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NIGERIA
A new business climate |
 Strategy
 OUR VISION
To be nigeria’s foremost financial Services organisation
MISSION STATEMENT
To provide world class quality financial services that meet the business needs of our select local and international clients using highly skilled professionals and modern technology.
To always achieve superior performance thus providing outstanding returns to our stakeholders.
INTERVIEW WITH
MR JOHN D. EDOZIEN
MD/CEO, AFRIBANK
February 16th, 1999.
FORBES: Mr. Edozien, we’d like to ask a few questions and want you to start by giving us a brief historical background of the bank and your role within the bank.
EDOZIEN: Afribank started as a French company in 1960, and during the indigenization exercise, government acquired about 60% of the International Bank of West Africa as it was then known. At the point at which this registration was made, there was a privatization exercise around 1990/91. Government’s 40% privatized, and also the French component, which was then BIAO (Banque International de l‘Afrique Occidentale), was liquidated.
FORBES And the state retained 60% of the bank?
EDOZIEN – No. First of all the government sold its own shares of
40% but then it had to rent out 40% of the French component, BIAO because it had gone into liquidation. That 40% is now about 32% because they have been further enlarged and merged…. Today, Afribank is a public limited company, Plc, with about 140 branches
(providing) full service in most of them.
We have about five subsidiaries in the industry: a fully-owned Merchant Bank, the Afribank International Merchant Bank. It has a fully-owned stock-brokering company, a fully – owned insurance-brokerage company, a fully-owned Estate company. And there is one which is just about to go fully operational, which is the Afribank Trustees and Securities. And the whole idea is based on what we regard as a Financial Supermarket. Some kind of a one-stop banking, where a customer of Afribank can go into any of our branches and can transact a whole range of finance (businesses).
FORBES: You’ve spent the last three years (making these innovations) such as computerization. What have been the major results of the scheme and how do you envision these results?
EDOZIEN: It’s been in my view spectacular; we have considerably improved the IT-enhancement; computerization even engineering, to quite a significant level. The results have been dramatic because customers are so very happy with our services. There is no more waiting in the banking hall, and the engineering has not only been in terms of systems, it has also been in terms of the service culture of the bank. What we are trying to do now is to extend the full range of information technology, and introducing connectivity. We are now connecting our branches. The three branches in Lagos which are the top of the range of our bank are fully interconnected. You do not have to go to your branch to transact any banking business. We have achieved that in Lagos and we are now moving up-country. We have a freeze of our computerization and IT-enhancement project which is now underway due to terminate around March, and by the time we complete that, we would have fully connected branches which account for about 80% of our business. We are going to be linking these branches both through microwave and through Visat. We are also migrating into a very robust application software Globus which is well-known, the world over, and will completely turn Afribank into a complete system. This we hope to achieve by the middle of next year.
FORBES: Could you give us your profit figures over the last three years?
EDOZIEN: Yeah. Let me just take you through the 5-year Financial Summary of the bank. From 1993, the asset base of the company grew from about x 12.7 billion to about x 38.5 billion in 1997. By the end of our (current) financial year which is going to be in March this year it would actually have risen to about x 45-48 billion. The shareholders’ funds, which is the net asset, has also risen from about x 893 million to about x 2. 879 billion.
FORBES: Are there any other philosophies or ways, besides your computerization and personnel development, through which you try to raise these figures?
EDOZIEN: Certainly. In Afribank we have a service culture which is pervasive: throughout the bank we have continued to emphasize competent customer-relationship, make sure that (we) are constantly reviewing the relationship with the customer, (better) understanding his needs, customizing service to suit the customer, and also continuously introducing products that address the new customer-requirements. I think we have been very successful in that area and it is continuing to drive our success and our position in the market-place for instance.
FORBES: The Minister of finance, Alhaji Usman told us the financial sector is going to be part of the gateway for foreign investment in nigeria, how is Afribank planning to accommodate these foreign investors?
EDOZIEN: Well, certainly, it is the hope of this country. That is the hope of every emerging market: that there is going to be considerable inflow of foreign capital into the country, by way foreign, direct and peculiar investment. Clearly, that is it. We should be able to play the role, as a custodian bank, being the recipient of this inflow of capital, manage (it) on behalf of the foreign investors. But of course we are also going to mobilize a lot of (local) savings which we make available by way of financial intermediation credit expansion to investors who come here and need local capital. Afribank has remained in the forefront of providing funds for example, to the oil industry. We have supported major, triple A customers who need investment capital. That way, Afribank is positioning itself to play a middle role in this kind of upsurge in investor interest in nigeria. But I still make the point that, it is to be expected and hoped that as part of overall growth strategy of this country, that investors also bring in capital, as direct portfolio investment, and it goes on to expand the totality of investment capital available in this country.
FORBES: As Forbes is an American magazine, we’d like to know if you are already establishing partnerships with any American firms or American partner-banks?
