BY EMEKA EJERE

The anxiety in some quarters that the exit of Tokunbo Abiru, from the pilot seat of Polaris Bank Limited may see the end of the growth trajectory in the bank is fast giving way to excitement and higher expectations.

Not only that as acting managing director/ chief executive officer, Innocent Ike, is leaving no one in doubt that he has what it takes to step into the big shoes of Abiru, he exhibits potentials of even surpassing his predecessor.

Before retiring on August 1, 2020, Abiru had completed his two terms of two years each, first as group managing director/CEO, Skye Bank Plc and managing director/CEO Polaris Bank Limited.

On July 4, 2016, the Central Bank of Nigeria (CBN), intervened in the management of the then Skye Bank Plc by reconstituting the board of directors, shoring up the bank with N100bn capital injection. The regulatory action on the bank led to the resignation of its chairman, Mr. Tunde Ayeni, all non-executive directors on the board, as well as the managing director, Mr. Timothy Oguntayo, deputy managing director, and the two longest-serving executive directors on the management team.

Abiru was then appointed the group managing director and chief executive officer of Skye Bank in July 2016. Skye Bank was one of the banks that emerged after the bank consolidation exercise which ended on December 31, 2005, led to the reduction of Nigerian banks from 89 to 26. The banks that united to form Skye Bank were Prudent Bank, EIB International Bank Plc, Bond Bank, Cooperative Bank, and Reliance Bank.

The new bank later acquired Mainstreet Bank, a bridge bank for Afribank in 2014. Stakeholders in the banking sector said the problem of Skye Bank started due to the challenges it inherited from Mainstreet Bank as well as the refusal of bank executives to abide by CBN rules and regulations.

On September 22, 2018, the CBN again intervened in the ailing Skye Bank and the operating license of the bank was revoked to give way to Polaris Bank Limited, a bridge bank created in consultation with the Nigerian Deposit Insurance Corporation (NDIC) to assume the ownership of the assets, all deposit liabilities and some other liabilities of distressed and defunct Skye Bank.  The bank’s share capital had run into negative territory due to bad loan deals. It was also in urgent need of recapitalization, a need its shareholders lacked the capacity to meet.

Changing the narrative

Abiru, as the managing director of the bridge bank, took up the challenge, spearheading several growth initiatives which have placed the bank on upward trajectory. The Abiru-led Polaris team continued to implement the July 2016 regulatory intervention to include entrenching sound corporate governance and risk management practices and transforming Polaris into fully fledged retail and commercial bank with strong digital backing.

The bank invested significantly in technology with copiously integrated service models enabling customers to enjoy banking services through a wide range of channels. As a result of several transformative business initiatives, Polaris Bank can now boast of a strong market share.

Mr. Abiru successfully implemented cost management initiatives which have enhanced liquidity and efficient service delivery to the bank’s customers. Through his aggressive recovery initiatives, the bank has been able to recover over N200 billion of outstanding bad loans within a short period.

Also, under his watch, the bank was able to reach settlement and restructuring agreements with many of the chronic bad debtors resulting in substantially improved payments and prospects of future recoveries.

In line with the bank’s broad mandate which includes cost management and optimisation, as well as divestments to improve the institution’s financial position, the Abiru-led leadership of the bank embarked on several initiatives aimed at restructuring and repositioning the bank.

Some of the initiatives include: branch rationalisation, review of service contracts and cash management operations which have resulted in hundreds of millions of financial savings. Also, through some of the initiatives, the bank has successfully settled many matured trade and bilateral obligations while restructuring outstanding balances with the relevant institutions and counterparties.

Under Mr. Abiru’s watch, the bank divested from four local subsidiaries, releasing total cash value of N6.2 billion. Polaris Bank under Abiru also continued to promote the CBN’s National Financial Inclusion Strategy aimed at reducing the number of eligible adult Nigerians that are excluded from the formal financial system from 46.3 per cent to 20 per cent by the year 2020.

The lender also made available different credit and funding options to small scale entrepreneurs and business owners, operating in the informal sector, in order to bring them into mainstream financial system.

