Four years after their first meeting, African Banker editor Anver Versi renews his acquaintance with one of the most dynamic bankers in Africa – Aigboje Aig-Imoukhuede, the chief executive of Nigeria’s Access Bank. These have been four dramatic and traumatic years for the industry in Nigeria. Only a handful of the leadership has survived the storms the industry has had to weather. Aigboje is one of those that appears to have come out stronger. What makes him tick?
The last time I interviewed Aigboje Aig-Imoukhuede was in 2007 in Abuja during a summit hosted by the Nigerian Central Bank. I described him then as one of the new breed of Nigerian bankers who, having cut their teeth in some of the world’s best institutions, were not satisfied with being the best in the country but had set their sights on being outstanding globally.
I remember being very impressed by the ambitions of this tall young man – he was only 41 at the time – and with the ease and fluency with which he discoursed on the industry in Nigeria.
This was during a period when the Nigerian banking industry was flying high and creating a sensation worldwide. The industry was growing at breakneck pace and spilling out of Nigeria to the rest of the continent and beyond. Bank chief executives had become superstars – fêted by the media and courted by society.
But unbeknown to most of us, dark forces were gathering. A year later, the ‘tsunami’, unleashed by the virtual meltdown of the US financial system, swept all before it. The worst of the storm skirted most of Africa but few did not feel its stinging lash. As bankers around the world scrambled for shelter, another ‘tsunami’ burst on the Nigerian industry.
The new governor of the Central Bank of Nigeria (CBN), Lamido Sanusi, disclosed to a stupefied nation that some of the country’s largest banks were in fact hollow structures eaten from within and that without external support, would collapse in a heap. All sorts of malpractice, including reckless lending, enormous bad debts and margin trading to artificially pump up share prices on the Nigerian Stock Exchange, among other examples, had been revealed.
Panic set in as millions of naira worth of stock were wiped off the boards and the stock market crashed. Confidence in the banks plummeted and investors scrambled to salvage whatever they could. This was probably the worst financial crisis in the country’s history.
Lamido Sanusi had to act quickly and decisively to prevent a complete meltdown of the system. CBN and the Nigeria Deposit Insurance Corporation divided the country’s 24 banks into two batches and took a fine-tooth comb to all their books. They lifted every plank and examined every nail before giving their verdict on the wholesomeness or otherwise of the institutions. The results of the first batch were announced in August 2009 and for the second batch in October the same year. Access Bank was in the second batch of banks examined. During this time, with confidence at its lowest ebb, all banks could do was to hold fast and hope that the Sword of Damocles would not descend on their heads.
When the CBN’s verdict was announced, there were more shocks in store. Some of the leading banks were found wanting. In all, eight banks were declared distressed. To protect customer deposits and accounts, the CBN pumped in around $4bn as a bail-out and dismissed the management of the banks involved. Revered bank leaders were arraigned in court and some were led to spend long periods behind bars.
Access Bank came out of the examination with flying colours. “It is a testimony to the strength of the bank’s reputation and the loyalty of our customers that we passed through this extremely difficult period without any loss of customers to other banks,” Aig recalls. “The effectiveness of our corporate governance and risk management frameworks were tested and we were not found wanting.”
With the industry shaken to its roots, there was little opposition to some of Sanusi’s draconian reform measures – including his stipulation that bank chief executives were limited to a single 10-year term retrospectively.
This meant that some of Nigeria’s greatest bankers, the likes of Tony Elumelu of UBA and Jim Ovia of Zenith were required to leave the arena while they were at the height of their considerable powers.
Thriving under challenges
While we followed the Nigerian banking industry’s surprisingly swift return to an even keel with great interest in African Banker, I was curious to see how the events of the past four years had affected the confidence of the tall young man who had impressed me so much in 2007.
This time I caught up with Aig in New York, where he was scheduled to play an important part at the annual conference of the Global Business Coalition on Health, which included some founding members such as the former British premier Gordon Brown, Virgin’s Sir Richard Branson, CNN’s Ted Turner and George Soros.
If anything, Aig looked even younger than he had done four years previously. “It must be because of the stresses and strains,” he laughed. “I thrive under challenges.” It was good to see that the trauma of Nigeria’s financial crisis seemed to have completely bounced off him and not left a dent.
What about the loss of $25m in 2009, I asked him. Had that not rocked his confidence? “We made a profit of $170m the year before,” he shot back.
“The year 2009 was marked by uncertainty. Banking was virtually paralysed while we awaited the CBN judgment on who would or would not get a clean bill of health. We took a conservative approach, defending our franchise positions and making sure we retained our customers. We’ve adopted the International Financial Reporting Standards (IFRS) and there was no consideration to play down the figures. We concentrated on making sure that when we returned to profitability, it would be sustainable. We made a profit of over $100m last year.”
