Ahmed Kuru is the outgoing
managing director, Enterprise Bank Limited. In this interview, he
highlights his achievements at the bank during his three-year tenure.
NSE ANTHONY-UKO captured it for LEADERSHIP
The Asset Management Corporation of Nigeria (AMCON) recently announced the preferred and reserved bidders for Enterprise Bank Limited, bringing an end to the bridge status of the bank. How do you feel?
I am glad that the process has come this far and we now know who the winners, in terms of the preferred and reserve bidders, are. This is a clear indication that the end of this bridge phase of the bank is imminent.
At the same time I am also satisfied with the outcome because it means that we, the board and management of the bank, have been able to deliver on the assignment given to us by the AMCON within the shortest possible time. That assignment was to reposition the bank and make it a going concern such that it will be attractive to investors. Right from the beginning when we came on board, we knew our assignment was for a short period of time. As you know, our tenure was to last for two years and Enterprise Bank was born on August 11, 2011. What this means is that we ought to have signed out on August 2013.
However, the announcement of Heritage Bank Limited as the preferred bidder has brought that journey to a beautiful end. I am happy that the entire process went according to how the AMCON planned it.
What are the challenges you encountered during the sale process?
It will not be totally correct to say there were no challenges during the entire process. Yes, there were initial difficulties, but because they were anticipated we were able to successfully manage them in such a manner that our business was, more or less, not affected.
Essentially, the challenges had to do with the reaction of the general public, customers and staff when the divestment process was announced. From the very beginning, the AMCON made it very clear that the bank, by its bridge nature, will be sold to interested investors at a certain point. When the exercise was to begin, it announced and every step and processes involved – the appointment of financial and legal advisers, the call for Expression of Interests (EOIs) by bidders down to the announcement of the results were clarified.
The reaction from customers was different immediately the divestment exercise was announced. A little number of them wanted to withdraw their patronage till they were sure that all was well while signing on new transactions met with a bit of resistance. However, we deployed a number of marketing communication strategies that succeeded in reassuring customers that the divestment exercise will not affect their transactions. One of such was the organisation of customer forums where we fielded questions from the customers, explained and reassured them that the exercise was, indeed, meant to serve them better. There were other customer engagement strategies, including regular media briefings, targeted at different levels of the bank’s stakeholders. We also intensively engaged our customers on a one-on-one basis at various levels. Our staff were equally and adequately primed through internal communication, town hall meetings and other bonding initiative platforms to remain calm; focused and dedicated to their work in order to convey the right attitude in their interface with our esteemed customers.
All said, these combined strategies made every bit of the activities during the exercise open for the awareness of every stakeholder and prompt. It has not been easy. Like I said earlier, the industry is hostile to any form of uncertainty and the elongated nature of the process has not helped matters. But we thank God and our staff for all the support.
You always said that one of the principal objectives of your administration is to deliver a sound and healthy bank to the new owners/investors at the end of your tenure. Where are you on that promise?
We did a lot of serious work when we came on board which I believe will endure any brand that is playing in a difficult economy like ours. The situation we met on ground was very bad, which was why the AMCON intervened in the first place. The first thing we did was to initiate a very strong corporate governance structure. The bank had a 16-member board of directors, made up of five executive directors in addition to the managing director and 10 non-executive directors.
We operated with very credible people at this level whose experience spanned banking, insurance, academia and public administration. The combination ensured the institution of a very strong corporate governance structure to avoid any abuse of process which for me was the strength of the institution. We insisted that there must be strong operational policies. In all we did, we made sure proper due process was followed.
The bank was not profitable at the time we assumed duties. Today, we have returned the bank to sustainable profitability. After the initial 5-month loss recorded in 2011, the bank has been making profit annually since 2012. We were able to grow the balance sheet by about 36 per cent over the years. Even with the introduction of the policy of 75 per cent Credit Reserve Ratio (CRR) for public funds by the Central Bank which led to the relinquishing of such funds from our system, we still have been able to grow deposits by over 30 per cent since we took over. Our asset quality has improved greatly, leading to the significant reduction of non-performing loans (NPLs).
