By Amechi Ogbonna
I have been in banking for three decades and that is what I have done for the better part of my life because I went straight into the profession fresh from university. I was fortunate to have worked in some great institutions including Fidelity Bank from where I would be retiring come December 31, 2020, as Managing Director/CEO.
Let’s say there are about 30 banks in Nigeria, a country of about 220 million people. It simply means that for this period that I was a bank CEO, there can only be 30 people out of 220 million people that could be CEOs.
So, for me being CEO of Fidelity Bank was a call to duty which I hold with a great sense of responsibility.
Why Nigerian banks beat international negative rating post-COVID -19
Nigerian banking industry I believe has been positively impacted by the fiscal and monetary actions taken by the Federal Government to accommodate the socio-economic impact of the pandemic on the people and business landscape. These include a forbearance programme, the easing of monetary policy stance to promote a low interest regime, and launch of the N2.3 trillion stimulus package under the Economic Sustainability Plan (ESP). These steps by government eased pressure on customers to effectively service loans held, and thus reduce the risk of loan defaults across the industry.
In the case of Fidelity Bank, our proven capacity to monitor the business environment and identify risks as well as growth opportunities proved invaluable. In this regard, the bank had conducted various scenario assessments prior to Nigeria recording its COVID-19 index case and identified business sectors expected to be impacted by the pandemic. As a result, we were primed to quickly adapt our strategies for business continuity and market focus in time with government enforced lockdowns. While it has not been a walk in the park, our focused delivery of an evolved business strategy was largely responsible for our positive performance this year.
Allegation that some banks are relying on CBN for funding vis-a vis Fidelity Bank’s liquidity position
While I cannot presume to know the level of reliance of some banks on CBN funding, I can attest that that is not the case at Fidelity Bank. Our 9 months – 2020 results show an increase in our liquidity ratio to 35per cent from 32 percent in our audited H1-2020 results.
Our liquidity position remains strong, above the required regulatory threshold and we expect to maintain this in line with our historical stance.
Impact of our focus areas to bank’s performance
Fidelity Bank has undergone significant evolution in business culture over the past few years all towards improving operational efficiency and expanding market share.
Our principal ethos of Customer First, guided our operational realignments and a comprehensive procedural review towards improving efficiency. The bank’s technology drive and digital transformation initiative are however the core platforms so far leveraged to achieve of our short to medium term business goals.
On the operational end, automation and robotics have replaced manual and repetitive processes to cut down processing times and improve efficiency. This has allowed us to expand our customer reach, without sacrificing our high quality of customer service.
The bank has also introduced several products and enhanced service features well suited to the needs of our ever-growing customer base. Our digital offerings lead the industry in terms of innovative features with close to 90per cent of our transactions now handled outside our brick and mortar branch network.
The result of the success of our adopted Digital culture has been evident in the performance trend witnessed over the past few years and even sustained despite the impact of the pandemic.
Cost cutting through staff rationalisation and pay cut in the wake of Covid-19 pandemic
Fidelity Bank has not been forced to take such actions since the advent of the pandemic largely due to our digital journey as highlighted earlier. Our current reliance on digital platforms had already helped us improve our operational efficiency significantly over the past few years.
Our transition to remote work protocols under our business continuity plan was activated once the pandemic hit our shores, and this has further helped us save costs.
Case in point is the drop in our cost-to-income ratio to 66.3per cent as at September 30, 2020 from 73.4percent as at December 31, 2020.
What investors should expect from the bank this year
We expect to remain true to our premise as an institution that keeps its word despite the challenges faced particularly this year.
The fact that our strong operational and risk management structure proved capable during this period of heightened uncertainty is a testament to the institution.
Our performance so far this year has also matched guidance which is evidence of our ability to sustain our trajectory even as the year draws to a close
Can Fidelity Bank sustain the trajectory of an impact investor in the long term. What are your expectations as you exit the stage
A resounding yes! Clearly our performance as an institution has been as a result of a core evolution of our business culture built on a platform of upgraded operational structures.
Fidelity Bank is poised to advance on its growth trajectory as our business institutions have been built on fundamental principles which would outlive any one of the managers
What investors should expect from new directors of the bank
The recent appointments to the Board are well timed and a fundamental step in the execution of the bank’s corporate strategy. The new leadership will maintain the pursuit of the corporate vision of business growth in line with shareholder expectations.
I believe investors should expect to witness more successes from the management at an even faster rate of growth. We should see significant enhancement in the core business structures of the bank which should translate to impressive performance growth down the line.
My parting word for investors of the bank
It has been the honour in my career to have been selected to undertake the stewardship of our great institution and I am humbled by the faith placed on me during this time.
The successes recorded were indeed a team effort which will continue as the new leadership selected from this team takes over the mantle.
I hereby make an earnest request that we maintain the same level of support to the new leadership and executives as they take up the responsibility of leading Fidelity Bank to greater heights.
My achievements as MD/CEO of Fidelity Bank
While I must once again note that all the successes of the bank under my stewardship were a team effort, there are a lot of points to be referenced as regards the improvements witnessed in its performance. I would however focus on our Digital Transformation initiative as the most impactful amongst during this period.
The initiative has touched every facet of our business from all back end activities to all product types and service features offered to customers. Enhanced digital platforms have helped achieve quantum improvements in operational efficiency while providing a platform to handle the rise in customer size and transactions.
This however does not diminish other successes such as our brand equity growth in the market, retail and SME market capture and profitability trend during this period.
Other key achievements of the bank under my watch include the rebranding project which drove an increased youth appeal; revamping of the bank’s performance management culture to instill a culture of performance; technology refresh and digital transformation in furtherance of the digital retail strategy he implemented.
Apart from the widespread recognition and goodwill that the Fidelity brand now enjoys, it is on record that the bank, under my leadership recorded consistent growth in financial performance.
Specifically, PBT grew by 236 percent from N9.0billion to N30.4billion in 2019; RoE rose from 5.5 percent to 13.3 percent while Customer Deposits grew by 68 percent from N806.3billion to N1,352.3billion. Also Savings Deposit rose by 275 percent from N83.3billion to
Similarly, Net Loans and Advances growth of 174 percent from N426.1billion to N1,165.8billion with Customer Base increasing by 121 percent from 2.4 million to 5.3 million and Digital Banking penetration improvement from 1.0 percent to 50.1 percent accounting for 28.4 percent of total fee income.
What next after retirement? Is it goodbye to banking?
I may not want to give away all the details of the immediate and long-term personal plans, However, I intend to continue to remain fairly active in the financial services sector albeit in non-executive capacities. This is to ensure the knowledge and experience gained during my career so far, remains accessible to the industry. The corporate place is not somewhere you can exit with finality at my age of 56, because companies are looking for people with corporate experience. Corporate governance has been taken to higher levels while responsibilities of directors have made it very critical that anyone who runs a company, especially publicly quoted ones, must be people who are deep in understanding of governance. I won’t rule out being in the corporate environment but in what capacity I don’t know.
Role mentorship played in my career and those that really helped me to climb the ladder
Quite coincidental you asked this question because I am also the Chairman of Mentorship Advisory Committee of the Chartered Institute of Bankers of Nigeria (CIBN). I do not know why they selected me but maybe they know that mentorship has played a key role in getting me to where I am today. I also use my experience to talk to people about the power of mentorship, especially at our training school.
Though I was very familiar with mentorship and indeed enjoying mentorship, it wasn’t until I went to a programme at Harvard that I started to realised the need to formalise and put a structure to mentorship. To buttress this let me share a story with you. I was meant to read medicine or become a soldier but by providence I entered university to read Agricultural Economics.