*Yes, Nigerian banks have leapfrogged
*The lessons I am learning from Alex Ferguson
By Emmanuel Aziken, Babajide Komolafe, Nkiruka Nnorom, Chinedu Ibeabuchi & William Jimoh
Mr. Aigboje Aig-Imoukhuede, 46, is unarguably one of the
major persons that have recast the face of banking in the country.
Though originally trained as a lawyer, Mr. Aig-Imoukhuede has never
really been known to have donned the lawyer’s robe, having taken to
banking from his National Youth Service Corps days in 1986. His entry
into the industry, remarkably, was at the point of the introduction of
the Structural Adjustment Programme, which in its wake, roused a once
lethargic industry into competitive edge. Following his experience of
once being left behind at an airport tarmac as a teenager, Mr.
Aig-Imoukhuede vowed never again to be a laggard and to take advantage
of the opportunities and threats that trailed the opening of the banking
industry. He has so far survived all the conflicts and contractions of
the industry and positioned a one-time small bank into the top of the
industry. After about 12 years of steering the ship at Access Bank,
Aig-Imoukhuede would be retiring as Managing Director and Chief
Executive of the bank at the end of the year. Before his stint at Access
Bank, Aig-Imoukhuede was an executive director of Guaranty Trust Bank
and before then, was at Prime Merchant Bank and Continental Merchant
Bank. His success was the basis of his appointment into a number of
public positions including membership of the administration’s Economic
Management Team and chairmanship of the Federal Government’s panel on
the verification of subsidy payments. He is also Chairman of the Board
of Trustees of the Financial Market Dealers Association and a foundation
Board member of the African Finance Corporation, AFC. He is also
Chairman, Access Bank UK Ltd, Chairman, Associated Discount House Ltd;
Chairman, WAPIC Insurance Plc; and board member, Commonwealth Business
Coalition. Mr. Aig-Imoukhuede who is first runner up, Vanguard
Personality of the Year, 2012, holds the national honour of Commander of
the Order of the Niger, CON. He is married with children.
WHAT was your career path like after you left the University of Benin?
I left Uniben in 1986. My first job was in a bank as a Youth Corper, in
Continental Merchant Bank, former CMB. I worked in the Legal Department,
and what I found in the bank as a lawyer was that many lawyers in the
bank saw their jobs as just that of compliance. This is what the law
says, and therefore, you cannot do this, unless you rigidly follow what
the law said. I found myself enabling people to do transactions, so it
is not don’t break the law or anything like that, but if you do your
transactions in this way, the law will support you. I, therefore, found
out that more and more, the core bankers were gravitating to me for
advice, even at the very senior level, which I gave freely.
Maybe, I got noticed that way, and it was way that my future bosses
in Continental, I guess, saw something in me. Again, I went to a bank
called Prime Merchant Bank. The good thing that Prime Merchant Bank did
for me was that it allowed me see that banking or running a company
wasn’t just about putting together a star studded team, because the
management team and employees in Prime Merchant Bank were first class.
And then, I went to Guaranty Trust Bank in 1991. It was year 2000 or
thereabout that I was appointed an executive director. So, it took me
fourteen years from graduation to become an executive director of a
bank, and in 2002, I was appointed MD of Access Bank. So, that’s a bit
longer than sixteen years. So I paid my dues now..(general laughter)
Did you choose banking or was it banking that chose you?
What I did know was that growing up, I tended to think ahead a lot, and I
grew up in the home of civil servants. I didn’t know many people in
business or even who worked for companies other than maybe in the 70s,
then my uncle was very senior in NTC and Felix Ohiwerei was in NBL.
Other than that, I didn’t know businessmen, I didn’t know entrepreneurs;
I didn’t grow up knowing any. I didn’t know businessmen. So I didn’t
even understand the concept of business. But then as I watched the
nation massacre its civil service, I saw what they did to civil servants
and the committed people who worked and didn’t steal and were
contented. People who could, based on the civil service career send
their children to very good schools in the past; I am talking about late
60s and early 70s and all of a sudden, were now struggling to do so.
