinery. If they had such huge stock, how is it then that they’re rationing what marketers could buy?

“On all these developments in the industry, the position of our members is very clear: we’ve always played by the rules, and we’ll continue to play by the rules. We’ll not be tired of advocating for a level playing field and a highly competitive and transparent sector that’s devoid of arm twisting and devoid of any form of dominant tendencies,” he said.

Similarly, the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) said it had concluded plans to import the best quality petroleum product and sell at far cheaper prices.

The association said it was awaiting the NMDPRA to grant it import licence, saying it “has successfully incorporated a strategic business unit called PETROL.”

Its spokesman, Joseph Obele, said PETROAN had concluded plans with her foreign refinery counterparts and financial partners to import the best quality of PMS and “then sell far less than the present selling rate of PMS in Nigeria.”

He said the allegations that PETROAN would import inferior products and that an international company was trying to establish a PMS blending plant in Lagos “are all strategies for Dangote Refinery to push others out of the market…”

Also, Pinnacle Oil and Gas Limited, in a statement by its Chief Executive Officer, Bob Dickerman, denied blending substandard petroleum products.

Business

Why Protesters demanded Kyari’s resignation

Published

2 hours ago

November 5, 2024

Sahara Weekly

Why Protesters demanded Kyari’s resignation

Scores of youths stormed the headquarters of the Nigerian National Petroleum Company Limited on Monday, demanding the immediate resignation of the Group Chief Executive Officer of the company, Mele Kyari.

The protesters, led by some Civil Society Organisations, described Kyari’s leadership as incompetent, citing skyrocketing fuel prices, endless fuel queues, and economic hardship in Nigeria.

The protesters carrying placards with different inscriptions such as “we demand the immediate resignation of Kyari”, among others, said the leadership of the NNPCL boss has failed.

The aggrieved youths led by Abdullahi Bilal of the (Two Million Man March Against Oil Scam Cabal) and Barrister Napoleon Otache and Olayemi Isaac from Citizens and Economic Freedom Rights Activists in Nigeria demanded immediate action to address what they described as failed leadership in managing the country’s oil sector.

Central to the protests were grievances over skyrocketing fuel prices and the never-ending queues, which they argued have driven inflation and plunged millions of Nigerians into poverty.

They also decried the importation of adulterated fuel, which they said is a corrupt practice that harms citizens by damaging vehicles and businesses.

They demanded an immediate halt to these imports and accountability for those responsible, questioning how substandard fuel continues to enter the country despite quality control assurances.

Additionally, the group criticized the unfulfilled promise of the Dangote refinery to resolve Nigeria’s fuel crisis, expressing frustration over the billions of dollars spent on refinery development and refurbishing existing facilities.

They argued that despite these investments, fuel shortages persist, leaving Nigeria reliant on costly imports even as an oil-producing nation.

They urged President Bola Tinubu to intervene by overhauling leadership in the oil sector, enforcing greater accountability, and putting citizens’ needs first. The protesters vowed to continue mobilizing until their demands for reform and transparency are met.

Speaking to journalists during the mass demonstration, Abdullahi Bilal said, “The Two Million Man March stands as a united voice for every citizen who has been betrayed by a system that continues to enrich a few at the expense of many.

“Today, we call for the immediate resignation of the current leadership in the country’s oil sector. Their management has failed Nigerians.

“Under their watch, we have seen fuel prices skyrocket without consultation or consideration of the devastating impact on the people. We have endured fuel scarcity while substandard, adulterated fuel is imported, causing further hardship.

“We demand the complete removal of the fraudulent fuel subsidy regime that has only served to enrich a select few. Full deregulation is necessary to introduce transparency, competition, and fairness to our oil sector.”

On their part, Otache and Isaac, insisted, “This act of economic sabotage has led to endless fuel queues, skyrocketing fuel prices, and unprecedented disruptions in the daily lives of Nigerians.

“We demand an immediate end to fuel queues, transparency, and accountability from all involved parties. We want to know how substandard fuel continues to enter the country despite assurances of quality control.”

On July 7, 2019, former President Mohammadu Buhari appointed Kyari as the 19th GMD of NNPC, but with the passage of the Petroleum Industry Act, his current portfolio is without recourse to previous employment ranks in the company.

NNPCL reacts

Reacting, the NNPCL spokesperson, Femi Soneye, said the protestors lack understanding of the sector.

He explained that contrary to their agitation, the GCEO ensured Nigerians had access to fuel at N620 per litre for over a year, even when the landing cost was above N1,100.

Responding via a chat, Soneye said, “Unfortunately, they lack understanding of the sector. If they were informed, they would know that the GCEO is not responsible for the fuel price increase; in fact, he ensured Nigerians had access to fuel at N620 per litre for over a year, even when the landing cost was above N1,100.”

Business

Renewed Hope Agenda and Impacts in Aviation* By Mary Odoma

Published

3 hours ago

November 5, 2024

Sahara Weekly

Renewed Hope Agenda and Impacts in Aviation

By Mary Odoma

President Bola Tinubu’s knack for selecting top talent is unparalleled. In his quest to build a prosperous Nigeria, he’s assembled an exceptional team. By leveraging their expertise, experience, and strategic insight, he’s fostering national stability, economic growth, and a sustainable future.

