32
THE NATION MONDAY. NOVEMBER 26. 2012
THE CEO
Despite its enormous potential, agriculture suffers from funding in igeria . Banks run away from supporting the sector, citing among others, risks, high interest rate, short term nature of sources of funds and lack of access to technology. But things, according to the Managing Director of Sterling Bank PIc, Mr Yemi Adeola, are looking up. He told Group Business Editor AYODELE AMINU that lending to the sector has risen following the introduction of some schemes by the Bankers' Committee. He also spoke on the benefits of Sterling/ Equatorial Bank merger and how regulatory challenges worldwide . .. ~.. have been putting lenders on their toes.
L
END'!'Ir;G 10 tht'_ ..,sricullunl HelOf of
the KOnomy II ndlculousl) low ... 1_ Ih.. n ',",'0 pe:r uont. Wh y aTt' banu thy. ins .. " ... )' fro m lC'nd ins to this Relor given
J
Agric lending has risen'
its potmli .. IJi? AgncuI~ u. Ul~ thr bAcL.bont"of thl \i,senan Konomy .. nd 10011)" conlnbulH abOut 4.1 per Cftll Of the counlr)"s Gr086 D0-
mestic rroducl (GOP) Ind accounb for ~hh :"5 pn cent of lht non-oll sector's R~I), m SJ'I~ of thJ5 IIsncult\1rr ac· counts fm 00.1)" 1.7 per (ft1.1 of toW lendmg b) ~ I wul &lve you .. few ~uons wh)' ttus ha.:. been the c:ak flf~t. ban1.J operilted in .. tugh mtc:ral nile regune". coupled With the short-tum n.lIUft' of InC' 50Urca of funds to ban1.J. Second. agncul-
NI,·"
fur«' has ~ ntowed lIS .1ugh ru.l.," ,'entun
g1"m us pecubolnue such lIS suscrptibthty to unI,woufJlble ""'81M C'OndJbQnS llunl tnfrastructura.l ddiolenoes .nd hugdy Iunlied ao:e5 to unp~-ed technologle5 Imuls agncultunJ producuon C'OnS.Id~aDly. How~·~. With the IlIITOdUCbOn ol tJw van0U5 IlIt~'mbon funch lind credit ~ ment llIiti.1t1H'S by the Cmtral &n1: 0(1\1g~rl.l ICBN). Bank ollndustry (801) and thl' ~«aI M,uu~try of Agricuhun (which MV~ m.d~ lendtnr; to W 5«tor ~nl.r.blr And profltmirJ, I can YV confidmtl)" tNt Iendmg to thr!«tor has IlICJ'85ed and we expect to !lee &reat~r panlCJp,lIt!on of banks ovrr tUM SC:hmle such as Ihr Nigenan lnca1tl\"r-Basrd IWl. Shann.g m Agricu.ltWlLlI..endmg ~1RSALI and the CommerciAl AgricuIlu~ CrMtl Schemr (CACS) NI\'r I long WAy tOWArds rmpownmg fAnners &fOUna thr country and M\"r macJe possiblr tlungs. YIotuch A fiw )-urs At;O could only br unaganed I am h.ioppy 10 ... y tNol Scrrhng &nl.
sonr
has grown ttus Jegmmt ollb Ic»n bool. 10 almOSI !i per cent of total I[)IIM. Also. we ha.\~ m pWcr A comprtent mat\oIg~t team Ioolmg II thl5 torgmrnt Clll'duify and wod.mg Willi borTu\.<.'~ to rxplo~ thr lJ'Inumerabl~ op~rturul!es nAlliblr Today" Sterling Bm1 nanls as one of Ihe most protnUW"J'lt banks proYldtng finM1ang coU...bontKW'l With stal.moldrrs tn tM Agrirultunll RCtor through strong putnenJuP' With 1M ~I Muustrv of Agriculture. CBN, 801 and othrr anternahOnai ~clop mmt ~ tnStitutJOnS The oil and gu Kdor, in addition to api. tal markl't used 10 be the two miljor Iwo urton IMI enjoyed fu nd inf fro m the bank.. Whal j, Ihr situation lodOl)'.
w
Stt"l"hng &n1. h.u "'"rr- the yeAD hrlprd 10 economiC ilctl\"ltJts bV orl.Jm.allr III resource to Idmtifi~ w~ It WIll rrW.r" mP~gfuI unp.c1 and surport econorruc d"riopmrnt Two of the <iC'Cttn thai bc!nI'flted hug!!ly from tM ban1."s lenchng actIVlllf5 an ITW'M-l. kndmS ~por turutlf'S tnen'il.Wd Il\ ,he ww 01 the capital M.ukt expl~ tha..1 wlrne5!ied the rmergrncl" 0( a \-ibnmt ma.rkt't towanh thr end 0( the I.I!iI dl."C.lde Abo, d~"'tlon of the dOWT\!>trN.m ITW'kt of the 00 Ie Gu St'CIOf couplrd wuh ~~~fo\-rd flnandill stre\gth of banb .. the 1wlk.s to these promot~
5«tors
~tendmg
..