So I said to myself that I won’t work as a civil servant. By the time
I was sixteen, seventeen, I saw ambassadors, and I didn’t like what I
saw. I thought this wasn’t right. Anyway, I made that choice that I
wasn’t going into the civil service and this wasn’t going to happen to
me. So, since I didn’t know how to be a business man, I said to myself,
by the time I was thirty-five, I said I wanted to be an executive
director in a multinational. That’s what I wanted to be. I was clear
that I wanted to be in NTC or Unilever as an executive director. That
was my position then.
What factors would you say influenced you into what you are today?
I believe that God gives people different gifts; different talents and
you pray that you recognise these and you are able to improve upon them
and work them to the best of your ability. One thing that my colleagues
or people who know me well, people who work closely with me believe is
that they say that I can see very far. I can see things that people
cannot see. So, it is just a gift. It is not that I can see into the
future; it’s nothing mystical. It is just that I am able to analyse a
set of scenarios and I can project into what the end result could be.
So, sometimes, when people see me do something and they say, ‘this is a
very gutsy move or it requires a lot of courage,’ it is not that I am
more courageous than they are.
How has the face of banking changed since 1986 when you first entered into industry?
Okay, when I got into banking, the context of banking was that you had
several banks…It was the beginning of proliferation of banking following
the SAP agenda of the Babangida government. To many people, it was an
employment vehicle to give people from your town an employment
opportunity. You then also had the former foreign banks that had been
indigenised. You had the government owned banks, and then you had one
bank that was an owner managed, an entrepreneurially driven structure
which was FCMB. As at that time, Nigeria banks were described as arm
chair banking. What then happened was that I got into banking when a
number of bank professionals who were assistant general managers and
above, who worked in the merchant banks of old; I am talking about
International Merchant Bank, NAL, had watched what Subomi Balogun had
done and wanted to model themselves after this unique owner manager
context that Subomi Balogun had pushed. They went into banking, and so
you have Atedo Peterside, closely followed by Fola Adeola, Jim Ovia and
Pascal Dozie. So, there was this fresh entrepreneurial instinct driving
these banks and they all competed based on service.
However, the regulatory context was not well developed; very
traditional Central Bank. At the time regulators were playing catch up
vis-a-viz the industry. So, you had a very traditional regulator; you
had very entrepreneurial bankers and you had a nation that was going
through serious economic structural challenges and these bankers had to
make money in the context of these challenges.
Despite the achievements, there is the continuing
perception that the banks have not been able to translate their growth
to boost the real sector of the economy?
I think that today in most countries, maybe except the Asian
countries, both in the developed and developing countries, there is this
perennial question, are banks playing the role they should be playing,
vis-à-vis the real economy? Even in the UK, you have initiatives like I
think there is something they call Funding for Lending, and in the US,
the question is being asked and off course when you come to places like
Ireland and Iceland, you will understand how deep that question is. So,
my point is that Nigeria is not the only place where the question is
being asked ‘are banks playing their role to support the real economy?’
Now, there are some peculiar macroeconomic realities that are at play
here. If you look at the real economy in Nigeria, you will define it as
definitely agriculture, manufacturing and I would say, oil and gas
upstream.
Let’s take agriculture. Nigeria was number one or two or three lead
producer and or exporter of at least three major cash crops in the world
in the sixties – oil palm, rubber and probably cocoa.
Mobilising deposits
If we held those positions I think we would probably earn as much
from these three cash crops in foreign exchange terms as we are earning
from oil. Now, is it banks that stopped the course of events?
Of course not. At a point in time when these products were doing so
well, it was on the back of these that the banks mobilized their
deposits, did their loans and prospered. Interestingly enough,
pre-independence and post-independence, the Nigerians who went abroad
and caught the fervour to be educated and came back to fight for
independence were financed to school with cocoa warrants or warehouse
warrants. It was like cash which you could go to a bank and cash and get
money. From the point of discovery of oil if you look at the percentage
of our spending as a nation that is devoted to agriculture as a
percentage of GDP, you can see it dropping and dropping.
