NIGERIA - Finance
CEO, Access Bank
Herbert Wigwe started his professional career with Coopers and Lybrand Associates, an international firm of chartered accountants. He spent over 10 years at Guaranty Trust Bank, where he managed several portfolios, including financial institutions, corporates, and multinationals. He left Guaranty Trust as an executive director to co-lead the transformation of Access Bank Plc in March 2002 as Deputy Managing Director. He is an Alumnus of the Harvard Business School Executive Management Program. He holds a master’s degree in banking and international finance from the University College of North Wales, a master’s degree in financial economics from the University of London, and a BSc degree in accounting from the University of Nigeria, Nsukka.
I do not view these awards as personal recognitions; they are a recognition of the work our team did in the previous year. We have been able to strike a strong balance between maintaining profit and doing things that are sustainable. We exist to make economic returns for our shareholders; however, there are other things that are important to us, namely issues around people, the planet, profit, and more. If there is anything that has enabled us to win significant accolades, it is the team I work with and what they have achieved as far as those elements are concerned.
The important thing is to have a well-rounded value system. We started our journey on sustainability-related issues around five or six years ago. Some people pay it lip service but it is important if a company wants to grow in a sustainable way, if it wants to have a better place to do business, if it wants to make sure that the communities that it operates in will benefit, and if it wants to make our country a better place. The whole idea for my colleagues and I is to pursue sustainable banking practices. My advice is simply this: Do the right thing. It is the right way to do business.
From the beginning, we assembled a strong team and drove a culture of excellence. This ensured complete harmony in terms of the value system of the institution—something we desired from the start. We however had to break it down into bands of five years, each with stretching goals. We did not target being one of the top three in the first five years, but rather in the top 10. Right after that, we wanted to be in the top five and be seen and known as the world’s most respected African bank. A great deal of what people do is as a result of their background, training, professional experience, exposure, and upbringing. We want our people to confidently stand toe-to-toe with other professionals in their field anywhere in the world.
A company needs a solid financial background to be the world’s most respected African bank. It must have strong numbers, a global outlook, and a strong presence on the continent. All of these have been achieved and our various subsidiaries are doing well. However, the second part—which is just as important—has to do with the softer issues around sustainability. This revolves around what we do with respect to the three elements of people, the planet, and profit and what we are doing with respect to the communities where we do business. This does not only involve Nigeria but all the markets in which we play. These are the things that ensure that a company will earn respect internationally, and today we are close to that objective.
We have a hit map of places that we could possibly expand to. We have decided to slow down our African expansion and consolidate on where we currently are. Nigeria represents the greatest opportunity in the continent by far and a company has to be extremely strong at home before it ventures out. We are building and strengthening our business in Nigeria—the central point from which we drive our strategy for the rest of Africa and the other countries where we have a presence. We will add one or two new locations; though the contributions from all of those countries are marginal in comparison to Nigeria. We will, however do them over time.
The capabilities of banks now are much stronger than in 2007 and 2008. Any time we go through a recession, it has its implications on the industry, hence, there is a heightened risk level in terms of provisioning. We did not have the foreign exchange capacity and because Nigeria is largely import-oriented this introduced increased risk elements, particularly for manufacturing concerns and others that typically rely on imported raw materials. There is some increased risk from non-performing loans that are likely to season within the next 24 months, but this likelihood has dropped.
There are two schools of thought. Some say economic development precedes the development of the industry. However, in Nigeria and most of the emerging markets, developments in the financial services sector drive economic development. With greater financial inclusion, banks are able to access much more liquidity, which they can then pump into the real economy. As a result of competition and the greater skill levels in the industry, we are likely to see much larger banks in the next five years and these banks will push Nigeria’s GDP growth to higher levels. If we go back 10 or even five years ago and look at the relative size of banks compared to today, it is clear that this is the case. The next five years will also be dramatic because banks are now deepening themselves in the retail market, providing better services, lending to individuals and customers, changing their operating styles, creating a stronger database, and creating all the relevant governance required to establish credit for individuals. All of these lead to the development of the economy at the end of the day. Apart from the banks, other institutions such as the pension funds are likely to start looking into opportunities for development in infrastructure and agriculture. All these will help Nigeria achieve double-digit growth, even without changes to the oil price.
2018 will be a much better year as the worst is over. Nigeria is expected to come out of the recession and we will begin to see reasonable growth as far as the markets are concerned. Banks will adjust from the seasoning of those loans that basically crystalized coming from the devaluation; however, if we look at the relative health of banks, some banks are strong and therefore have the capacity to push the market in terms of the economy. I believe 2018 will be a much better
NIGERIA - Energy & Mining
Group Managing Director, Eraskorp Nigeria Limited