Caricature image of Mr. Segun Agbaje, CEO, GTBank

By OKEY ONYEWEAKU

A burst of expectations is in the air at the moment as regards what next is on the cards for the Nigerian and African financial landscape as the incumbent MD/CEO at GTBank Plc, Mr. Segun Agbaje prepares to transit into a new and potentially more daunting role going forward.

While there appears to be an anxious wait of sorts for the final conclusion of the leadership transition process that sources say is presently underway at the bank and which is expected to include the announcement, anytime soon, of a new Managing Director at GTBank, Business Hallmark has however gathered that the bigger icing on the cake is the inception of the brand new GTBank HoldCo that the outgoing MD/CEO of the bank itself would very likely be moving up to head.

These developments are coming on the heels of the current CEO of the bank successfully clocking ten years in the saddle, and in line with the Banks and Financial Institutions Act, BOFIA which stipulates a maximum ten year span for CEOs of banks in the country, now has to stand down.

However, and even beyond the BOFIA stipulation, the development is coinciding with the move of the bank to now operate under a new Holding Company, HoldCo structure, which opens up the door for a new leadership layer to be put in place, over and above the office and position of MD/CEO of GTBank.
Within the new structure, there is expected to come a higher leadership tier that the incoming MD/CEO of the bank would be reporting to, and feelers at the moment are that Mr. Agbaje is in strong contention to move up into that newly created position.

The Agbaje years: Crunching the numbers

Without any doubt, since being licensed in 1990 and commencing operations in February 1991, GTBank has left no one in any doubt that it surely means business.

Established on a foundation of excellence, professionalism and best practices, the Bank’s consistent delivery of innovative financial solutions and exceptional customer experiences has enabled it to record year on year growth in clientele base and key financial indices since inception. The Bank’s operation style, staff conduct and service delivery models are built on 8 core principles; Simplicity, Professionalism, Service, Friendliness, Excellence, Trustworthiness, Social Responsibility and Innovation. These Principles are known as The Orange Rules which reflects the Bank’s vibrant Orange corporate colour.
By 2011 when Agbaje came in as CEO, GTBank’s performance metrics in the area of Total Assets was N1.608trn. By 2016, this had moved to N3,116,393,439 trillion in 2016, further on to N3.758trn at the close of the 2019 trading year, and then an even more impressive N4,944,653,293 trillion in 2020.

There was also an upswing in the Profit Before Tax showing as the bank moved from its 2011 figure of N62.080bn to N165,136,461 billion in 2016 and on to a significantly much higher figure of N238,095,070 billion in 2020.
Similarly, the records equally show that the bank was able to keep faith with investors as its Earnings Per Share rose from 4.67 to 7.11 between 2016 and 2020.

Like vintage wine that gets older with age, indeed, the figures for the bank’s showing across the past five years have indeed been a pointer to the fact that the bank under Agbaje has continued to maintain its upswing and that the Agbaje years have indeed been quite rewarding and bountiful, overall.

Reactions

As he prepares to leave the first-line charge position at the bank, the consensus of opinion is that the Agbaje years have indeed been reasonably bountiful.

For example, the financial czar gets quite top marks from the Managing Director and Chief Executive Officer of HighCap Securities Limited, Mr. David Adonri, who while conceding that Agbaje has done reasonably well in the period in which he has led the bank, but he also situates this success as quite significantly coming on the heels of the equally notable strides recorded by his predecessors in office:
‘’Well Agbaje has done his bit. But I will not say he performed better than his predecessors, Mr. Adeola and Tayo. He only kept the flag flying.’’

Similar expressions of applause also come from the Chairman, Progressive Shareholders Association of Nigeria, Mr. Boniface Okezie. Notably, Okezie, while also observing the legacy of solid achievements recorded by Agbaje’s predecessors, puts him on a pedestal above them:

‘’Agbaje has done well, and may even be said to have out-performed his predecessors in terms profitability and payment of dividends. We want to see him continue to do his good work in the bank. He is still young and energetic. He should be the GMD within the new Holdco structure.’’

Good thinking, good product’
TBank emerged among a number of smart, brand new financial institutions start-ups that saw several polished, young, upwardly mobile industry professionals joining in the throng for licenses when the Ibrahim Babangida military administration launched a series of economic, political and social reforms in the country.

