NIGERIA - Finance
Founder & Chairman of the board, NOVA Merchant Bank Limited
With 30 years banking experience in major financial institutions, Phillips Oduoza is the founder & chairman of the board of Nova Merchant Bank Limited. Prior to promoting Nova, he recently retired as the global CEO of UBA Group. He has served on the board of several companies, such as Diamond Bank Plc, Interswitch Plc, Valuecard Plc (Unified Payment Services Plc), Nigeria Interbank Settlement System, Nigeria Economic Summit Group, Financial Markets, and Dealers Quotations (FMDQ) amongst others. He currently serves on the boards of Veritas University Abuja, Lagos State Security Trust Fund, and the Development Bank of Nigeria. Oduoza is a Fellow of the Chartered Institute of Bankers. He has a BSc. hons with first class in civil engineering, an MBA in finance, and is an alumnus (AMP) of Harvard Business School.
Today in Nigeria, deposit liabilities and risk assets are extremely short term in nature, and existing commercial banks have not been able to fund long-term assets for clients. We see significant opportunity in this area, despite the difficulty in planning for the long term in Nigeria due to concerns regarding macroeconomic stability. We thrive on innovation, which is also the reason for our name NOVA, which means new. We are working on new ways to serve customers in the financial space by looking at new products and solutions to provide long-term financing for our clients across various sectors of the economy. As we deal with wholesale clients, we will work with offshore partners to provide such funding in addition to participation in risk sharing arrangements. The third area is investment banking, which has not been emphasized in Nigeria because many of the investment banking transactions are still done by offshore financial institutions. We intend to partner with certain major global financial institutions with the view of collaborating with them in such a way that we execute and distribute across various jurisdictions.
A large portion of investment banking transactions is still conducted offshore. Local institutions are not active participants. As an investment bank, we will bring in Nigerian and African diaspora with experience in handling these transactions. We can then collaborate with the offshore financial institutions in terms of distribution due to the size of each of these tickets. Second, many Nigerians who do some form of wealth planning do so offshore. We will collaborate with certain financial institutions to originate those transactions from Nigeria and invest locally.
We need improved confidentiality and stable exchange rates, as the fear of a significant devaluation is a major concern for investors due to the impact on the value of their assets. Without stability and confidentiality, there is no confidence in the system. Banks like NOVA help customers to understand that the returns here are several times what they can get in Europe, the US, and elsewhere.
We approach it from two perspectives: the lending facilities that we receive from offshore institutions that will enable us to lend up to 10 years without any problems and the various entities in Nigeria that have been dependent on bank lending. We will nurture and work with them to structure their balance sheets and bring them to the capital market to raise funds in terms of both equity and debt.
By nature, merchant banks deal with wholesale/corporate clients that have many financial needs, particularly with regard to structuring their balance sheets and the provision of advice. That is a major role that a merchant bank plays; a client might believe they require credit facilities while in fact they need a restructuring of their balance sheet by way of more vendor or supplier credit. A merchant bank sits down with clients and helps structure their books so they can achieve more in terms of balance sheet efficiency in addition to lowering their funding costs
2018 was our first full year of operations, and we were able to break even in 2017. There is a full range of products that we have not yet deployed that will come online in 2019. With our lean operations and efficiency focus, we aim to have the lowest cost-to-income ratio in the industry. We want to be the most efficient bank in Nigeria. 2019 will therefore be a great year as we continue to build a sustainable business with consistent growth from year to year without volatility in our earnings.
NIGERIA - Energy & Mining
Group Managing Director, Eraskorp Nigeria Limited
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