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How Fidelity Bank improves efficiency, expands market share

Fidelity Bank

By Motolani Osenni

Following over 30 years of an active banking carrier, Fidelity Bank Managing Director/CEO, Nnamdi Okonkwo, who retires on December 31, 2020, in a recent interactive session with Business Editors, speaks on factors that contributed to his achievements, his early life and how the bank has undergone a significant evolution of business culture, among many other salient issues.

Contrary to negative ratings by international rating agencies about Nigerian banks’ performance post-COVID-19, the results have been rather positive and outstanding. How were you and others able to change the outcome?

The banking industry I believe has been positively impacted by the fiscal and monetary actions taken by the Federal Government to accommodate the socio-economic impacts of the pandemic on the people and business landscape.

These include a forbearance programme, the easing of the monetary policy stance to promote a low-interest regime and the launch of the N2.3trillion stimulus package under the Economic Sustainability Plan (ESP).

These steps by government eased pressure on customers to effectively service loans held and thus reduce the risk of loan defaults across the Industry. In the case of Fidelity Bank, our proven capacity to monitor the business environment and identify risks, as well as growth opportunities proved invaluable.

In this regard, the bank had conducted various scenario assessments before Nigeria recorded its index case and identified business sectors expected to be impacted by the pandemic.

As a result, we were primed to quickly adapt our strategies for business continuity and market focus in time with government enforced lockdowns.

While it has not been a walk in the park, our focused delivery of an evolved business strategy is responsible for our positive performance this year.

Some banks have been alleged to rely solely on the CBN for funding in recent times. How will you describe the liquidity position of Fidelity Bank?

While I cannot presume to know the level of reliance some banks have on CBN funding, I can attest that that is not the case for Fidelity Bank.

Our nine months – 2020 results show an increase in our liquidity ratio to 35 per cent from 32 per cent in our audited H1-2020 results.

Our liquidity position remains strong, above the required regulatory threshold and we expect to maintain this in line with our historical stance.

What are the impact focus areas of your bank and how have they helped to impact on the bank’s performance over the years?

The bank has undergone a significant evolution of business culture over the past few years all towards improving operational efficiency and expanding market share.

Our principal ethos of customer first guided operational realignments and a comprehensive procedure review towards improving efficiency.

The bank’s technology drive and digital transformation initiative is however, the core platforms so far leveraged to achieve our short to medium-term business goals. On the operational end, automation and robotics have replaced manual and repetitive processes to cut down processing times and improve efficiency.

This has allowed us to expand our customer reach, without sacrificing our high quality of customer service.

The bank has also introduced several products and enhanced service features well suited to the needs of our ever-growing customer base.

Our digital offerings lead the industry in terms of innovative features with close to 90 per cent of our transactions now handled outside our brick and mortar branch network.

The result of the success of our adopted digital culture has been evident in the performance trend witnessed over the past few years and even sustained despite the impact of the pandemic.

Banks have been cutting costs through rationalisation of staff strength and pay cut in the wake of COVID-19 pandemic.

How is Fidelity Bank responding to this? Fidelity Bank has not been forced to take such actions since the advent of the pandemic largely due to our digital journey as highlighted earlier.

Our current reliance on digital platforms had already helped us improve our operational efficiency significantly over the past few years.

Our transition to remote work protocols under our business continuity plan were activated once the pandemic hit our shores and this has further helped us save costs. Case in point is the drop in our costto-income ratio to 66.3 per cent as of September 30, 2020 from 73.4 per cent as of December 31, 2020.

Fidelity Bank has been known for its sterling performances over the years. What should investors expect from the bank this year?

We expect to remain true to our premise as an institution that keeps its word despite the challenges faced particularly this year.

The fact that our strong operational and risk management structure proved capable during this period of heightened uncertainty is a testament to the institution.

Our performance so far this year has also matched guidance which is evidence of our ability to sustain our trajectory even as the year draws to a close. You have positioned Fidelity Bank as an impact investor over the years.

Can the bank sustain this trajectory in the long term, now that you are exiting the stage?

A resounding yes! Our performance as an institution has been as a result of a core evolution of our business culture built on a platform of upgraded operational structures.

Fidelity Bank is poised to advance on its growth trajectory as our business institutions have been built on fundamental principles which would outlive any individual.

Recently the bank announced changes in its board of directors which include the appointment of a new chairman, chief executive designate and other directors. What should investors expect from the new directors?

The recent appointment to the board are welltimed and a fundamental step in the execution of the bank’s corporate strategy.