Reassuringly, and in a climate where business alliance agreements have more often been sustained in the breach, the bank’s founding team were prescient enough to have put in place a fairly well rounded succession structure in place.
As its founding CEO, Fola Adeola was assuming the levers of office in the 1990s, it was clear to everyone that his successor was going to be the Deputy Managing Director, Tayo Aderinokun. When Adeola bowed out, Aderinokun stepped up.

Following the untimely circumstances that led to Aderinokun’s exit, first on unavoidable medical leave, and second because he did not survive the infection that had made it impossible for him to continue leading the bank while his tenure was still counting, there was also to be no vacuum point. The current helmsman, Segun Agbaje, stepped up, first as acting Managing Director, and then following Aderinokun’s demise, became the substantive Group Managing Director at the bank. Going forward, many expect that given this experience, the bank would also scale this current phase of its ongoing leadership renewal story fairly effortlessly.

Chalking the tape

With Fola Adeola as founding MD/CEO, Team GTBank drove a quite strong bargain out there and soon came to be recognised as one that stood out. After serving for 10 years, Adeola bowed out of the leadership stage at the bank with his deputy, Tayo Aderinokun, stepping up.
Tayo continued chiefly in the already established pattern and ran the bank quite creditably until ill-health got the better of him and he had to stand down.

Yet another transition, and a different one

While the transition from Adeola to Aderinokun was generally genteel, there was however to be a bit of a ruckus when the baton was to move on substantively to Agbaje. However, the issues were to be resolved in his favour and he then moved on to take up full management control of the now bristling bank.

At the moment, feelers are that the current transition that is underway has witnessed even much more than the jostling and positioning than had been the case when Agbaje was coming in. Part of the explanation for this, analysts suggest is the fact that the bank has about crossed the founders stretch where some seemingly fairly defined succession format had prevailed. At the moment, the choices are not that ingrained as relatively new ‘Pharoahs that did not know Joseph’ are seemingly in contention for the leading spot at the bank itself.

Added to this is the fact of the Holdco’s emergence and almost very clear plans for Agbaje to transition into the leadership perch in that supervisory ledge. The implication then is that for continued smooth functioning of the financial sector edifice, questions of concord and chemistry between the two leadership drivers at the bank and holdco levels would have to be quite seriously factored in.

Brand image is many things
The picture of a vibrant, creative and astutely professional bank has featured as a key and quite endearing part of the Brand equity for GTBank since its founding.

Recall that this was to be challenged in recent times in the matter of the bank’s handling of its Innoson Motors transaction and which generated a degree of unfavourable commentary and seeming brand erosion.

Observers say that with the dust of that affair now fairly settled, it is quite important that no fresh windows of negative publicity should be allowed to be opened and even more than that, to fester as had been the case in some respect with the Innoson affair.

And as Agbaje himself prepares to move on to higher and newer roles, the thinking amongst industry watchers is that he would do well to be guided by the fact that beyond any thoughts he may have, the jury out there would continue to situate him within the comity of third generation leaders of trail blazing national and continental financial institutions. How well he delivers on this flank would be his enduring date with history.

And where exactly can GTBank yet go?

With two successful transitions under its belt and with a third only days away from being concluded, GTBank has surely weathered the storms. The Bank is undoubtedly a Nigerian success story and well-deserved kudos should go to the players and leaders who have helped build the organization through three decades of playing on the boisterous though turbulent Nigerian business waters.

Now if picking a successor at the bank has clearly not been a daunting GTBank challenge even at the moment, then the next place to look is on how the institution itself is braced for the challenges of the future, particularly in the light of emerging and changing realities within the national and continental banking and broader business landscape.

One of these has to do with geography. Another is technology. And a third brand appeal. There is also a fourth: structure.
Going into its future then, analysts say that the bank would have to ensure that it has all three areas properly covered.

Geographical pull

From its commencement of business, Guaranty Trust Bank Plc has continued to push very strongly to be a star bank in the Nigerian arena. In the course of doing this however, it has also pushed on the side, a programme of expanding its footprints far beyond the country.

Accordingly, it has set up branches, offices and subsidiaries in several of the nations of the world. Some of the other countries where it operates presently are Cote d’Ivoire, Gambia, Ghana, Liberia, Kenya, Rwanda, Tanzania, Uganda, Sierra Leone and the United Kingdom.
In an interview with Bloomberg, Agbaje had hinted that the larger picture for the bank involved making more forays outside the nation’s shores.