EDOZIEN: Em, we had some correspondent relationships with Continental Bank before, I think that has been overtaken now by events…
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FORBES: You were talking about five subsidiaries, where are they? In Gabon, there’s one?
EDOZIEN: Yes. All the other subsidiaries are based here.
FORBES: So you don’t have any branches in UK or any where else?
EDOZIEN: No, we don’t. (But) that is something we would like to do. We are now exploring the possibility of having a relationship in terms of money-transfer business with a US –company. We are exploring this very closely, and this will soon come about. It is going to be a very useful product for us here. As a matter of fact one of the things we are exploring that are going to be quite novel products is Internet-driven cash remittances or money-transfer services to this country. It’s going to be something like money transferred without borders, wherever you are in this world you can send money through any of the credit-cards to our web-site and once the money is there, we can pay your beneficiaries. It’s going to be a very fast service. And we hope to derive a big volume of business.
FORBES: You have started negotiation with some companies? Could we have some…?
EDOZIEN: I think it is premature to say that. I don’t know when this is coming to pass but, it is something that should be up and running by April (1999). So, if this is not in place I think we can still revisit it and I can update you on what we have been able to do so far.
FORBES: What are the particular advantages from your bank for an investor in the local market? Other banks are getting computerized and opening branches as well. Why would an investor come and choose Afribank in preference to another bank?
EDOZIEN: First, I think because you have to look at a bank, its service culture, its potentials and be able to assess the scope-potential. Secondly, you ought to be able to look at the banking products which it promises to offer in terms of how they address the needs of the depositors and the investing public. One discriminating factor which sets banks apart from one another is the quality of customer-service.
There is also the issue of reliability, having the capacity to deliver the quality service to an investor. The base of Afribank is such as to engender considerable confidence and trust.
FORBES: Are you now formulating any specific strategies that would touch investors?
EDOZIEN: What we also try to do in Afribank, knowing that there is a lot of investor-interest in nigeria, we send out feelers: Afribank will like to enter into some kind of structured alliances with some foreign investors. We are also exploring the possibility of having co-investors coming to take blocks of shares, available particularly the 32% shares now being worked out with government. We have been in discussion with them. Government is quite willing to allow a foreign investor, particularly one that is already in the financial service system to come in and have access…
FORBES:… as a partner…
EDOZIEN:…as a partner, yes. Take over all these shares or a significant part of it. One of the benefits is that you are going to have to play roles in management and the bank will benefit from his know-how and a value-addition in terms of the market-outreach, technology, and it gives such an investor a leverage on his strength in the nigeria market. That is the kind of thing that we are hoping to be able to bring about through extensive discussion and marketing of this kind of potential foreign investors.
FORBES: On a personal level, what would you say heve been your greatest achievement since you’ve been Managing Director of the bank?
EDOZIEN: First of all, when I came here, it was a very crucial period in the bank’s history; it was transiting from private banking into public banking. We made that transition possible. I was able to add considerable shareholders’ value to
(the company), which is a major expectation from investors. I read you the figures (and) you can see the growth in the capital of the bank. Now, there was also the need to change the operating environment through appropriate investment and technology. We also managed to do that. We have also been able to grow in a very careful and strategic way in the company. So, we delivered on that. I think also we have been able to cleanse up the image of this bank, to enable us to do something in that area, by completing a major, Head office building which is just next door, and which is going to dramatically improve the internal operations of the bank. Many Head office branches of this bank were scattered all over Lagos. What we have done is to make it possible to bring all the Head office branches into a distinctive building to drastically facilitate management.
FORBES: And makes access to the bank simpler?
EDOZIEN: I think also that what is most important is to build that angle, the customer-segment for the bank, that as a middle bank maintained and enhanced by it market share I think that is very, very successful. We have enlarged our network to would be customers, that niche of the market that has helped to maintain Afribank as a leading bank in this country.
FORBES: As a final question, what would be your advice to investors in the US?
EDOZIEN: First, as a national, I would like to say that nigeria is a most attractive investment environment if you have not been here, you are likely to be put off by inaccurate stories about what this environment looks like. But it takes coming here to determine himself and never wanting to leave!
FORBES: It is a fact…?
EDOZIEN: Those who are here have been for decades and have even set up here. And now that there are many investment environments still available, particularly in the emerging markets with rates of returns that are… than the nigerian environment. This is one message. Then, at the bank level, I believe that the finance industry of this country has developed in such a way that it is now able to support tremendous levels of investment activity and that Afribank is a leading institution in the forefront of these efforts, in that our doors are open and we are very happy to welcome any inquiries on overseas investment on particular ways in which this bank can place at their disposal the enormous banking services which are available to them.
FORBES: Thank you very much. |
© World INvestment NEws, 1999.
This is the electronic edition of the special country report on nigeria published in FORBES Magazine,
October 18 th issue.
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