By Amechi Ogbonna
When a fortnight ago, the National Bureau of Statistics (NBS) officially declared that the Nigerian economy was in the midst of a full blown recession, it immediately sent a clear message to all Nigerians that only a collaborative effort of all stakeholders can salvage the economy.
Even before NBS’s declaration however, more private sector operators had began heeding President Buhari administration’s invitation to the business community to join hands with it to create jobs for the teeming population.
Within the financial services space for instance,, some lenders have already collaborating with the government on job creation and economic empowerment of the youths and the impact is now being felt across the country.
For instance, since opening its doors for business about three years ago, Heritage Bank Limited has shown commitment to partnering various agencies of government to create a new Nigeria where all economic groups would be fully empowered to c ontribute to the nation’s Gross Domestic Product.
It was perhaps in recognition of this effort that the African Export Import Bank recently approved a $150 million funding support for its programmes.
According to Olusola Longe-Okenimkpe, the Divisional Head, Corporate Communications of Heritage Bank, “HBCL Investment Services Limited (HISL) a major shareholder of Heritage Bank Limited, has executed the term sheet for the issuance of guarantee for its $150 million Convertible Bond with the African Export Import Bank (Afreximbank) to support Heritage Bank Plc in its next phase of growth.
This lifeline came months after it concluded a business combination with Enterprise Bank Limited as part of its market focus and positioning strategy.
Managing Director of the bank Ifie Sekibo said the underlying motive for the combination was to facilitate the deployment of its retail banking franchise, especially with its aspiration to emerge as the bank of choice for small growing businesses.
According to him “Afreximbank, a frontline African financial institution, believes in the uniqueness of the business strategy of Heritage Bank, especially the Small Growing Business focus of the bank, which aligns with its founding mission.
Already the outcome of recent engagement with a number of institutional investors shows a growing appetite for the bond issuance which is scheduled to be completed within a couple of weeks.
Despite being one of the latest entrants into the Nigerian commercial banking landscape, Stateholders say Heritage Bank has set an ambitious target of emerging as Systemically Important Bank (SIB), where it hopes to leave more impactful legacies in Africa’s largest economy, having grown its balance sheet size to over N600 billion in just three years.
Nigeria currently has only 8 SIBs today out of about 22 banks including, FirstBank of Nigeria Limited, Guaranty Trust Bank Plc (GTBank), Zenith Bank Plc, United Bank for Africa Plc (UBA), Access Bank Plc, Skye Bank Plc, Ecobank Nigeria and Diamond Bank Plc.
But the bank recently received the Fastest Growing Bank of the Year Award 2015 by DOM Communications, publishers of the Nigerian Pilot Newspaper and Nigeria Newsworld Magazine.
Executive Director, Services Bank, Heritage Bank, Mr. Niyi Adeseun, who spoke while receiving an award of excellence as the fastest growing bank recently, assured that the bank would achieve all its lofty targets without doing anything unethical.”
“We have given ourselves a five year target and we are achieving a massive part of it in three years, if not for this economic slowdown we would have been close if not there now, “he said.
He said the future of the bank was bright with a balance sheet size of about N600 billion and over 165 branches across 34 states of the federation.
As part of its growth trajectory, the management has given its word that it would be listed on the Nigerian Stock Exchange soon, adding that it also plans to take some of the SMEs it has been working with along to the stock market
He said “we started with the first office before we had the opportunity to buy from the Asset Management Corporation of Nigeria (AMCON) Enterprise Bank Limited. Before then had 15 to 16 branches. But it was after the business combination with Enterprise Bank that we started building more new branches”.
“It’s been our plan since the day we started this business. We are not planning to be there alone; we are bringing SMEs that we have helped to grow over the years. Our objective is to produce more Dangotes in the nearest future. We feel happy that some people appreciated what we have done, since we started this institution a few years ago we had a plan and we are gradually working towards achieving our objectives. We thank you for voting us the fastest growing bank. Since 2015, we have made effort to be everywhere that we want to be and we are happy that it has been recognised.
“The economic situation in the country is an opportunity for us because where there is a challenge, there is also an opportunity. What is happening in Nigeria today is actually happening all over the world. Africa, Europe, and America. It is the same problem we are facing, it is economics, it is cyclical. The last time we had economic downturn was in 2008 and this is 2016. This whole thing started in 2015 and we did not do anything about it but trading blames. Where we are now requires patience and we need to produce to get out of it. The much talked about economic diversification has not been taken serious, if it has been so the situation would have been different, “he said.
Speaking on how banks can navigate the current economic crisis, he said, “as a bank, we need to begin to do things differently. We need to protect capital, liquidity and ensure that even if you cannot predict where revenue will come from we need to manage cost. This is not the time to have bad loans, some are bad already but the fact is everything is about economics. The main stay of the Nigerian economy is crude oil and it has gone down the way it is. We don’t know how long this will take but if we do the right thing and support the government, we will be out of it. Notwithstanding, we are doing the right thing as a bank by ensuring that we keep our cost low.”