“We’ll start to look at other things, probably outside of what you are seeing us doing now, some of it might be to look at making acquisitions outside of Nigeria,” Agbaje told a select audience in Lagos. “In East Africa, we have to do one of two things: We either have to bring in capital or we have to think of acquisitions.”

Instructively, these forays have helped to boost the bank’s total balance sheet as pre-tax contributions from these non-Nigerian business centres grew to 16% in the first half of the year 2019. Significantly, the input had only been about 12% in the corresponding period in 2018.

With the overall business situation in the Nigerian home market continuing to witness tough headwinds that has seen a paltry 0.11 percent GDP growth in Q4 2020, GTBank and several other banks in the West African nation, including United Bank for Africa Plc and Access Bank, know for a truth that it makes sound business sense to take some of their business outside of Nigeria’s shores.

And they are not just doing this because they want to diversify their basic spread, the revenue and profit returns expected from doing business outside of the Nigerian market now are quite promising. With many African economies growing, until the outbreak of the COVID-19 pandemic challenge at between 4-8 percent annually, it surely makes sense to do business in those markets. And the initial feelers of viability and profitability are being proven to not be far-fetched.
Another reinforcing point is that this outward expansion is coming alongside the commencement of trading under the African Continental Free Trade Area, AfCFTA. Competition is therefore expected to continue to be rife in this area and it is one place where GTBank would do well to drive its game in a most measured but quite visionary way.

The challenge of technology

The disruptive force of technology is sending every business back to the drawing board and GTBank and other banking sector players are well aware of this. More recently, there has been an upsurge in the number and range of fintechs and telcos that are presently taking sturdy steps into the financial services products arena.

Should GTBank be bothered? Analysts reason that the answer would be yes and no. Yes because like every business in the field, it has been proven time and time again that you ignore developments like new technological infusions at your own peril. And no because the bank has actually been abreast of the issues already and is clearly in a far more comfortable position in this regard than many of its peers.

Says Henry Ezeh: ‘GTBank has one of the best USSD platforms in the country amidst DMBs. It also has a tech foundry of its own. The bank anticipates the future and has its sights set on the curved fiscal ball.’

The brand challenge

One of the things that got GTBank to occupy a high place in the consciousness of the Nigerian banking public was its noted strong drive and reputational integrity. It was one of the places that young finance professionals wanted to work in.

While this has been largely sustained over the years, there have indeed been a few dents here and there, including the damage down to its reputation on account of its messy loan book contention with Innoson Motors.

Tough days and a structure for winning

The issue of operational structure has lately been a core subject within the industry. Given the fluctuations within the industry, it has been canvassed that one sure way of protecting financial institutions across the long haul is through loosening their current structure forms in such a way as to allow them more leverage to tap other low hanging fruits and to more aggressively diversify their operations in such a way as to maximise returns. This has in recent time, seen the adoption by a number of financial institutions of the more malleable Holdco structure. GTBank is also headed in that direction with the process expected to be completed shortly.

According to Agbaje, it is clearly the imperative of diversification that is leading the bank on to transiting to a Holdco structure.

According to experts, the holding company structure helps firms not only to protect their assets against the threat of concentrated volatility but to also reduce risks overall.

In a briefing with top journalists, Agbaje who disclosed that the bank has already secured the Central Bank of Nigeria’ s nod to restructure into a holding company said the new entity would leverage on its solid 21 million customer base to compete even more profitably in the industry.

He said the entity’s current target was to soon be number 5 in Africa in terms of profit. According to him, the bank which already occupies the Number 8 position in Africa by profit would be focusing on the deployment of the right technology; fighting for market share and unlocking more value for shareholders.

On the transitional procedure to be followed, he had observed: ‘’We will delist GT bank from the NSE and list the holding company with its shareholders intact.’’ That process is already underway.

Agbaje who noted that most leading banks today are holding companies said the new entity will not only compete with fintechs but also explore the huge opportunities in the SMEs field, which in his view have barely been scratched.

The Man, Segun Agbaje

Scion of an illustrious Lagos family of notable bankers and entrepreneurs, Segun Agbaje attended St Gregory’s College, Obalende Lagos State and St Augustine Academy, Kent for his secondary education then proceeded to University of San Francisco in America where he gained both a BSc in Accountancy and a master’s degree in Business Administration.