The new leadership will maintain the pursuit of the corporate vision of business growth in line with shareholder expectations.

I believe investors should expect to witness more success from the bank at an even faster rate of growth.

We should see a significant enhancement in the core business structures of the bank which should translate to impressive performance growth down the line.

As you take a bow from the bank at the end of the year, what will be your parting word for the bank’s investors?

It has been the honour of my career to have been selected to undertake the stewardship of our great institution and I am humbled by the faith placed in me during this time.

The successes recorded were indeed a team effort which will continue as the new leadership selected from this team takes over the mantle.

I hereby make an earnest request that we maintain the same level of support to the new leadership and executives as they take up the responsibility to lead the bank to greater heights.

What will you say are your achievements as MD/ CEO of the bank? While I must once again note that all the successes of the bank under my stewardship were a team effort, there are a lot of points to be referenced as regards the improvements witnessed in the bank’s performance.

I would however, focus on our digital transformation initiative as the most impactful amongst during this period.

The initiative has touched every facet of our business from all back end activities to all product types and service features offered to customers.

Enhanced digital platforms have helped achieve quantum improvements in operational efficiency while providing a platform to handle the rise in customer size and transactions.

This however, does not diminish other successes such as our brand equity growth in the market, retail and SME market capture and profitability trend during this period. What are your plans; what next after retirement?

Is it goodbye to banking? I may not want to give away all the details of the immediate and long-term personal plans.

However, I intend to continue to remain fairly active in the financial services sector albeit in non-executive capacities.

This is to ensure the knowledge and experience gained during my career so far, remains accessible to the industry.

The corporate place is not somewhere you can exit with finality at the age of 56 because companies are looking for people with corporate experience.

Corporate governance has been taken to higher levels while responsibilities of directors have made it very critical that anyone who runs a company, especially publicly quoted ones, must be people who are deep in understanding of governance.

I won’t rule out being in the corporate environment, but in what capacity I don’t know. What role would you say mentorship played in your career and who are those that helped you to climb the ladder?

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Quite coincidental you asked this question because I am also the chairman of mentorship advisory committee of the Chartered Institute of Bankers of Nigeria (CIBN).

I do not know why they selected me, but maybe they know that mentorship has played a key role in getting me to where I am today.

I also use my experience to talk to people about the power of mentorship, especially at our training school.

Though, I was very familiar with mentorship and indeed, enjoying mentorship, it wasn’t until I went to a programme at Harvard that I started to realize the need to formalize and put a structure to mentorship.

To buttress this, let me share a story with you. I was meant to read medicine or become a soldier, but by providence, I entered university to read agricultural economics.

After the first year, I was to switch to medicine, but my department won’t release me. As fate will have it, I came across several people who read agricultural economics and were successful bankers.

One of them is Mr. Nebolisa Arah, who was a general manager in the defunct International Merchant Bank Limited at the time and later became the first chief executive officer of Fidelity Bank.

I was very impressed with them and decided to stay put and read agricultural economics because I figured that I could be successful as well with the course.

These persons were the earliest influences that I had in becoming a banker. As you can see, mentorship is not just classroom work but more of the influences of people you look up to.

Later in my work life, I attended a leadership development programme at Harvard and drawing on the experiences and exposure from that programme, I decided to approach Dr. Raymond Obieri whom I had admired and looked up to from afar, to be my mentor.

He was surprised at my choice of him because it wasn’t that we were close or formally acquainted at the time. He graciously agreed to mentor and advise me and he continues to do so till date.

So, my advice is that we should seek out people that we want to aspire to be like and have them mentor and advise us, no matter our levels and position in life.

Apart from Dr. Obieri, I have been influenced by a lot of others including Mr. Tony Elumelu, Mr. Fola Adeola, late Tayo Aderinokun and others too numerous to mention. Tell us about your early life?

I was born in Otukpo, Benue State and spent my early childhood there. I speak Idoma and my Igbo mother tongue very fluently.

My late parents were successful entrepreneurs and brought me and my siblings up with strict Christian and moral values.

I schooled at Army Children Primary School in Otukpo, Wesley High School also in Otukpo and the proceeded to the University of Benin.

Would you document some of your experiences for those coming behind you in the industry?

Yes, I would document my life experiences like Jack Welsh’s “Straight from the Gut.”

I will talk about what I learnt in leadership, not just telling my life’s story.

I will also want to use my corporate experience to teach people about leadership, failures, successes and lessons because, in this career, I think I have learnt a lot.

I will surely write a book.

About the author

Ihesiulo Grace

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