Anywhere In the world, the 125th anniversary of any one, corporate or personal, is not an ordinary achievement. Even though the life span of corporate organisations usually tend to stretch into infinity, far beyond the 70 plus biblically approved life span of mere mortals, yet the lesson of history is that corporate longevity is no mean feat. It is especially so in Africa, being relatively new comers to the stable of nation states and corporate culture. Indeed, being Nigerian makes it even more outstanding. As the old Nigerian joke goes, “…all things bright and beautiful, Nigeria kills them all”. Put simply, it is difficult to run a business successfully in Nigeria or anywhere else, for that matter! As US President, Donald Trump once counselled in one of his books, The Art of the Deal, it is better to invest in real estate than in the stock market. As he recalled, “when I travel to some countries like Mexico City for instance, I can still see buildings decades old still standing, while some companies which were set up a few years back had all collapsed”
So, it is not only in Nigeria that companies fail easily. It is a global phenomenon. But Nigeria must take the prize in some respects. In a survey conducted by Business Hallmark some years ago, it emerged that Nigeria has the highest rate of Bank failures in Africa. Since the liberalization of the banking sector in the early ’90’s, scores of deposit money banks have shut their doors to business. In fact the mortality rate is higher than any other major industry.
It is for this reason and everything else considered, that I stand with the cheer leading party to applaud First Bank limited and the entire FBN Holdings Plc on this auspicious occasion. The simple truth is that FirstBank has done very well. After the second world war, a non-plussed French man was accosted by his compatriot with the query, “what was your greatest achievement during the war?” And without missing a beat, the fellow replied “I survived!”.
If all FirstBank achieved in 125 years was merely to survive, it will still rate as an authentic hero in my book. As a manager of men and resources myself, I have a first hand knowledge of the asphyxiating challenges of operating businesses in our clime. Obviously, it is anything but easy. And you can take that to the bank.
But First bank has done more than that. It has run a largely profitable and hugely successful institution over decades, in exacting turbulent operating environment and egregious policy regimes. It has kept pace with rapidly evolving socio-cultural and professional environments, all the while consolidating its foundational structures for sustainable growth into a future without end. Some of the achievements of First bank may appear ordinary, especially when viewed out of context. However, a more informed appraisal will reveal that these achievements have been extraordinary.
For a long period of time, it epitomized banking in Nigeria and even functioned in the role of the central bank. It is quite remarkable that it has maintained its unique pan Nigerian outlook despite the many ownership changes. Its board and top management composition reflect a pan Nigerian character, something that is lacking in similar institutions of its size and ownership structure. Its services still rank among the best. This is in spite of the challenges of its legacy status. Thanks to the periodic operations reviews, especially the CenturyII project, it has succeeded in recreating the staff profile by infusing new generation professionals with the requisite skill and expertise to deliver high level banking services to an increasingly sophisticated banking market. More crucially, it has remained a profitable business enterprise to its shareholders and other key stakeholders. In bad times and good times, it has always strived to deliver on this core mandate.
Good Bye Yesterday… Welcome Tomorrow
In over 120 years, FirstBank led the industry as the lion king. By 2012, it ranked as the biggest bank in Nigeria, going by the books. With a total asset of N4.514trillion and an operating income of N294.284billion, it was at the top of the pecking order. But we are now in 2019. New kids have emerged on the block. Zenith International Bank and Guaranty Trust Bank, have grown so exponentially to challenge the dominance of FirstBank. FirstBank’s N3.3trillion in total assets, N2.5 trillion in customer deposits and 19% capital adequacy ratio is no longer enough to guarantee it the prime position. Zenith and GT Bank boast of more impressive numbers, and so have upturned FirstBank as the industry leader. It is ironical that what gives FirstBank its intrinsic advantage – its longevity – may have also become a burden. The two institutions are toddlers in comparison and thus are not encumbered by the legacy challenges bedeviling FirstBank. They are thus free to soar to even greater heights.
To reclaim its undisputed leadership, FirstBank has to continuously review its operating systems and structures. One of the issues it has to take a long hard look at is the Holdco arrangement. The concept of the holding company, if not properly defined, structured and implemented can be clumsy and cumbersome. Ideally, the GMD of the holding company, Fist Bank Group, should be the Chief Executive officer of the group, which means that he should be the Chief Executive Officer of the flagship subsidiary, First Bank Limited. Obviously, the main cherry in the First Bank sauce, is FirstBank. Its head should be the GMD/CEO of the group. To subordinate him to the GMD of the group is like the tail wagging the dog. The management of the group should be clear on what they really want. Creating superfluous positions to serve expedient purposes will only hurt the long-term interests of the institution.
The main takeaway from the bank’s longevity is that personal interest don’t matter as much as institutional interests. It is only by continuous fidelity to these eternal realities, that this ageless elephant will retain its vitality and hold its ground against the onslaught of the young turks, even as we march into the unchartered territories of the emerging new world.