He started his career working for Ernst & Young, San Francisco, USA and left in 1991 to join GTBank as a pioneer staff. He rose through the ranks to become an Executive Director in January 2000, and Deputy Managing Director in August 2002.

Agbaje was appointed Acting Managing Director in April 2011 and confirmed as substantive MD in June 2011.
Awards he has won as the Managing Director includes Best Bank in Nigeria by Euromoney; African Bank of the Year by African Banker Award; Best Bank in Nigeria by World Finance UK; Most innovative Bank by EMEA Finance; Best Banking Group by World Business Leader Magazine and Best Bank in Nigeria award by the Banker Awards.

Bank on the roll

Renowned for its forward-thinking approach to financial services and customer engagement, GTBank was ranked Africa’s Most Admired Finance Brand in the 10th-anniversary rankings of Brand Africa 100: Africa’s Best Brands, the pre-eminent survey and ranking of the Top 100 admired brands in Africa. The Bank was also awarded the Best Bank in Nigeria by Euromoney Magazine for a record-extending tenth time and the Euromoney Excellence in Leadership Africa Award for its swift reaction in responding to the Covid-19 crisis and for addressing the impact of the pandemic on its customers and communities.
The bank has been consistent in demonstrating its superiority over its peers in the banking industry.

As a result of its successes, many organizations have tried to model their operations after G T Bank. Its compact disposition appears to have yielded fruit. Some believe that the bank’s management style has even generated envy among its peers. Any time there is comparison among the banks, the argument tends to favour G T Bank more. This has truly mystified its operations and brand name over the years. Curiously, the reputable Harvard Business School in United States of America (USA) and Cranfield Business School had as a result carried out a deep research on the effectiveness and uniqueness of the G T brand.

Its modest success has shown that quality actually pays in the long-run. This may be the reason why the bank has run a modest, focused, tight and qualitative organization. In fact, the bank believes in doing its own thing rather than join the fray of aggressive competition that pervades the Nigerian banking industry.

From the early 1990’s the bank has tirelessly set the pace for other Nigerian financial institutions in terms of service quality, product functionality and excellent customer service. However, that quality of service may be waning now given the increased number of customers prompted by those migrating from the rescued banks. This has put more pressure on its capacity to maintain its quality. After listing at the stock exchange in 1996, it was the first Nigerian financial institution to undertake US$350million Eurobond issue and a US$750million Global Depository Receipts (GDR) offer. The listing of the GDRs on the London Stock Exchange in July 2007 made the bank the first Nigerian Company and African Bank to attain such a landmark achievement.

G T Bank is one of the blue-chip companies on the Nigerian Stock Exchange. Many have earned a living by investing in the bank’s shares. The bank has been generous to its loyal shareholders with impressive dividends. It has done fairly well. But a brand new day beckons.

How would it hold?

Henry Ezeh says part of the answer going forward lies in the bank’s history:
‘It is difficult to say. GT Bank started with Fola Adeola as the tactical game-changer with an emphasis on corporate banking. After the Adeola era, the next era of Tayo Aderinokun was less elitist and more retail-focused with massive readjustments to branding and market penetration strategy. At the demise of Aderinokun and assumption of office of Segun Agbaje, the bank seems to have chosen to keep a workman’s hand on the plough with nothing dramatic other than taking advantage of the retail market space given up by competitors in 2011 after the Sanusi L. Sanusi, then CBN Governor, cleanout.

Agbaje has not done anything fanciful or bold but has done a good job of keeping a firm hand on the ship’s stern as he meandered through charted waters. The new MD would perhaps take a cue from Agbaje to keep the corporate metronome ticking nicely. The problem here is that this could lead to a lack of freshness and innovativeness which could harm gross earnings and profitability growth in years ahead. On the flip side, GT Bank has built a corporate brand that has strong reputational capital, smoothly engineered internal processes and DNA that has become used to the technical requirements of success.

There is another caveat: boardroom politics. Says Ezeh: ‘The internal politics of GT Bank is subtle and complex. The differences between Tayo and Fola resonate quietly in the background with the containment of bad blood just short of peeping through the genteel cracks. The Holdco control will be a delicate balance of forces, old and new.’

So how could all of these then pan out? We leave the final word to Ezeh:
‘People rarely push themselves when it comes to running a well-oiled machine that has internal mechanisms that are self-adjusting. Besides, personality and era shape the kind of organizational evolution we see in companies.’
How does that well-worn line read? ‘Time will tell.’ We wait.

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