Oloketuyi: Nigerian Banks Ready to do More in Critical Sectors
Managing Director, Wema Bank Plc, Mr. Segun Oloketuyi, in this interview with Festus Akanbi, speaks on the bank’s 70th anniversary and the roles of banks in nation building, saying Nigerian banks are ready to increase their offerings in the critical secto
What does it take to manage a 70 year-old banking institution like Wema Bank?
Managing any institution irrespective of its age requires a deliberate and conscious effort in building organisational capability, best-in-class structures, processes and controls. For Wema Bank specifically, yes we are 70 in age, but we believe and act like a young, contemporary and vibrant organisation. We have spent a significant amount of time in discarding old processes and techniques and make sure we adopt global best practices. We focus a lot on talent and skills development, we ensure we improve in our service delivery and customer experience. For us, every day is a new learning experience; we aim to improve and get better every day. It’s been tough, yet rewarding and we are glad that the hard work over the years is yielding positive results.
For a bank like Wema, which has undergone several phases, what are those things you can call the advantages of an old institution like Wema in a competitive world of Nigerian banking?
First and foremost, we owe a great deal to our loyal customers. We have customers that have been with us for decades and have remained committed to the Wema brand despite some turbulent years. Those customers are our brand ambassadors and they are the ones marketing the “New Wema Bank” that has evolved. Wema is a case study in resilience. The many cycles we have been through count for us as valuable experience, which have greatly helped in managing the bank prudently.
Can you give us a progress report on the quest of the bank to go for a national banking licence?
Wema Bank is currently licensed by the Central Bank of Nigeria (CBN) as a Commercial Bank with regional authorisation, operating in the 12 states of the South-West and South-South geo-political zones and the Federal Capital Territory.
Prior to the new licensing regime, Wema Bank had operations in 158 branches across 27 states of the federation. The decision to scale down operations in 2010 and operate as a regional bank was a deliberate interim measure to reposition the bank for better performance. The resultant shrinkage in the geographic space of operations enabled us to focus business development on our areas of strength as a repositioning strategy in the short term. We were also able to wind down operations in locations where the bank did not have viable business. Having stabilised the bank through improved processes, systems and people, we are well positioned to replicate our new and tested service delivery model in other locations outside our current geographic space.
The bank has applied to the Central Bank for a national licence and we are following up to fulfill all necessary conditions for the final approval. We hope to conclude the process this year.
What informed your choice of the topic, “Why Nations Succeed”, and what were the lessons derived from the lecture?
Why are some countries richer, healthier and more prosperous than others? Is Nigeria adequately fulfilling its social and economic potentials? These have been recurring questions both in global and national discourse over the years. James Robinson’s book, Why Nations Fail: The Origins of Power, Prosperity and Poverty, co-authored with Daron Acemoglu, opens a new path of exploration on these questions and provided some thoughts on how the gap between rich and poor countries can be closed or at least narrowed significantly. The book upends the conventional thinking to show us that, despite what some historians claim, good climate and technology are not the main factors determining a country’s success.
The theme of the lecture is particularly apt for the time we find ourselves in Nigeria and it is our modest contribution to the huge quest for national development.
Going by the feedback we have received, the lecture was a huge success and a number of critical issues discussed have been highlighted which we will take upon ourselves as a corporate institution to communicate to decision makers in government because we believe they can help to reshape the direction of policies around social, economic and political development in Nigeria.
Will you say Nigerian banks are living up to the billing in the process of nation building in Nigeria?
Nation building does not happen by accident. Deliberate planning has to go into making it happen. It requires good leadership and strong institutions. It will thrive where there is rule of law supported by a robust and vibrant legal framework. Banks have a major role to play in economic development, which is critical in the process of nation building. Nigerian banks have made worthy contributions to this process. The whole business of banking has been modernised and is not too far from what obtains in the more advanced world. A striking example is the revolution that has taken place in the payment system in the last couple of years. The initiative around financial inclusion is another major achievement of the banking sector. Also, with increasing size in the asset base of Nigerian banks, we have seen more participation by banks in the real sector of the economy. However, there are a lot more that the banking sector can do in the process of nation building. With a more stable macro-economic environment and more collaboration between the monetary and fiscal authorities, banks will be in a stronger position to do more in the critical areas of the economy, which include the real sector and the small and medium scale enterprises space.
environment this year?
Banking in Nigeria, in our current environment, is inextricably linked to our political goals and I believe strongly in the mutual relationship that exists between fiscal and monetary prudence. Personally, I expect a whole lot to be done in the harmonisation of policies between the fiscal authority and the CBN to alleviate the current challenges in the economy. However, the incoming government is inheriting major challenges chief amongst which is the depressed international crude oil price which has directly led to a significant devaluation of the naira, and an economy that is not properly diversified to absorb global systemic shocks. Therefore, while I expect positive changes in the banking environment, it would be too optimistic to forecast drastic changes under our current climate.
What are the plans being put in place to take Wema to greater heights after the 70th anniversary?
Our 70th Anniversary allows us to look back and celebrate our values and history. However, allow me to reiterate that the turnaround programme of the bank, which started a couple of years ago is fully on course as we continue to hit our milestones year-on-year. We also recognise that the Nigerian economy is slowly spreading its wings and growing. There is a deep appreciation of this within the bank and we continue to build capacity in new and emerging areas of the economy while we consolidate our positions in areas of established strength. It is my belief that the bank is firmly on the path of sustainable growth and I believe we can be proud of our achievements over the past four years.
How profitable is Wema Bank?
It gives me great pleasure to report that Wema Bank continues to record year-on-year improvement in its financial performance. The bank has improved significantly on its profitability and customer base despite shrinking margins and intense competition. The progress recorded is a result of the continued execution of our three-year growth strategy – Project LEAP.
In the immediate past financial year, that is 2014, the bank recorded a growth in Profit before Tax of 58.8 per cent from N1.9 billion in 2013 to N3.09 billion on the same capital base, an indication of improved efficiency and better utilization of resources.
Wema Bank has become a stronger, more efficient, resilient and customer-focused organization with a robust risk and governance structures in place to support our growth plan. The Bank has realigned its business focus to concentrate on its key area of strength, which is Retail Banking. We have used technology to our advantage, deploying in-branch solutions, mobile and internet applications and other social media tools to drive customer patronage and to reduce our cost to serve. We have continued to contain our operating expenses and at the same time reporting significant improvement in our fee-based income lines.
As we turn 70 as the longest surviving indigenous bank in Nigeria, we are glad to unveil a New Wema Bank that responds faster and better to customers’ needs whilst adapting more quickly to the ever-changing dynamics of the industry.
We are focused on moving Wema Bank to become one of the most efficient mid-tier banks in Nigeria in no distant future. We are confident that we will sustain the momentum and improve on our profitability and volume growth from year to year.