(Eyes on power) UBA @ 70: Can the Global Bank become national leader?

Last week UBA Plc, the Global Bank, rolled out the drums to mark its 70th anniversary. The celebration is well deserved and we rejoice with them. Attaining 70 years in Nigeria is a feat for both human and business organizations. Our society is characterized by high mortality rate for both man and organizations. With the highest bank mortality rate in Africa, a hostile business environment predicated on infrastructure deficit and a huge regulatory burden and policy somersaults, surviving for 70 years is not only an unnerving experience but also seems like an eternity.

So, 70 years is a major milestone to celebrate and those born at the time of its founding would now be senior citizens and in ripe old age. Looking back, how many banks that started long after UBA was founded had disappeared and their memories forgotten like aborted babies. Yet this could easily have been the prospect for UBA but for the timely intervention of the Standard Trust Bank, STB’s, team.

At the time of its acquisition by STB in 2005, the legacy UBA was in the throes of death; its acquisition was perhaps the life-line that saved it from the auction slab. It was a deal between two ambitious young men: one in trouble, the other ready to help. It was a marriage of convenience; both got what they wanted and the bank received a life-jacket to float again. It was a similar move by Mr. Tony Elumelu that transformed the moribund Crystal bank to STB a few years prior.

Before the transaction, Mr. Hakeen Belo Osagie, who emerged the majority shareholder of the bank after its privatisation in 1992, had run into storm in managing the bank and was in deep trouble with the law. The bank had been severally sanctioned by the Central Bank of Nigeria, CBN, for regulatory and corporate governance breaches and these weighed negatively on the perception and operations of the bank.

The result of a subsequent forensic audit was so grave that he was summarily sacked as executive chairman and blacklisted from running any bank again. Also there were allegations of fraud against him which prompted the intervention of the EFCC to uncover the truth. Clearly the future of the bank was in jeopardy and most investors took flight to safety. It was at this critical time that Elumelu took the bull by the horns. Earlier Stanbic bank of South Africa had tried to move in to take over the bank but was blocked by the CBN. The rest as they say is history.

Up till this period, the position of the bank in the banking landscape had been pretty obvious and uncontested. Three banks dominated the industry – First Bank, Union Bank and UBA – everybody knew their position and place. Union bank then had a slight edge over UBA for the second position; but it was a decent and enviable position all the same; and nothing could detract from its glamour and prestige.

Until the new kids on the block arrived, including Elumelu himself, and everything changed, with the threesome banks grasping for the straw of industry leadership – for UBA more than the others because of the Elumelu factor.

Ambitious, aggressive and strategic, Elumelu’s generation of bankers are now in ascendency and their banks in dominance and leadership; yet UBA has remained in the shadow of the new dispensation, unable to make any stake for the top three which Access bank did recently. With its cherished history and size UBA seems to be punching below its weight category, as pugilists say.

Many people had thought that UBA would be pushing for the top position after the acquisition. Well, that has not happened, but could still happen. Instead, the bank pushed for global presence and succeeded in taking over the Africa banking space; which in itself is remarkable and commendable. With presence in over 24 countries including U.S. and China, two of the largest economies in the world, we can say the strategy is visionary and well-focused.

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The bank also pride itself as technologically innovative and I can attest to that. It is a tradition carried over from the old STB, which was the first bank to introduce a nation-wide money transfer in the country. In 2001, I was in Jos Plateau state on an assignment and needed to transfer money urgently to Lagos. No other bank could do it except STB that was just opening a branch on Langtan street. So this claim is historical and evident.

However, while the bank has done well in its global operations, which seem to be its cash-cow given the ratio of its global performance to the bottomline, the same cannot be said of the national or domestic operations. For an institution that is linked to over 30 destinations worldwide it still suffers the major hiccups associated with banking in Nigeria. That the bank is working and performing excellently outside the country cannot be a consolation to the inefficient and poor service delivery at home for whatever excuse or reason. A true test and indicator of its performance is what happens at home and not elsewhere.

What do Nigerians think and say about the bank should be the litmus test of its place in the industry. Making money is good, which it certainly does with its global bank strategy; but winning the heart of the people is better because, in the final analysis, that is what will stand it in good stead regardless of the dynamics of global financial system. Charity, they say, begins at home.

Without satisfying its local customer base, it could hardly challenge for leadership of the industry, which in all probability, and given its pedigree, it is rightly and traditionally equipped to take. However, leadership is a function of the confidence and trust of Nigerians in a bank and its capacity to deliver efficient and quality service. This, unfortunately, the bank is not doing.