The bank has been rebranded and is more recognisable in the league of banks. We have been able to give the institution a new corporate look and feel. Our branches and other touch points wear new look that cannot but be noticed by the man on the street. All our customers’ touch points and service platforms have been upgraded for better service delivery. We made huge investments in upgrading our channels and technology to meet the demands of modern day banking. We have continued to ensure that our customers enjoy convenient and stress free banking as our staff have been retooled and reoriented to better align with the vision and values of the bank.
We recognise that our staff are the most important asset that we have and we have invested in their up-skilling and cultural renewal to enable them competently deliver the service objectives of the bank. Their welfare has also been of importance to us to the that extent we have ensured that their total welfare package is competitive. Unlike what it was before now, the bank now attracts very good staff from the industry.
So as to your question with regards to whether we came close to the promise we made to hand over a sound financial institution to the new owners, I will say yes, we did. We have not destroyed value; as a matter of fact, we are leaving the bank with our heads held quite high.
After three years at the driver’s seat as the managing director/chief executive officer of the bank, are there things you would have done differently in the same circumstances?
Looking back retrospectively, I tell you that we were calculative with every decision we took for the overall good of the bank. We came on board as change managers but under a different arrangement. The whole essence of the intervention/investment in the first instance was to safeguard staff employment, guarantee depositor funds and ensure business continuity.
It was a tricky balancing act. We started with a highly demoralised workforce who had seen five managements within a space of six to seven years. It was like a 15-year “start-up” business. We were retooling and at the same time competing. It was like joining a race with your hands tied to your back. We had to deal with the unconventional way by beginning to untie our hands, all in keeping faith with the government contract with the public. We are pleased that we delivered on the government promise of preserving value.
Also to change the direction of the bank and at the same time deal with the issue of rebranding the bank in an industry that is hostile to mediocrity was a big challenge. One of the areas one should pay attention to in our industry is the cost structure. Again, unfortunately, we had to deal with the need to invest in technology, human capital and rebranding in a situation where you are not making money.
Another tricky balancing act was on how to watch your cost to income ratio. Therefore, we hit the ground running, excessively pushing our people, and the fact that we were in the market did not help matters.
Culled Leadership Newspapers
The Asset Management Corporation of Nigeria (AMCON) recently announced the preferred and reserved bidders for Enterprise Bank Limited, bringing an end to the bridge status of the bank. How do you feel?
I am glad that the process has come this far and we now know who the winners, in terms of the preferred and reserve bidders, are. This is a clear indication that the end of this bridge phase of the bank is imminent.
At the same time I am also satisfied with the outcome because it means that we, the board and management of the bank, have been able to deliver on the assignment given to us by the AMCON within the shortest possible time. That assignment was to reposition the bank and make it a going concern such that it will be attractive to investors. Right from the beginning when we came on board, we knew our assignment was for a short period of time. As you know, our tenure was to last for two years and Enterprise Bank was born on August 11, 2011. What this means is that we ought to have signed out on August 2013.
However, the announcement of Heritage Bank Limited as the preferred bidder has brought that journey to a beautiful end. I am happy that the entire process went according to how the AMCON planned it.
What are the challenges you encountered during the sale process?
It will not be totally correct to say there were no challenges during the entire process. Yes, there were initial difficulties, but because they were anticipated we were able to successfully manage them in such a manner that our business was, more or less, not affected.
Essentially, the challenges had to do with the reaction of the general public, customers and staff when the divestment process was announced. From the very beginning, the AMCON made it very clear that the bank, by its bridge nature, will be sold to interested investors at a certain point. When the exercise was to begin, it announced and every step and processes involved – the appointment of financial and legal advisers, the call for Expression of Interests (EOIs) by bidders down to the announcement of the results were clarified.
The reaction from customers was different immediately the divestment exercise was announced. A little number of them wanted to withdraw their patronage till they were sure that all was well while signing on new transactions met with a bit of resistance. However, we deployed a number of marketing communication strategies that succeeded in reassuring customers that the divestment exercise will not affect their transactions. One of such was the organisation of customer forums where we fielded questions from the customers, explained and reassured them that the exercise was, indeed, meant to serve them better. There were other customer engagement strategies, including regular media briefings, targeted at different levels of the bank’s stakeholders. We also intensively engaged our customers on a one-on-one basis at various levels. Our staff were equally and adequately primed through internal communication, town hall meetings and other bonding initiative platforms to remain calm; focused and dedicated to their work in order to convey the right attitude in their interface with our esteemed customers.
