By NBF News
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At about this time last year, our Bank underwent a change process at its helm, when Dr. Oba Otudeko (OFR) succeeded Alhaji (Dr.) Umaru Abdul Mutallab (CON) as Chairman of the Bank. Both men have played, and continue to play larger-than-life roles in the development of the great institution that FirstBank has become. In the event, Dr. Oba Otudeko's one-year stint as Chairman turned out to be epochal in many respects. His inaugural address to this board has become one of the most referenced documents in Nigeria, in respect of the design and elaboration of a coherent leadership vision.

Over the last twelve months, we all have been privileged to see that vision take on a life of its own; and the transformation that has been wrought in the Bank as a result have been outstanding.

After the crisis signalled by the Central Bank of Nigeria's (CBN) August 2009 special audit of banks in the country, the industry began to trend up late last year, as the Asset Management Company of Nigeria (AMCON) began the process of cleaning up the industry's non-performing loan portfolio. However, full recovery in the industry will depend on how far the market for domestic credit grows. As government remains committed to ensuring that the economy is on course, I expect to see renewed regulatory concern about the elevated levels of public sector borrowing. This in turn should lead to improved lending to the private sector over the medium-term. The main measure of success of these reforms will be in the degree to which they reduce the domestic cost of doing business.

For us in FirstBank, the changing policy environment will continue to represent our main source of challenge. Accordingly, our ability to rapidly grow its credit portfolio will depend on the impact of the apex bank's macroprudential policies on our operations. My initial thoughts on this are that as the CBN focuses more on the maintenance of the stability of the financial system as a whole, it will begin to deploy a lot more policy instruments along with its traditional use of interest rate movements. We have already seen a toughening of loan-loss provisioning covenants in response to the build-up of systemic risks over the last couple of years. However, going forward, as concerns over financial stability over the business cycle drive increased cooperation amongst the diverse regulatory authorities in the financial services industry, further tightening of loan to value ratios, and reserve requirements might be implemented as we see a transition from a focus on individual financial institutions to a focus on the whole industry.

The challenges of this policy trajectory are clear. If we are to remain competitive, we must begin to design and deploy mechanisms that allow us to anticipate the next curve down the regulatory road, and thereafter, to position the Bank to take advantage of any such developments.

Developments project
As I indicated earlier, one of the defining features of the last one year has been the speed with which our Bank has progressed on the corporate transformation road, on the back of the visionary leadership of my immediate predecessor. The main landmarks along this road include the implementation of the new structure, process review and automation, and decentralisation of the cash management system. We have begun to reap the rich rewards of these different initiatives. Nonetheless, it is important to note that these initiatives strengthen our capacity to intervene in our operating space, just as new opportunities are presented to us by the changed operating environment. Significantly, we are already exploring domestic opportunities for inorganic growth, which have since opened with the apex bank's efforts to reform and repair the banking sector. At the continental level, stronger economic performance by emerging market economies on the continent also present us with a huge chance to grow our African footprint.

These two opportunities will provide the conceptual background to my Chairmanship of the Bank.

Providing continuity for a change platform
Within this conceptual framework, my emphasis will be on maintaining stability on the Board, in order to make rapid progress on the vision enunciated by my predecessors. Just to remind us, the main planks of our policy thrust in the last twelve months have been:

Anchoring our operations around quality service delivery;

Putting people at the heart of our operations;
Building a first class pan-African financial services institution; and

Commitment to a strong ethical base
As we successfully implement the structural and systems changes required to run these initiatives, it is increasingly obvious that no matter how good the process design is and no matter how sophisticated the deployment process, without adequate attention to the people dimension, our chances of success diminish considerably.

We are therefore committed over the near- to medium-term to the Bank's management of three main relationships:

With Staff
The emphasis of our ongoing structural changes to the Bank's operations has been to increase our degree of responsiveness to changing customer needs. Two aspects of this dynamic are crucial. The first is to put in place a modular structure that allows the Bank change as its customers' tastes change, indeed one that allows us anticipate these transitions. While the second is the implementation along with this flexibility, of a front-office structure designed to enhance both time-to-market of new products/services, and responsiveness to market needs.

All of these require for their success, a cadre of staff that is proud to own every stage of our operations. In our quest to create internal entrepreneurs ('intrapreneurs') we have begun a transformation of our people management processes, including designing an improved compensation package. The goal of this is to engender a sense of belonging in our staff that results in a sea change in their perception of the Bank. Accordingly, the Bank ceases to be a workplace, with all the negative attributes associated with this, and instead becomes a partner, from whom much is derived, only because we add a lot to it.

My message to all staff therefore is this: 'This is your Bank. You are a vital part of this great establishment that is already the clear industry leader in Nigeria. We know that you possess the skills and you are imbibing the right mindset, and together we can achieve our aim of making FirstBank the bank of first choice.' Success is, ultimately, the sum total of the little parts that everybody plays in the organisation, and by helping the Bank, we all invariably do ourselves an immense favour.

With Customers
In recognition of the key roles relationship management contributes to service-based organisations such as ours, the Bank should aim to broaden and deepen relationships with its clients, by increasing the platforms of interaction. In particular, we should aim for the institutionalisation of forums that permit exchanges between the Bank's top management, and the leaderships of those organisations that we are in business relationships with. The gains from this are obvious. They would give the Bank an intuitive understanding of the financial services needs of our customers, and simultaneously compliment the activities of our relationship management teams.

With the Policymakers in the Macroeconomy
I have already argued for the Bank to develop a proactive capacity vis-à-vis macroeconomic policy trajectory. However, the requirement for the diverse relationships between us and government on one hand, and us and our regulators on the other differs in a subtler way than I have enunciated previously.

Stronger compliance, best practice corporate governance, and heightened stakeholder awareness are essential components if we are to remain on the positive side of both government and industry regulators. After all it has been proven from recent industry experience that the stronger a bank, the greater the benefits it can derive from strong regulatory measures. In essence, these reforms provide a veritable platform from which we can serve our customers better; and what is good for our customers can only be good for our Bank and the larger economy.

That said, this focus on the soft side of our business is not complete without a re-appraisal of our corporate social responsibility (CSR) initiatives. In the light of the rapid changes in our social environment, and given the general expectation that these changes will remain a permanent feature of the operating landscape, we must constantly restructure our CSR initiatives so that they reinforce the general themes that we have committed ourselves.

Enhancing Shareholders Value
Most often we assess shareholder value in terms of financial performance, especially the impact on stock market figures of the quarterly earning numbers. However, from the shareholders' perspective, the main consideration is knowing that the money invested in our Bank's shares earns higher returns than from any other investments. The key difference here is in our ability to extract value from every facet of our operations.

Finally, I recognise that my assumption of the office of Chairman of our distinguished bank is coming at a very exciting time in the annals of our nation. The fact that we are in an election year has had its negatives though. A couple of analysts have moved country risk estimates up on account of heightened levels of uncertainty over the outcome of the polls.

Thankfully, it all has been so good thus far. We are clearly on course. Indeed, most sceptics fail to account for the fact that to date, we have had 12 years of uninterrupted elected civilian rule in this country, the first such period since independence. We expect that this will only get better, since as a Bank, we have thrived well in peaceful and stable socio-political conditions.

The success of my vision for the Bank depends on the cooperation and unalloyed support of all staff, and our determination to make