Society champions
Beyond that, are farmers viewed with anything other than pity in
Nigeria? If you go to Ghana, Zambia and so on, the society champions
that are celebrated are farmers. Is it the banks that caused that? The
point that I am making is that the nation made certain choices and banks
operate within certain ecosystems and banks would move in line with the
dictates of that system. Now those choices that we made have made the
agric sector more and more risky even for the farmer. If you look at the
agricultural sector value chain it is an extremely risky value chain.
So, for a farmer or somebody in that sector, unless you have some
very strong comparative advantage or something very ingenious, there is
the likelihood that if you go in, you are going to lose your shirt. So,
if a bank lends to a farmer, it is likely that when the farmer loses his
shirt the bank is not going to get its loan back. Over time, this has
been reinforced and reinforced and reinforced and so you find that bank
lending to agric dropped to below one per cent of total lending.
Now, let me take oil and gas production. If you look at the
productive activities in the oil and gas sector, you find that the
drilling takes place here and the maintenance around the drilling like
food and provision of computers takes place here, aside from that what
takes place here? Nothing! The equipment is not made here, the ships are
not made here, the training is not done here, in fact, until recently
even the recruitment was external. So, in this case the oil and gas
production value chain was externalized outside the country, the banking
wasn’t done with local banks.
*Aigboje Aig-Imokhuede
Indigenous players
Now, changes are coming and it is no wonder that local banks have had
to force their way in and even in doing so, what we are starting with
is the indigenous players. The truth of the matter is that for the
early indigenous players who got hydrocarbon license, they were not even
funded by local banks, they found their funding from outside.
How do you react to allegations that competition among
banks is driving staff crazy with many of them not having time for
family and socials? Was it like that when you joined the industry?
I believe that every sector of the Nigerian economy that will go
through its growth phase, the way the banking sector has gone through,
will go through exactly what has happened here. And indeed, that is the
frustration for somebody like me. Do bankers work much harder now than
they used to do? Yes, they do! Because the banks are much larger, the
products and the systems are much more sophisticated, the results are
much more sizeable and it’s been done in a very short frame of time. We
are leapfrogging.
Twenty years ago, all the banks in Nigeria were not as big as the
number four bank in South Africa. I mean all the banks in Nigeria at
that time! In 2012, the biggest bank in Nigeria is like half the size of
that number four bank. So, how do you think it happened? Every sector
goes through a curve. When it is growing and at its early growth phase,
it is going to take a lot. Today, the competition is more settled.
The problem in Nigeria is that it is only banking. If banking,
manufacturing, infrastructure were bubbling in the same way what do you
think will happen to the Nigerian economy?
Banking, the most successful sector
The reason why banking stands out is because it has been the most
successful sector. So, the question you should be asking is why can’t we
experience this at the same time in about five or six sectors? Then you
will see this nation operating at its full potential. It is a sacrifice
that must be made.
I asked the IMF CEO, Lagarde, ‘you have a family and that I see you
the way you work, what are your comments on balanced life’ and she said,
‘would she like to spend more time with her family? Yes. But is there a
sacrifice that has to be made? Yes.’ Then you make a choice. I will
like to spend more time with my family. But must the sacrifice be made
for Nigeria, either the banking industry or the telecoms sector to be
great? Yes. Would the Nigerian banking industry be the same in twenty
years? No, because the nature of competition would be different.
Greatness must come at a cost. We are building great banks in Nigeria
and it comes at a cost. Nigeria’s greatness will come at a cost.
What advantages did you bring or lessons from your career that helped you to leapfrog to the top of the industry?
First of all, I think I was fortunate. For whatever reason a lot of
the bosses that I worked with decided to invest heavily in my leadership
skill. They invested by either mentoring me, sending me on assignments
and exposing me very early. For most of the challenges I have come
across, I have either done case studies in either banking or other
industries as to how leaders of companies dealt with these issues or
actually have been taught. I used to ‘dread’ travelling with Fola
Adeola. If you travelled for two days every minute was a lesson,
literally drumming it into you, how would you do this? If you are in
this position what would you do and so on. So, I had very early exposure
to leadership issues.
