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Published On: Tue, Aug 16th, 2016

SUN TRUST BANK DEBUTS IN UNCERTAIN MARKET

Story by Okey Onyenweaku   |

SUN TRUST Bank, yesterday opened its doors for business to the public at its Lagos head office.

The bank’s management said it was operating a branchless financial institution which would employ special technology to provide unique services to its customers.

The ‘financial technology bank’, is not interested in erecting physical branches across the country, a departure from the traditional banking system in Nigeria.

personal_banking_slide-1170x470Speaking at the opening of the new bank, Muhammed Jubrin, SunTrust Bank’s CEO, said the vision of the management of the bank was to offer the best and qualitative retail and commercial banking services to many people in Nigeria and the world.

’’our vision is to offer high quality retail and commercial banking services to many people and businesses in Nigeria for whom access to a bank account has previously been impossible’’.

‘’We will offer telephone, mobile and internet banking underpinned by the traditional banking ethics of probity and integrity’’ he said

‘’Our services will be available to our customers 24 hours daily, seven days a week and anywhere in the world where there is a good internet service. Even our data centre is outsourced, this way we will not have the overbearing requirement to put on the generator at our locations’’.

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‘’we will not be emphasising physical security as we are making serious investment in cyber security instead, ‘’he said.

Also speaking at the event, President, Dangote group, Alhaji Aliko Dangote said floating a new bank in a depressed economy was the boldest step that anybody could take at an uncertain period in the history of Nigeria.

Dangote explained that lack of growth in the economy, decline in commodity prices and weak fundamentals were already having adverse effect on existing businesses for a new bank to emerge. He however, said that difficult times also offered great opportunities, the type that has encouraged the promoters of Sun Trust Bank.

But many industry observers believe that Sun Trust Bank must be daring to open its doors for business at a time when the traditional banks are struggling to survive the harsh macro-economic environment in the country.

Already some banks have been hit by liquidity challenges, capital adequacy and are low on other regulatory prudential ratios.

Analysts have argued that only the courageous can defy the prevailing stifling macro-economic environment where existing banks and managements are afraid to even expand their business.

David Adonri, Chief Executive of Highcap Securities Ltd, fears that any new financial institution that comes on board at this difficult times must be ready to adopt unusual measures to succeed or blame itself if it runs into murky waters.

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‘’Although it is a difficult time, but if they do not have enough capital, real capital and not bubble capital, to sustain their operations in the next six months or one year when the hard times clears, they may run into a hitch’’, said Adonri.

In the last 15 months, revenues have shrunk given the persistent fall in the price of crude from the peak of $114 in June 2014 to $32 before hovering between $45 and $50 per barrel.

These challenges, many believe, have taken a toll on the banking industry now faced with grave conditions such as illiquidity, capital adequacy challenge and high Non-performing loans.

Their view is that for a new bank to emerge at this hard times to strive to compete and succeed would be a tall order.

However, the Managing Director of Sun Trust Bank said the bank has already factored in the economic recession and is prepared to pursue its banking business with success.

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