""", The conhnued mcreaR In fundmg 10 thi' capital mar1.t't
Wol5 buoy~
by thr l1uge
Ill·
'The benefits of the policy when fully achieved would be increased convenience, addjtional service options, cheaper access to out-of-branch banking services, and reduced risk of cas h-related crimes to the individual. For financial institutions, it would increase access to capital, reduce revenue leakage, cash handling costs, drive incremental inveshnents in alternative channels and lead to product innovation'
now of forrlS" dlft'CI m'"l':!ilmt"l"lt mto the ~or. which stunubted the m .. r~t't and tTlcounged equltl" Iudi' .. nd ban1.~ cMnnehng col t'llCft6 hquldlt~ W thr Wdor This ronlm~ UNlNltlo-d untll the mul.n br1:;lIn 10 OV!!rMiit and t'\"entualh ~ In }007/2008 With IIJ oq;abve Imp;tct on lhe ~~If'U\, Tht oU &:: ga) strtor" ~ualh' W\ sudden and 5hatp drops In mternational me"I'KY pncI':!i With ~umt d~ preoabon 01 the Nllra, wturn dNlt .. hen)' blO'to<o, to the dO'to<o'nStre'-In sub-sector ThOImfully. W Imp«t of the m~hdo"'" of tMw5«ton on 'ilft"lang s...ru. was rrununal. dur to our luruted ex~ to thmI wruir SttTlmg &ru. M5 contlnurd 10 S""'" Its 011 Ie gu OOSUlt'SS to ch(r. thr Wlrnt' CAnnot br SOlid of thr apllal rnarl..ft b«aw.t' III thr dNrth of rconomK 1C1J\"lb~ '-lid InOIrL.et apprtltr 10 WJIIIT.InI uch 'IUJ'POI1 TocLnhoweYt'!". oLl.lnd SA' r1Ul~ high in the lend'mg portfolio 01 the banl <:>thO.-r "t'C1:~ thai th(o ba.ru. lUis continued 10 supron IfICludr \milll lind mt'iitum enlerpTl~"~ ISME"' manufacluTlng" .. gnculture. powi'r telK'om5" mfrtitruclut(' and rror-ct fin.mcto.
among othen.
How will you HH:tii the b~Id"~ Industry in the first 10 months of the le.lf! Has lhl' rumt b.lnt...inS M'CIor re(orm~ rOilid off? So faf, W!! Nve WltnrtISoI'd OIl wo.tor-wldt' rf'tum to solid profits wpponrd 1." the cli'i!n'
THE
A TION MONDAY. NOVE..\-IBER 26, 2012
33
THE CEO · Conunlled from p&&"' lZ
up of ba1MIce shedS led bv the As-
set Management Corporation 01 Nigl!N (A1<ICON) In 2010/11 and the return of nsk appetite, wruch has boosted lendmg. We hav ... abo observed euly Signs of rvturrung IIweto1" confldlmCe m0\5uy m the portfolio ~ments. This hM rerlKtll"d Ifl !.he Impwvlllg \-a1uabon olltsled eqwbts,. 2012 h.;u nol been Without some pam as some of the policy irutg· b\e5
Nye put stgrufii:Mlt
J
Agric lending has risen'
press~
on profitability An example of sum mcas~ 15 the 5harp II'ICJ"e;J..W In the Cash Reserve ~Iremenl (CRR) to 12 per cent - the highest lila decade as theCBN struggl~_to contam tnflahon.. 1he Impact of the fundmga.tsormml~umu
been slgrufianl. ThIS 15 one example ol5Oml!' oi the current dW· 1eng6 r~g the S«tor ha5
Tn, p"" of ,,,,,,'..ory "'~... both domestlc.Dy ;l.nd globally
continues to severely cnallenge operators and altauung .. ~ttsfac.. tory compliAnce status in rebbOn to ~ ~bOns 15 often qUlle dl!'DU.ndlng of ~gemenl hme and C'OfJ'OfiIte resou~. Nonethrless. one must commend the actions of the domestic reguhlltors who h.we tended to be 'Igmllcandy ahead of the curve when com~ to other JunsdkUom Bul the currenl po5Ihve ~ non of the seclor by stakeholdei-s .Jcr0s5 the. board stands as proof that the nght chOices nave been mode
a:d:t!~:f i~:r~~~I~~Znth:: ~hr~
CBN'.cashJess policy in l...J:gos,.one annot re.l.l.lyuy tlullhe policy h.J5 fully bken off. Who do we blame for thi •..• the b.-nla or the b.llnk ~1