The bank also launched its revamped mobile banking application upgraded with new and exciting user-friendly features for a more convenient banking experience. With the application, customers can enjoy many benefits and access self-service options, such as, easy account opening, convenient self- booking and liquidation of fixed deposits, an expanded list of bill-payment options and easy activation of standing instructions and recurrent future payments.

These and many other moves leveraging technology and building a culture of innovation are fast repositioning the bank. Little wonder today, Polaris Bank’s branches are witnessing heavy traffic of customers trooping in to carry out transactions, open bank accounts and experience the innovative trends that the bank has introduced to its business.

Speaking in numbers

By the end of 2019 and as Polaris Bank settled into a new financial year early in 2020, it was evident that the bank had achieved Abiru’s objectives for that critical financial year and was primed to consolidate on that good start in 2020. The 2019 financial accounts of the bank reflected positive outcomes.

The first audited IFRS 2019 compliant financial result showed a gross earnings figure of ₦150.8bilion and a Profit Before Tax (PBT) of N27.8billion within the first full year of operation. This is consistent with the industry average of financial institutions of its size.

However, the bank has also enjoyed the huge transaction support of Lagos state, which is an institutional shareholder as well as the loyalty of its core customers. With legacy national bank in its fold, most south westerners still have a certain nostalgic association with it.

The bank closed the 2019 financial year with Total Assets of N1.1trillion and Shareholders Fund of N83billion. A review of the results showed positive performance across most major key prudential ratios, including capital adequacy, liquidity, Non-Performing Loans which is now significantly in compliance with stipulated regulatory requirements.

The result showed that Polaris Bank recorded 14 per cent Capital Adequacy ratio and 81percent liquidity ratio both of which are well above regulatory requirements, demonstrating strong prudential compliance and assuring a strong capital buffer, careful liquidity management and resilience to regulatory headwinds.

The bank’s customer deposits stood at N857.9billion even as the lender continues to focus on stable, low-cost deposits and well-diversified portfolio devoid of high concentration. Similarly, the loan book stood at N261billion in December 2019, providing the bank with the desired leg-room to accommodate the required growth in risk assets to support the nation’s economic growth.

Commenting on the bank’s performance Mr. Abiru said: “The emergence of Polaris Bank on September 21, 2018, has heralded a new dawn as it laid the foundation for institutional competitiveness and service innovation in Nigeria’s challenging banking space.”

He further noted: “Our strategy which anchors on rebuilding the franchise and strengthening the balance sheet position provides enablers for ongoing initiatives towards lean operations and efficient balance sheet management devoid of capital erosion risks.

Chosen for continuity

According to Polaris Bank, not only has it been a pivotal part of the bank since July 2016, but a major driver of the corporate transformation journey.

“This gives an assurance of continuity: a definite continuation of the strategic plans and initiatives that brought the bank the successes it has recorded till date,” the company secretary, Mr. Babatunde Osibodu, had said in a statement.

Having garnered over three decade of professional experience in the banking industry, the new managing director/CEO was until his latest appointment the executive director, Technology and Services while also overseeing the South-South/South East Directorate of the bank.

Osibodu said that with the change of baton, the bank would continue to deliver on the sterling performance reflected in the full year 2019 results in which the lender posted profit after tax (PAT) of N27 billion.

“To buttress the fact that this is sustainable, the bank’s first half 2020 result showed a PAT of over N18 billion, despite the tremendous headwinds brought on by the COVID-19 pandemi,” he said.

Osibodu said the board of directors of the bank expressed the confidence that the bank would benefit immensely from Ike’s skills and wealth of experience.

Speaking during the 2020 Customer Service Week, Mr. Ike thanked the bank’s customers for their patronage, stating “As customer preferences evolve in this digital era, we will continue to explore innovative ways to serve and delight them to the best of our abilities.”

He also commended the staff of the bank across the country for their dedication to duty, noting that “the staff’s commitment to service delivery even in the face of difficult times such as COVID-19 is commendable.”