Only recently the bank commenced the implementation of the N3 billion Youth Innovative Entrepreneurship Development Programme (YIEDP) of the Central Bank of Nigeria (CBN) following its selection by the apex bank as its pilot partner bank to unveil, administer and manage YIEDP. The programme, according to CBN, was designed to provide timely and affordable credit to assist youths in implementing their business ideas, thereby providing the mechanism of stimulating growth, reducing unemployment as well as addressing youth restiveness.
The programme focuses dependable job creating sectors such as Agricultural Value Chain (fish farming, poultry, snail farming), Cottage Industry, Mining and Solid Minerals, Creative Industry (Tourism, Arts and Crafts), and Information and Communications Technology (ICT).
In a statement announcing the implementation of the YIELDP, Heritage Bank said, “Following the inauguration of the initiative by CBN, the business application portal was launched on the 15th March 2016, and over 4,000 business applications were received within the first two months as the first phase. Out of the 4,000 applications, the bank has successfully shortlisted 1,547 business applications to proceed to the phase 2; being the first batch of the initiative.
“At phase 2, CBN Enterprise Development Centres (CBN-EDCs) across the six (6) geo-political zones will conduct a 3-Day business development training workshop for the shortlisted youths. Shortlisted youths will be contacted via SMS and Email on the details and modalities of the CBN-EDC training. After the training workshop, the youths will be required to write a comprehensive and viable business plan in order to access the YIEDP funding.
“At phase 3, all business plans will be submitted on the application portal for the Business Review Committee to screen, review and select the eligible and viable business for YIEDP funding.”
Meanwhile, the River State government has commended Heritage Bank for its role in enhancing youth entrepreneurship development and engendering self-employment through its various initiatives and products.
The Deputy Governor of Rivers State, Dr. Ipalibo Banigo, who gave the commendations at the one-day Leadership, Entrepreneurship and Development (LEAD) Summit hosted by the Rivers State Sustainable Development Agency (RSSDA) in partnership with the Second Opportunity Africa Foundation and Heritage Bank Plc said the bank was indeed setting the pace.
Speaking at the summit entitled, “Youths Leading Entrepreneurs in Non-Oil Economy,” Banigo said Heritage Bank has shown good faith to the youths, which goes on to portray the welcoming nature of the Rivers man personified in the person of their son, Ifie Sekibo.
Meanwhile, the wife of the Governor, Justice Suzzette Nyesom-Wike, affirmed that the LEAD Summit was the first of its kind in the state, while commending the bank for its supports to Nigerian youths.
The MD/CEO of Heritage Bank, Ifie Sekibo, who was represented by the General Manager, South Bank, Davidson Regha, said the drive to continue in the support of youths was to create, preserve and transfer wealth across generations.
He explained that the entrepreneur schemes of the bank in the support for business had always focused on dependable job-creating sectors such as agricultural value chain (fish farming, poultry, snail farming), cottage industry, mining and solid minerals, creative industry (tourism, arts and crafts), and Information and Communications Technology (ICT).
Sekibo restated that the aim of Heritage Bank being in the forefront of youth empowerment is to emancipate the latent entrepreneurial spirit in the teeming youths by providing adequate and affordable loans to execute their business ideas and, hopefully, migrate them to successful Small and Medium Enterprises (SMEs), thereby, providing the mechanism of stimulating growth, reducing unemployment as well as addressing youth restiveness in the economy.
He, however, stated that young entrepreneurs who have been trained in various skills such as catering, bead making, event management, fashion design, arts, hair dressing, shoe cobbling, among others, have also imbibed comprehensive business management and entrepreneurship skills that would equip them to become self employed.
Heritage Bank Plc recently announced gross earnings of N24.2 billion for the operating year ended December 31, 2015.
In its audited financial statement for 2015, representing its first full operating year since the acquisition of former Enterprise Bank Plc in October 2014, the bank posted a profit before tax of N1.5 billion,while profit after tax stood at N1.1 billion as net interest income closed at N12.2 billion.
Similarly the financial year under review saw customer deposits growing to N312 billion as a further indication of public confidence in the bank.
It also supported several large and small businesses with a loan and advances portfolio of N175 billion, thus achieving a total asset of N483.4 billion for the year.
Commenting on the result, Managing Director/Chief Executive, Heritage Bank, Mr. Ifie Sekibo, said: “This result is a testimony to the increased acceptability of Heritage Bank’s products and services by the banking public. It is also a reward for the diligent commitment of staff and management to our mission to create, preserve and transfer wealth across generations. “In the 2016 operating year, our desire to reciprocate the patronage of our customers and goodwill from stakeholders has prompted us to introduce new and bespoke services driven by cutting edge technology designed to empower businesses and individuals with opportunities to achieve economic prosperity. “The positive response to these efforts gives us assurance of improved financial performance in 2016 leading to enhanced returns to our investors.”