Our dati 5uggests otherwue.. We seen our bra.nche 11\ ugos drop from our lisl of top cash usen s.i.noe the introduction 01. the ~icy - a clear Sign thai people are ~ sponding We expect thai il will take some time bdOl1! lotll ash 11\ orcuIation drop5 to the anbcipaled le'\'d bul the early SIgns are qwle pro,mising, Our progress In providing aheman\'e payment dan-. nels tiu been slow as the rehabllIty of the available commurucatlon solunoM contmues 10 be a challenge We are, how~er, evaluatIng an U1dustry-wide soIullon (al B.lnlr.ers' Commillee level), one tholl .. hould Significantly Impr<we our ablhtv to serve our CUStomers beller. The benefits 01 the pohcy when fullv .a.:tueved would ~ 1fICfeased con\·l!'nlent:t,'. additional <;otrVI\:e options, cheaper ~ to out-of· branch banking serviCes, and fI!'duced nsk of ca.sh-rdated cnmes to the tndlVidual For rlI1<lnCia1 U1snlull~, It would ~.l>oi." a...~ to capItal, rNuce l'1!'Venue leakage, CMoh handhng cosb, dnve Incrt>mental Investmenb 11\ altemallve ch.mnets and lead to product inn0vation Without Ihe pohcv, the b.:l.flU might not h.i!ve foW\J compt."lhng busU1eS5 reobOllS for dOlrtg h..J~·e
...
lhat said, It 15 probably 5CNwle to walt .I while longer before reaching any conclUSion on the lon~-Ienn impact 01 the pohcy Nlgeri.ln b .. n ks used 10 do weI! in Ihe a~.11 of consumer promo. Wh y .life they shying .w;ay from investing in coruumer pf'Oduds these d<l)'s? Promos <l.re a meM\S to an lend, a w<ly to promote.speafic ob)ecuves. We conllnue to run product promOllons 10 enhance our retail customer base ;as thu tema1IW our core oblKtive. You mily see fewer promos when It comes to consumer llending AS banls slnve to strengthen their nsk management framework before pushmg lendIng products, espeO.Uy those targete<t III the ma55 11'\aIUt. Comg forward. we expect to see more targeted product promob0r\5 ;as buth define the!.r market 5egmlents based on theu' nsk appetite:
num~1"5 We Are bUIlding olI ~us- tlmable bUSiness that will C'Ortlend for a leadership pOMhon ll\ our chosen market.Thls requlrfS • long-term view ~plle 1M IonSterm focus, we .Ire ple~seJ ""lIh the near-Ierm progress recorded on on-gOing Imll.lnves ilnd .Ire convinced th.llt things WIll get even beller as we consohdatt on ther early galM Th.lt beIng said, our quarterly illld yearly numbers are ceiUul to conllnue on the upward trend In the foresee~ble future We expect 10 tr.ll115lale mo~ of the ~ revenue mlO ~ holder value dunnf!!; the final quarter of the year on the Nck of th~ third quart~r momentum. As .In U\Sbtullon, we are focused on dehvenng suslalfUlble v~lue 10 our sh<lreholden but the det~lls wdl become clearer.lfter yea r-end. The combmed fnnduse has eMancrd eammg cap.w:ily illld efr~ is just ~mrung 10 lr.ick Ul. To wJul exlent have you bft:n ~ble 10 combine Equilorial Trusl BMik customef!l with those o(Sler· ling Bank ~nd wh..J1 is your cu~ tomer b.ll5,e? The mte:gratlon of the erstwhile ETB With Sterling Bank was I success by aJl panunelen;. Our processes, products and branches "'ere h~rmonlRd se.mlesslv and became funCllonai .Icross Ihe enlarged erttltyon Apnll,2012-tive months .fter the annou~ent of the ~l"I in October 2011. \\That IS most wMf'lmg for me u Chief Execuhve officer IS that my te:ilm .ccomplished these by reJylng almOSI completely on mIl'ffial reoun:es.lnd Wlthoul compromising our ruk man.lgement .Ind operat'"g processes The fC'COrd-selllng speed and dHoency of the inte~ral1on process IS unparalleled UI our uldUlirry and IS unlikely to be s~ for some time We successfully migrated over 300.000 customers from ETB 10 our network In Apnl 2012 MId we are
:::t: !~~I:a~~~o~~~VWe0: main deeply grateful to ill! our loyal customers who stayed true to the St.erhngbrand dunng the minor disruptions wltnessid In March 2012 when we Integrated our sf5tem.s. We Nve re~ out to many of these cuslomers dut· Iltg thl.' variOUS customer eVfnb to show our appreaabon and we certainly luolr. forward to broad· enmlo: thiS chen.shed rdiltionsJ\lp Sterling Bank used 10 be ~ fringe pl.llYu before Int YUr'1 m<rlJer with £TB. llow.trong is the br.lnd now in te rms of co\'er.llgt and net worth~