His latest win is in Aviation and Aerospace Development, where he’s appointed a fearless and straightforward leader, Festus Keyamo, SAN. Keyamo’s commitment to excellence makes him an ideal fit. President Tinubu’s vision for Nigeria is taking shape, and his leadership choices are truly commendable.

A dedicated, charismatic and impactful lawyer, the dynamic and astute developer is a terror to mischief makers and enemies of progress. A tough and forceful personality who is determined with an ultimate goal to change Nigeria.

Appointed on 21st August 2023 as the helmsman of the Ministry, Keyamo has been unwavering in his drive for positive transformation, reforming the sector and bringing about enduring positive impact in a transparent manner.

His Ministry has the core mandate of regulating air travel and aviation services in the country. It is also responsible for overseeing air transportation, air development, maintenance, provision of aviation infrastructural services and other needs.

A very patriotic Nigerian, Chief Festus has several achievements, in line with the Renewed Hope Aviation Roadmap approved by President Tinubu to his credit.

In a steadfast commitment towards revitalizing the nation’s aviation sector, Mr Keyamo was able to ensure the approval of the concession of the Nnamdi Azikiwe International Airport (NAIA), Abuja and Mallam Aminu Kano International Airport (MAKIA), Kano Airports. This is in line with the initiation of the Nigerian Airport Concession Strategy.

Also, in line with the Federal Ministry of Aviation Roadmap, Chief Keyamo initiated the signing of an MoU with the Nile University for the take-off of African Aviation and Aerospace University (AU). This milestone achievement of the Minister aims to integrate and create an avenue for the training, research and development of ready middle-class manpower for the sector.

Equally, under his watch, the pragmatic leader led the Ministry into partnership with the ICRC and also a collaboration with the IFC on infrastructural development. This partnership is to both develop and implement a comprehensive and durable framework that will meet the infrastructural needs of the sector over a long period.

Through Keyamo’s congruence and dynamism, the BASA arrangement is another revolutionary innovation aimed at ensuring the operationalization of direct flights between Nigeria and Brazil.

Keyamo’s motivation and altruistic devotion to having a functional aviation and aerospace sector also moved him to upgrade the Muhammadu Buhari, Airport, Maiduguri to the standard of an international airport. This airport is ready to commence full operation on January 1, 2025

In the area of staff motivation, retirees of the Ministry now have no cause for alarm as their interest is covered. Recently, the Ministry honoured 24 retirees drawn from the lowest rung to the highest. It is in a bid to acknowledge those who have contributed immensely to the growth and development of the sector as Nation-builders.

His prompt response to issues including distress reveals an empathetic personality and someone who is very much alive to his responsibilities. Recently, while reacting to the accident involving a helicopter on the 24th October 2024, Mr Keyamo, immediately upon receiving the distress call, activated protocols aimed at search and rescue operations, mandating all relevant bodies to do everything humanly possible to ensure the safety of the passengers on board the ill-fated vehicle.

The Minister was also actively involved with all the relevant agencies towards ensuring a coordinated response. His active and physical involvement led to the minimization of casualties.

In a show of collaboration and solidarity, the Hon. Minister travelled to far away Marrakesh, Morrocco, to give support to the 2024 International Transport Workers’ Federation (ITF) congress. His presence was to underpin the importance the federal government attaches to the role of the transport workers in stabilizing the aviation sector.

Festus Keyamo as the Honourable Minister of Aviation and Aerospace Development is certainly the best thing that has happened to the industry. He has exhibited passion, dedication and selfless forthrightness in the discharge of his duties and a total comprehension of what it takes to carry out his roles. He is well-groomed for the job and his background has helped him greatly towards shaping the positive impact he is making on society.

Today, Festus has proved that a faithful, disciplined, and dedicated Nigerian can stand out of the crowd because he symbolizes what governance is all about. These feats can only be achieved by a man with the right comportment and conduct in the service of humanity and the fatherland.

Deserving of note is that Chief Keyamo, through the foresight of President Tinubu has well-prepared team leaders appointed as heads of the agencies of the Ministry.

The supportive and collaborative roles of the Nigeria College of Aviation Technology, Nigeria Metrological Agency, Nigeria Civil Aviation Authority, Nigeria Airspace Management, the Federal Airports Authority of Nigeria, and the Nigeria Safety Investigation Bureau (NSIB), have brought about those tangible and noticeable volte-face experienced today in the Aviation sector.

With Keyamo at the helm, Nigeria’s aviation sector is experiencing a transformative shift, thanks to President Tinubu’s foresight in appointing well-prepared team leaders. The Nigeria College of Aviation Technology, Nigeria Metrological Agency, and others are working together to bring about tangible change. Keyamo’s dedication, discipline, and commitment to service have improved Nigeria’s image and reformed the aviation and aerospace sectors.

Odoma is the President of New Nigeria Network [NNN[ writing from Abuja.