|
|
INTERVIEW WITH:
MR MICHEL ACCAD,
MD/CEO OF CITIBANK
February 16th,1999 |
FORBES: I’d like to ask a few questions, perhaps we could start by you just giving us a brief historical background of CITIBANK, when it was established and the reasons why?
ACCAD: Actually Citibank was established in Nigeria as Nigeria International bank, (NIB) in 1984 and Citibank was a minority shareholder in NIB, and we used to own 40% of that venture. End of 1995 early 1996, we increased our shareholding in the company to 75% and the name was changed in 1997 to Citibank Nigeria. So that is a very brief history of who we are in nigeria. We have been around in the country for sometime. Actually, 1994 was a 2nd re-incarnation of Citibank, because of the changes in regulations, we have been in and out of this country. We would probably have come earlier if we had been allowed by the regulations, but it was only around 1995 that the regulations were changed, allowing foreign banks to have a majority ownership of Nigerian banks.
FORBES : What is your position in the Nigerian market?
ACCAD: Right now the facts are very fuzzy, we are between number four or five in terms of asset size, balance-sheet size, revenue size and we are in the top 2 or 3 in terms of network coverage.
FORBES : And how have you fared in these past years, have you suddenly improved throughout the years, or you have been remaninig flat or something like that?
ACCAD: Well I think we’ve obviously, steadily improved from
1994 to about the end of the ‘90s and then we remained about flat, I mean, you know, moving between 4 and 6 and remained about flat back to number 4 or something this. So, we are rather flat over the past few years.
FORBES : What’s been your philosophy within the company to sustain this level?
ACCAD: Well, you know we started in the begining mostly as a bank for multinationals and this was our strength. Em, as you know the energy sector is very important for Nigeria and the service very important for Citibank because most of the multinational companies are our customers world-wide. So this was the core of our business, and over the past six years this tends to be the best name in the market, the margins tend to reduce in the specific business. So over the past few years we have diversified into more of the local market, we are relating much more actively with the local companies and we are very happy with the experience so far. Because I think our philosophical strategy is to be an embeded bank in Nigeria, to be part of the economy, we want to be as large as a large local bank and not to be viewed as a very dominant foreign bank, and a very important client.
FORBES : At the moment, your bank’s operations are restricted to the state capitals and other commercial cities. What are your plans for expansion?
ACCAD: Unfortunately not, because due to regulations we are kind of being forced to open a few branches in rural ares which don’t make much business sense, I think it’s part of constraints of being in business here. But apart from that, we intend to expand certain key areas, and I guess that this year we’ll add a couple of branches to our network of town-branches. So we’ll add a couple this year and a couple next year, so we have become quite aggresive with the opening of branches.
FORBES : And apart from branches, what is your strategy for general growth in the next few years?
ACCAD: Well, you see, branches in fact, as you rightly said, is just one way to expand your geographical presence. But I think that a much more compelling way would be that for example, in the new direction banking area, and we are key product innovators, in fact we are viewed as the market-leaders in several products, one of them being cashmart international banking and for example corporate finance and developed syndication, those more complex, custom-made solutions to customer’s (problems). But to come back to your point, banking as an industry is (about) how you can differentiate yourself from the competition, also how you can reach a lot of people without investing too much in risks and others. And for a lot of the customers, if they can effect their transactions directly from their office through a link with the Citibank, it is always easier and neater than physically having to come to the bank or to the branches. So on that, we ..... I think we have done a lot of things, we were the first to introduce, that was a few years ago, sort of we were passing the information system, obviously, on the banking site, and today we are also the pioneer, we introduced some transaction-initiation products, electronic-banking products that allow the customer to make a transfer from his office, or draw a monetary check or eventually raising a letter of credit or some service from his office, without having to come to the bank. I think there is no other bank (that) can offer this in Nigeria.
FORBES : Two years ago your bank escaped the list of distressed banks. How did you manage (that) economic crunch?
ACCAD: (Laughter) Well, I think a large number of banks in fact managed to escape this, and all tha banks that were ..... I think reasonably managed, were not directly affected by this; all those banks that were distressed were probably banks that did not have a clear business plan, you wondered why they came into business. They were in business simply for the purpose of routing this foreign exchange, because there was a big difference between what was the parallel rate, and once the differential was reduced they had no more purpose in life and you know they made a lot of bad investments, a lot of bad names as well, so I am very happy the way this issue is being resolved today by the government authorities.
|
FORBES : The Finance Minister, Mr Usman, told us that in a sense the banking sector is going to be the gate way to foreign investors when they come to Nigeria. How is Citibank going to help to accommodate these investors when they come to Nigeria?