In must Afnan o;ountn~,.11 baru. With O\'er $01 billion In as5eb and 180 bnnches Will be among the top thret'. It IS • ~tlmony to the 5lU of th~ Nigen.n\ market th.It we are claSSified as a mid 5ize bank. With N45 billion In c-apttal and a worUorce of 2.~ protes51onals, SterlIng IS fast bcCommg svstem.tllally Lmportlnt We ilI't ~rtaln thai a feW years, we Will be a SCUm! of n.llorvl pnde and a glob.lUy re!>pected fln.nC1<11 &rand. We have done the groundwork and thl!' re$ulb shoUld become app;rrent to the pUblic In the near future 'n the first nine montM of opel"olltion this year, lo.tlns an advances improved from NlfH.J billion to N22!I .-Ll billion. Wiuol i5 the targ~ ~I. for the full yeu .nd how realistIC 15 the targ~t"? We hol\e alre<l.dy achle\'ed iI :!J per cent growth in loans and .lid. vances this year and thIS 15 am· sistent With our gwdilnct' to the market for :roll. Aowever, we remain open to tappmg excephOnal opportunlllH th~t art' IIv.lll.lble wllhm the bound.II.nes of our ruk appellte We are however, ml."\dfuf of the c0ll5e<lumces of .IggreslYe 10000n growth, The repercusSiOns can be dlSUtfOus - hence ->or srrategy of a moderate growth In nsl iISset5 for the resl of the year
In
TIle fallout of the financW crtSlS m the industry was a ..,lJ!htemng of banks' nsk man<lgement frilmeworks and .. re-ali~t of their U1dlvldual nsl porlloh05, We.;are unlikely 10 get to the dol}'S of endless and I1llJ1!lenlmg offers of unsecured COfl5Umer Credit thill ere-<lIed Ul\5usta1l"l.lble ~d debt UI the western market. In (ine WIth our retail strat!:gy, Sterling Banlr. has a bouquet of promos 11\ the pipeline ta~ed at speerI(' segments of the retail mark! to encourage the culture of savIng particularly among the younger generalton. OM of such 15 the Savers promo. which 15 currently ruMUlg
th~ob::~!~extC::!b~::o! ~:: ~::I~/'::~~c ~~Id~~~~rii~ the new Sterling Bank? The bUSiness comblnabon With
ETB ~ olI signiftnnt milestone In Sterling Ban],; 's drive towuds bUilding a Slob<lllv competitive retaIl franchise, We .Imost doubled the size of busmess With !hiaddlbon of over 300.000 aClh'e customers, We also grew our lotal assets from N3SO billion to nearly N600 billion, <ldded 80 achve branches to our network and 11\~ our staff strength by 1.JOO As • result of th~ expanded footpnnt. we h..Jve now succeeded UI refocusmg our <llIenbon on .Iternab\'e chimneb, nearly doubhng our Automated Teller Machines (AlMs) in one )-'Nr. We have also leveraged our expanded presence to grow our bUSIness '" the firsl rune months of the yeu Our gross earnings rose 10 NSI bllhon, .Ilmosl twice the amount generated m the same penod ..., rear while mteretll'\COll\e rose by 10 pott cent year-on-year
:,~~g ~t~r:' ~t unproveIf )'ou &:l .1 our third quarter results, we grew loans .Ind ad-
ii~c: bthe23~k ~~:~ ~~ presence in the corporate banlr.U1g .segmenl. Following our succes· fuf mtegratlon, we grew our dePOSIt to an .III-lime fugh of N434 billion lasl quarter. In your unAudited ruult for the first nine months of the year, profi t before I.IX jumped from NJ_Ol billion to N4.77 billion. while after I... es, nell,rofit distributable to shuehol en increased from NZ,7;l billion to N4. 49 biliionY/h<l1 sh ou ld your s ha",ho lders exp«1 when the full yeu result is rudy? Our philosophy 15 to thmk longterm. We ~vOld the tempbllon of ludglng our progress on shortterm paramete-s such as quarterly
10"'