The other thing is that I had been trained by my parents, that no
sweat, no gain. That you must have to work very hard if you want to get
results. There is a reality that if you want to beat the guy next door,
you have to read longer than him. It is the same thing that we do now. I
cannot say that we want to be more profitable than another bank and I
am working half as him!
The reason why we excelled as a nation in the past was that we were
clear about those consequences. Those consequences created the hurdles
that we know that we had to pass. So, if in a football tournament you
cheat to win the local league without your players knowing how to play
well, when you go to the continent and it emerges that Nigeria’s best
team was beaten 12 – 0, then you will start wondering what happened? And
this is what is happening! That is the issue.
You mentioned that you were influenced by a number of people. Would you describe these as role models?
You can call them role models from whom I think I learnt a lot, some
of them are alive, some of them are late. I have told you one, Fola
Adeola. Another is Alex Ferguson. I read about him.
So, you are a Man U fan?
Yes. But I was a fan of Alex Ferguson before I became a Man U fan. In
fact, I wonder when the coach changes what will happen as inevitably it
will change. But I am a fan of his man management, his approach to
leadership. I have read every book that have been written about him or
that he has written himself.
Significant impact
Somebody who has, more recently made a significant impact on me is
Lamido Sanusi. The strength of conviction that makes a man do the right
thing or do what he believes is the right thing even in the face of what
you can call overwhelming odd is something that I have learnt from him.
But do you also admire the man management of Chelsea owner, Roman Abrahamovich?
Abrahamovich? Abrahamovich is someone that is clearly very driven,
but is not very patient. Maybe with time, he would learn to be more
patient. Also, maybe with less money, he will be more patient. Maybe
people who have significant resources tend not to be very patient. I
don’t know.
When you were appointed as Managing Director did you foresee the kind of global economy crisis that happened in 2008/2009?
Not at the time it happened. However, did I ever see that Nigerian
banks could find themselves in this kind of situation? Yes. I did and I
wrote about it. Just that I never knew where it would come from. When I
moved into GTB in 1991 there were 130 banks, by 2008 there were 25
banks. So, by any stretch of imagination, you are looking at mortality
rate that is very high. So, different things have caused these
casualties.
Missing the plane at tarmac
So, did I expect this to happen? Yes, I did. The most important to me
is the institution I run or the institution I invested in will not be
one of them. I don’t know if you have heard of the Tarmac Story? It is
the story about my first year in secondary school coming back from
Kaduna for my first holiday, and I missed the plane. I was standing at
the tarmac when the plane took off. I was ten or eleven then. That was
when before you board Nigerian Airways, you had to fight your way in. I
tried fighting my way but only for the plane to take off. I cried. But
since then, I said I would never remain at the tarmac again. I shared
that story with many of my colleagues.
Your bank tried taking over Union Bank, but it didn’t work out.
There was no attempt to take over Union Bank. There was a discussion with the leadership of Union Bank.
You obviously wanted your bank to be big but you did not
want to wait to do it organically like some prefer, but take over other
banks?
I think that if you look at the capital market, the concept of
capital formation, all things being considered, capital should gravitate
to those who need them. At the point in time we came into Access Bank
in 2002, there were 89 banks, we were clear, very clear that at best not
more than 40 per cent of the 89 banks would survive. I didn’t know how
the shake-up would take place. The problem was that most other banks
didn’t see it that way. So, a small Access Bank, when we got in was
already struggling.
Now, the most interesting thing about this was that, the first signal
was when Joseph Sanusi said we were going to have settlement banks.
That was the first signal. From the minute he said so, our game plan
then was that we needed to rank among the top ten banks in this country,
in fact top seven, otherwise, that means that we would be left on the
tarmac.