ACCAD: I think obviously this would be the whole premise and also a reasonable expectation that the banking system (should) channel most of the investments in. Now, being the major or only international bank present in Nigeria, I think it’s em ... we have always (sought) contact with a lot of the potential investors that are interested in emerging markets and in Nigeria, and we are in frequent contact with such people. And I think that as soon as the possibilities come up, as soon as the investors see that the Transition takes place smoothly, and the IMF programme is in place, for restoring confidence in the country, you will see a lot of investment and it is my guess that many of the investors that will be coming from let’s say, the US or Canada or even many places in Europe, London for instance, would be channeled through Citibank because we have contacts throughout Nigeria.
FORBES : So you think that Citibank’s name is helping your operations?
ACCAD: Oh, yes, I think so.
FORBES : Would you say that, that is the only factor, because you’re a well established American bank, that this is the only factor which is going to attract (them)?
ACCAD: Oh no, no. Of course not. I mean, I don’t want to be misunderstood that ... it was a passive situation and we just bank on the name, no! I think the name is extremely important, but it is also the network that we have abroad, that can approach those investors, for instance we have a Unit in London that manages non-bank financial institutions and this tends to be the biggest investors in emerging markets in Africa, and potentially, therefore, in Nigeria. And therefore we pro-actively approach them and tell them, you know, by the way we have an operation in Nigeria, the market is opening up, the Stock Exchange looks like there is a good outlay for some of your investors. So, a lot of it is as a result of active work on the part of Citibank to let the investors abroad know.
FORBES : Could you tell us who your partners are in London and in the (United) States?
ACCAD: Oh, absolutely. Essentially, the Citibank officers there, who are very active in the cities. And then already we have approached investors that are interested in emerging markets. We did the first exercise six or seven months ago and the message that we received is that (they) are really interested, because if they need to have an emerging market portfolio, an African portfolio, they need to invest in Nigeria. But, the question then was, let’s wait until the condition (is right), until the Paris Club does a review, and the IMF has a programme in the country, which I think is happening today, and as those things happen, then the investments will come in.
FORBES : How are you going to compete against other Nigerian banks, with enormous overseas investments in Nigeria?
ACCAD: Well I think we are pretty good at competing against them, and as I said we have a strength which they don’t, which is the international network as well as the international competitiveness capabilities which, again, they don’t have. You know, they have local competitiveness capabilities, but it is more difficult for them to have the international one as well. I think all those advantages, make us a bit unique. For instance we believe that we will be a very active player in the privatisation
(programme). We have very good chances of being nominated for one or two of the major entities to be privatized.
FORBES : In the energy sector, or ...?
ACCAD: Oh no, it will probably be in telecomms or power sector(s) then we act as advisers on the sell-side for the government, but also we act as advisers to the buy-side for a lot of the international investors who are very interested in the energy sector especially. (In) the energy (sector) we are more likely to be active on the buy-side.
FORBES : On a more personal note, what would you say has been your greatest achievement since you’ve been MD of Citibank?
ACCAD: Em, I’ve said that we have made that entity at the same time more local and more global, more global by integrating it more within the Citibank family, in fact, I came in just as Citibank was taking over the majority ownership in NIB, and as the name was being changed to Citibank Nigeria, so this is an important part. At the same time, we’ve made it more local, because today for example, we have 4 out the
6 Executive Directors of the bank (who) are Nigerians, I can tell you there was none a few years ago. And we have a lot of very good people (Nigerians) that are now taking over very important responsibilities. And it’s an advantage to have the locals because they know the market better than the expatriate.
FORBES : As a final question, what would be your message to our 4.5 million readers in the States, what would be your message to foreign investors for example?
ACCAD: Well, my view of Citibank is that we are the best bank in the country, in terms of efficiency, service quality and at times (in) products, for example, international corporate finance, advisory, electronic banking and so on, and I think that this sets us really apart from the competition. And as I said, we are used to working with international investors from anywhere in the world because Citibank is present in all these countries, and we are developing the Nigerian market.
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,
May 31 st issue.
Developed by AgenciaE.Tv |
|
|
|
|
|
|
|
|
|
|
|
NIGERIA