All said, these combined strategies made every bit of the activities during the exercise open for the awareness of every stakeholder and prompt. It has not been easy. Like I said earlier, the industry is hostile to any form of uncertainty and the elongated nature of the process has not helped matters. But we thank God and our staff for all the support.
You always said that one of the principal objectives of your administration is to deliver a sound and healthy bank to the new owners/investors at the end of your tenure. Where are you on that promise?
We did a lot of serious work when we came on board which I believe will endure any brand that is playing in a difficult economy like ours. The situation we met on ground was very bad, which was why the AMCON intervened in the first place. The first thing we did was to initiate a very strong corporate governance structure. The bank had a 16-member board of directors, made up of five executive directors in addition to the managing director and 10 non-executive directors.
We operated with very credible people at this level whose experience spanned banking, insurance, academia and public administration. The combination ensured the institution of a very strong corporate governance structure to avoid any abuse of process which for me was the strength of the institution. We insisted that there must be strong operational policies. In all we did, we made sure proper due process was followed.
The bank was not profitable at the time we assumed duties. Today, we have returned the bank to sustainable profitability. After the initial 5-month loss recorded in 2011, the bank has been making profit annually since 2012. We were able to grow the balance sheet by about 36 per cent over the years. Even with the introduction of the policy of 75 per cent Credit Reserve Ratio (CRR) for public funds by the Central Bank which led to the relinquishing of such funds from our system, we still have been able to grow deposits by over 30 per cent since we took over. Our asset quality has improved greatly, leading to the significant reduction of non-performing loans (NPLs).
The bank has been rebranded and is more recognisable in the league of banks. We have been able to give the institution a new corporate look and feel. Our branches and other touch points wear new look that cannot but be noticed by the man on the street. All our customers’ touch points and service platforms have been upgraded for better service delivery. We made huge investments in upgrading our channels and technology to meet the demands of modern day banking. We have continued to ensure that our customers enjoy convenient and stress free banking as our staff have been retooled and reoriented to better align with the vision and values of the bank.
We recognise that our staff are the most important asset that we have and we have invested in their up-skilling and cultural renewal to enable them competently deliver the service objectives of the bank. Their welfare has also been of importance to us to the that extent we have ensured that their total welfare package is competitive. Unlike what it was before now, the bank now attracts very good staff from the industry.
So as to your question with regards to whether we came close to the promise we made to hand over a sound financial institution to the new owners, I will say yes, we did. We have not destroyed value; as a matter of fact, we are leaving the bank with our heads held quite high.
After three years at the driver’s seat as the managing director/chief executive officer of the bank, are there things you would have done differently in the same circumstances?
Looking back retrospectively, I tell you that we were calculative with every decision we took for the overall good of the bank. We came on board as change managers but under a different arrangement. The whole essence of the intervention/investment in the first instance was to safeguard staff employment, guarantee depositor funds and ensure business continuity.
It was a tricky balancing act. We started with a highly demoralised workforce who had seen five managements within a space of six to seven years. It was like a 15-year “start-up” business. We were retooling and at the same time competing. It was like joining a race with your hands tied to your back. We had to deal with the unconventional way by beginning to untie our hands, all in keeping faith with the government contract with the public. We are pleased that we delivered on the government promise of preserving value.
Also to change the direction of the bank and at the same time deal with the issue of rebranding the bank in an industry that is hostile to mediocrity was a big challenge. One of the areas one should pay attention to in our industry is the cost structure. Again, unfortunately, we had to deal with the need to invest in technology, human capital and rebranding in a situation where you are not making money.
Another tricky balancing act was on how to watch your cost to income ratio. Therefore, we hit the ground running, excessively pushing our people, and the fact that we were in the market did not help matters.
Culled Leadership Newspapers
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