Now from part of the discussions we were said to have had with Union
Bank, it was clear that the concept of merger and acquisition was still
at its early stage in Nigeria. Banks ego and fear of the unknown and so
on would not make people readily dispose themselves to this. So, in
2004, when we walked into a room, the then CBN Governor, Charles Soludo
said if you don’t have N25 billion capitalization base by certain date…
Other people were dazed and confused, but I sent a text to Herbert
(Deputy MD of Access Bank), I said Herbert, the CBN Governor has just
made an announcement that would make our dreams come through. Because it
meant that, merger and acquisition was no longer seen as an untasteful
thing, you have to do it. And that was why on the plane, when the
entire bank MDs were coming back, before the pronouncement, we had
already briefed HSBC to advise us on mergers and acquisition. Atedo
Peterside was on that plane and I told Atedo, I said look, you are going
to take us to the market and we would be the first to do merger and
acquisition. He said somebody had already done that (told him) and he
couldn’t bring two people out. I said ok, since you said someone has
already given you a mandate, I am going to be the second. This meeting
with Soludo was on July 4 and we came out in September. Do you know what
it takes to come out in September? And the next is history.
What is your assessment of the industry in 2012?
I think we have restored confidence in the banking system. And I think
the kudos should be given to the regulators and operators. We have shown
through the bankers committee that banks can be partners with
government and the real sector towards building a stronger economy. I
think that the bankers’ committee has become an extremely strong tool
for advocacy on how things should be done as far as the Nigerian economy
is concerned. I think there is a lot more co-operation and
collaboration among the banks. And I thing this primitive competition is
a thing of the past in this generation of bankers.
There is a cloud out there on how this small bank, called
Access Bank took over a big bank like Intercontinental Bank, given the
assertions that Access Bank was at that time indebted to
Intercontinental Bank. Can you please clear the cloud?
You know that Access Bank did not owe Intercontinental. If it was, it
would be in the books. You know that frankly speaking, up to January
last year, Access Bank was never a taker in the interbank market; we
were always a placer. Sometimes, we do favour to the bigger banks. We
have always been an extremely liquid bank. This is one of the things we
are extremely known for, is to be extremely liquid. This is one of our
‘paranoid’ philosophies. What was being alluded to then was that some
executives of Access Bank had interest in the companies that had loans
in Intercontinental Bank. And Intercontinental never lost a dime, as far
as I know, as those loans were some of the best in the books of
Intercontinental Bank. They never lost a dime, never forgave interest. I
think the more fundamental issue comes from the fact that in Nigeria,
mergers and acquisitions are not well understood.
Secondly, you know that the acquisition of Intercontinental Bank came
as a result of the fact that Intercontinental Bank was affected bank by
the financial crisis and the CBN had to intervene in various ways
through AMCON and some other means.
The issue is that at the point in time that Access Bank merged with
Intercontinental Bank, Access Bank in financial terms was bigger than
Intercontinental Bank. The issue was that Access Bank had 120 branches
while Intercontinental had 300 or 400 branches. But financially, a lot
of damage had been done to the balance sheet of the bank.
Aigboje Aig-Imokhuede
The reality is that at the point in time when we did our due
diligence for Intercontinental Bank, everybody ran. When we submitted
our bid, the CBN has this supervision process where a team is allotted
to each bank; our team called us and said, ‘the way you people are
thinking of this thing, are you people well?’ So everybody ran.
500 risk points in transaction
Nobody other than Access bank showed their interest. And until the
day we did the deal, up to the last minutes, we could have walked away.
Even our share price started to fall when the news came that we wanted
to acquire the bank. Most analysts felt it was a stupid thing; most of
them said we should not do it.
Has it turned out for the good of the bank?
Yes but we worked very hard. And I thank God because it was risky. There
were 500 risk points in the transaction and we had mitigants for each
one of them. And we had people in this bank responsible to make sure
that those risks do not crystalise.
What did you discover during your assignment in the fuel
subsidy payment verification committee that made a very strong impact on
you as a person?
You must have observed that the committee and I myself as the
chairman conducted ourselves with dignity and utmost discretion. So
public comments on the way we worked and so on are something that we
have avoided and we would continue to avoid. There were just two things
that we said, we said that look, we would be driven by the fear of God
and love of our country. We said that on those two things we would not
compromise under any circumstance. So those are the philosophies behind
the way we worked.
