Heritage Bank and the Price of Success

Ifie Sekibo, an alumnus of the renowned Harvard Business School and Managing Director of Heritage Bank PLC, must be asking himself what the price of success actually is.

A professional with a proven track record in turn-around management, Sekibo has made a career mobilising strategic investments and capital injection into moribund companies to resuscitate and put them on the path of sustained profitability.

In 2003, he led a team which acquired Global Assurance Company Limited, previously under the technical management of the National Insurance Commission, and steered the new company- International Energy Insurance (IEI)-into a frontline Insurance Company in Nigeria.

Again in 2009, he led a team which engineered a transformation of the defunct Societe Generale Bank into what is today Nigeria’s innovative commercial bank-the Heritage Bank Ltd. He also led a successful acquisition of Enterprise Bank Ltd from the Asset Management Corporation of Nigeria, after Heritage Bank paid N56.1 billion ($340 million).

The acquisition created a bigger, better and stronger Heritage Bank Ltd. The acquisition followed rigorous regulatory approval processes leading to the dissolution of the erstwhile Institutions comprising HBCL & EBL to birth the New Bank. The bank currently has over 200 branches spread across the country.

The bank reported a pre-tax profit of N1.49 billion for the full year ended December 31, 2015. Its gross earnings reached N24.17 billion last year while total assets stood at N483.42 billion.

He has turned Heritage bank into Nigeria’s premier innovative money deposit bank, and today one of the country’s foremost banks leading government’s economic diversification agenda. Unlike some of the country’s commercial banks,

Heritage has extended loans to several entrepreneurs in the Small, Medium Enterprises category, especially those in the agricultural value chain business.

The bank’s support for this sector, according to Fela Ibidapo, Group Head, Corporate Communications of Heritage Bank, is to help stimulate employment and contribute to the non-oil Gross Domestic Product (GDP) as well as address the challenge of youth restiveness.

Some of these have not gone unnoticed, especially by the Central Bank of Nigeria,CBN, which had chosen Heritage as a partner for the disbursement of a N3 billion Youth Innovative Entrepreneurship Development Programme (YIEDP). Heritage Bank has taken the initiative of empowering youths to become entrepreneurs, in efforts to create jobs and distribute wealth across the economy.

Already, the first batch of the 310 successful businesses, expected to benefit from N774 million as part of the N3 billion earmarked under the YIEDP, have been approved by the CBN. The programme enjoys the active participation of the National Youth Service Corps, while Heritage Bank is the sole financial institution and vehicle for the disbursement of funds to approved beneficiaries.

Heritage Bank Plc is also partnering with stakeholders in the education sector to advance education in the country. Last month it scored a first again when it sponsored a one-day Joint Admissions and Matriculations Board Seminar for Ifako-Ijaiye students in Lagos.

The one day seminar, organised in conjunction with a representative of the district in the House of Representatives, was to educate the audience about the techniques required to scale the JAMB 2017 calendar hurdle in aspiration for admission into tertiary institutions in the country. The seminar had about 20 schools represented, with an average of at least 1,500 students from the two local governments comprising of both government and private schools.

More gratifying perhaps, to the shareholders and customers of Heritage Bank is the fact that its operations have always been in strict compliance with extant laws and established banking principles. The same cannot be said of some of the commercial banks in the country. It was not surprising that Heritage Bank was not among Deposit Money Banks barred by the CBN from dealing in the Small and Medium Enterprises, SME, wholesale Forex Window. Only eight banks were not barred, and Heritage was one of them.

The CBN had frowned at the action of banks that declined to sell foreign exchange to SMEs to enable them import eligible finished and semi-finished items despite the availability of forex from the CBN wholesale intervention window.

This streak of successes is coming at a price, perhaps a stiff one at that. There have been several unfounded speculations around the bank in recent times that one begins to wonder whether there exist some forces bent on pulling it down by all means. These forces have used sustained negative attacks on the bank through a section of the media in what appeared to be desperate attempts to de-market the bank.

Half-truths and outright lies attributed to unnamed sources have been published, especially by a particular online newspaper, that you begin to wonder what the end game is. There was a company which sued the bank, asking the court to declare the bank insolvent. Yet the company claimed to be a customer of the bank! Pray, what customer would want his bank to collapse?

There were also stories about a director of the bank who allegedly authorised loans that were said to have become “bad”. The outlet went as far as claiming that the director in question had been suspended by the bank. The bank immediately came out to refute the allegation, saying that the news outlet must be referring to an imaginary director of the bank.

So worried must have been the management of the bank that it decided to set the record straight in a statement. Part of the statement said all financial institutions have credit policies governing its processes and management designed and enforced by regulatory agencies to ensure efficiency and effectiveness in the entire credit chain.

“But above all, Heritage Bank like all other banks in Nigeria are under the strict supervision of the Central Bank of Nigeria,” the bank said. It was a clincher to show the hollowness of the claim. Nobody who operates in the country’s financial system would take such reports seriously, considering the crass ignorance about regulatory frameworks governing banking operations in the country. But the bank did well to dispel such malicious rumours and wild speculations in the interest of its teeming customers.

–James Ume wrote in through james@channelkoos.com