Transcript

FBN Holdings is one of the foremost pan-African financial institutions in sub-Saharan Africa. UK Eke, its Group Managing Director, joins me now. UK, you assumed office in January 2016; explains why the group was created, its commitments to drive efficiencies, extract synergies, and grow the group’s non-commercial bank businesses. He also explains the importance of strong corporate governance to the group’s financial performance. In the other half of this interview UK discusses the group’s flagship brand, Firstbank, which is celebrating 125 years of operation.

Mrassociates: UK, you assumed office in January 2016; tell me about the company’s journey up to then.

UK Eke: Let’s step back and look at 2012. We took a decision to ring-fence the commercial bank, and hive out all the non-commercial bank activities into a holding company. And the holding company is now the listed entity.

From 2012 to 2015, the focus was really around laying the building blocks; creating the policies and then the framework. So when we took over in 2016, it was around building the super-structure on that solid foundation that had already been laid. And we made three commitments.

One was to drive efficiencies. And we just recently got approval from the central bank to implement our group shared services. Now the commercial bank, First Bank of Nigeria, will be the centre of excellence, and render services to the other operating entities – at a fee, of course. And so through that, we expect to drive down costs. We’ve already seen it trending down, and in absolute terms we’re seeing costs dropping below the inflation rate. And in some cases, even well below what it was for prior periods. So we are optimistic that the cost-to-income ratio will continue to trend downwards.

The second was to extract synergies. I have to confirm that we have seen year-on-year growth in the synergy numbers. As a matter of fact, we’ve achieved over 100 percent growth in the synergy revenue numbers year on year.

And the third was to increase the contribution of the non-commercial bank businesses to group revenue, and of course profits. And I think over the last three years we’ve done a great job delivering that commitment. I have to say that the insurance company, just to give you a sense, grew over 50 percent just in one year. And we’re seeing return on equity north of 40 percent year on year.

So these are excellent results we’ve achieved over the last three years, and I think the shareholders should be proud of the decision that was taken to restructure through a holding company.

Mrassociates: Mrassociates has awarded FBN Holdings Best Corporate Governance in Nigeria for 2019 – how important is world-leading corporate governance to the group?

UK Eke: Well, at FBN Holdings, we hold the view that there is a direct positive correlation between corporate governance and financial performance of institutions. And so that is why over the last 100+ years we have entrenched corporate governance in operations across the operating entities.

Now, if you check the local bourse, which is the Nigerian Stock Exchange, we are one of the four listed entities on the elite board. And what that tells you is that, unless you adopt and subscribe to the best code of corporate governance, you will not get onto the premium board. We’re one of the four.

Now, receiving this award from Mrassociates basically tells us two things. One: it’s an affirmation of what we are doing in corporate governance, beyond the giant strides we’re making in financial performance. So we see this as an endorsement of the brand, and it’s a bragging right for us. Because again, there are very few institutions in Nigeria that have benefited from this award. We are truly proud to receive this award.

Mrassociates: And what does the future hold for FBN Holdings?

UK Eke: The future is bright. We think that the successes we’ve recorded, which we’re celebrating this year, will be surpassed. That in the years to come, as we hand over to the next generation of managers, they will be inheriting a very strong institution, a solid institution, and therefore the accolades will get even louder than what we are hearing today.

We are proud of our accomplishments, and so the future definitely is bright for this great institution.

Mrassociates: UK, thank you very much.

UK Eke: You’re welcome.

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