So we would be transparent in every respect, we would be fact driven
in every respect and we would follow best practices. Our committee
members laugh when people try to rewrite history because everything that
was done, every letter, every memo, every meeting, every minute,
everything was recorded, transcribed, and archived completely. Every
interaction with every agency, everybody, and everything is recorded
complete. And it is available, that is why we don’t need to join issues
with anybody. If you want to know what happened ask the relevant parties
and they will show you what happened.
The only thing is that we realised very early, as we began to see the
scale of what was happening, we did not even care who the people were,
we were just looking at companies and yes their principal officers
would be held accountable for the actions of their companies, but we
were looking at companies.
Documentation and processes
But it was clear to us that the individuals who have done this, what
was at stake in financial terms was frightening, and obviously what they
have also amassed was frightening, and that was why we even took
greater pains in terms of our documentation and processes, because it
was clear to us that some of them would try to use whatever resources
they have amassed overtime to try to lash out, or lash back at us.
So much so that you will be surprised that as far back as July, in
view of the concept of kidnapping, we took steps against that in July. I
am talking of family members not of us. So now, around October when
people started calling me, where is your family, your wife or children,
but they had left the country in August. You remember this thing of
seeing, but it was as a committee. I was fortunate that we saw it. So by
the time the threat started coming, the threat, came, if you don’t
think they come, of course they came, and they are still coming, they
come to even officers of the bank.
The most worrying thing is that, somebody used the phrase that just
got it, for some of the people who abused the system, ‘they are addicted
to it’, and you know when somebody is addicted to something… So my
worry is not even about their being addicted, but to take it away, to
stop them from doing it, that is what they are fighting. The issue is
that they want to continue. That is why sometimes I pity our country.
Because they are addicted to it, their idea is that this thing must
remain; we must continue to chop it.
You will be retiring end of next year, (2013) what is you post retirement plan?
Well I think there would be a lot of speculations, which is not strange,
as to what one does next. And you have different thoughts from
different quarters as to what I should be doing. Let me summarise those
thoughts as, when a banker typically retires there is either the thought
that you go and serve your country in the public service or you
continue in the private sector. It is either you leave banking
completely and become maybe a farmer, or something.
Like a priest?
I like the thought of it but it is the most challenging and I have to be
clear I am ready for it. I don’t know, but I have told you which one I
am most comfortable with, but if you ask me which one I would be doing
or which direction I would be headed come 2014, I can’t tell you.
So what legacy would you be leaving behind?
I think I want to have put in place the foundations of Africa’s most
respected bank or the world’s most respected African bank. That is what I
want to have put in place firmly- the world’s most respected African
bank.
Who is Aig? Can you describe yourself in one sentence?
A driven individual who fears God, loves his family and like to dominate his environment.
There is this assertion that you like to dominate your
environment. Is that why some people say you are arrogant? I am sure you
have heard such statements?
Yes, over the course of time but what tickles me is that if you ask
most people who come in contact with me, something that they say is
that, ‘It is because of your humble nature’.
I find it funny, in one minute I am arrogant, the next minute I am
humble, I don’t know. I am not arrogant; I definitely know I am not
arrogant. I know I am not the most patient person and I speak very
frankly. So in an environment where people are used to culturally
enveloping their feelings and emotions, when you see somebody speaking
frankly you might say it is because the person is arrogant but I am not
arrogant.
What would you say was the most unpleasant moment of your career?
Most unpleasant moment is probably when I was flown out of Nigeria in an
air ambulance. Yes, most people don’t know that. There was something
that an arm of government was being extremely bureaucratic about and
which I had to solve myself and it was at a point of heavy stress as I
was going through a medical process that was very challenging. I was not
meant to be moving around, or be fighting with people to approve
certain things.
I was not meant to be doing those things that I was doing, I remember
telling those people, “you people are killing me, you people are
killing me oh”.
Vanguard
Sen.
Jubril Aminu, on Tuesday described the Nigerian Governors' Forum as
strange and an instrument of oppressing the Federal Government and the
people.