When I interviewed him in 2007, he told me an anecdote that he said had been the driving force of much of his achievements.
As a 10-year-old, he lived with his family in Lagos but went to school in the north, in Kaduna. At that time, he recalled, only Nigeria Airways flew the route but there were no schedules. The planes took off when they were full and the pilots were ready. When it was time to go, there would be a mad scramble for the plane.
On one occasion, he was travelling alone and had his little suitcase with him. When the scramble started, he joined the melee but was elbowed out and left with tears streaming down his cheeks as the fully loaded plane took off.
“I vowed there and then that in future, I would not be left behind, standing on the tarmac,” he told me.
I reminded him of the anecdote. “Are you still concerned about being left standing while others move on?” I asked him.
“Very much so. This is what keeps me awake at nights. How do we sustain this eight-year-old success story? How do we ensure that we fulfil this vision, this call to arms, to transform Access Bank into a world-class institution?”
The Access Bank story has a remarkable beginning. In the 1990s, Aig-Imoukhuede, with a string of academic qualifications – including a law degree – under his arm, was an executive director at one of the top five Nigerian banks, Guaranty Trust Bank (GTB).
He and fellow executive director, Herbert Wigwe, left GTB and invested in an obscure bank, Access, languishing at the lowest ranking out of 90 in the Nigerian pecking order.
Their mandate was simple: Transform Access Bank to become one of Nigeria’s leading financial institutions within five years – 2002 to 2007. “Call it audacious, call it ridiculous – and many people called it just that,” Aig told me. “But we were convinced we could make it.”
By 2007, Access Bank, against all the odds, had achieved its target. It was No. 8 in a strong field of 25 and shareholders had seen a 1,500% appreciation in the value of their shares. The bank had 80 branches and had expanded into Sierra Leone and The Gambia.
“In 2007,” I reminded him, “you told me this was just the beginning. Much more could be expected. Have you managed to keep on expanding in the teeth of the hostile banking environment?”
Aig gave me a mischievous grin. “We now have 130 branches across Nigeria, Burundi, Côte d’Ivoire, DRC, Ghana, Rwanda, Sierra Leone, The Gambia and Zambia.” There are also three non-banking subsidiaries.
True to his word, Aig has driven Access to the No. 5 position in Nigeria and within the top 15 Africa-wide.
Pull and Push Factors
Really successful organisations are almost invariably driven by more than the profit motive. What has been the driving force behind Access Bank’s sustained string of successes? “The push factor,” Aig told me, “is my experience of being left behind on the airport tarmac. This gives me sleepless nights and urges me on. The pull factor, which has always been there from our very first transformation mandate, is the belief that beyond survival, there is a need to excel. This has informed all our transformation policies. My deputy, Herbert, the board and the entire workforce all share this belief. It is the raison d’être of our professional culture. It is what we do automatically, naturally.”
Aig says the bank has maintained the quality of its professional excellence by “recruiting Africa’s best from African universities and transforming these highly capable, highly intelligent Africans into bankers who can deliver outstanding results.” This, he says, is what has driven Access to the No. 5 position in Nigeria and within the top 15 Africa-wide in a record time span.
His mentor, Fola Adeola, pioneer MD and co-founder of Guaranty Trust Bank, always advised him: “If you do it well, it will be well with you.” Right at the beginning of the transformation of the bank, he says, this phrase, “If you do it well, it will be well with you” was ingrained in all the bank’s activities, including its advertising, its communications and its general approach to business.
With this philosophy, Aig told me, the bank had embarked on good corporate governance without even consciously thinking about it. “Over time,” he says, “I have come to learn that companies with good governance, healthy labour practices and a balanced relationship with their host communities achieve better results than those that don’t, and have better brands than those that don’t.”
Part of the secret of the bank’s success, he told me, was that it was outward looking. “If you are striving for excellence,” Aig says, “you have to aim to be world class, you do not limit yourself to the local benchmark – you seek out the best in the world.” For example, “We took all our policies, all our processes, literally everything, and we benchmarked them against Citi Bank, with whom we interact. We networked with world-class organisation that were prepared to sit down in the same room with us and share what they have done so well over the years.” He says 30% of the bank’s investors come from outside Nigeria.
Another example he gives for this drive to be world class and constantly improve is the attitude towards risk management. “Initially, we were overly confident of our risk management framework, but with the coming of the global financial crisis in 2008, we proactively dismantled aspects of it and built it up again to comply with best global practice and re-implemented the entirety of our financial reporting process, systems, everything on IFRS principles. So now we think IFRS as opposed to thinking local standards.”
Access is also the first Nigerian bank to sign up to the global ‘Equator Principles’ credo. Around 100 banks worldwide have signed up to this. “These are principles that guide banks on how to evaluate the companies and projects they lend to ensure that the environment is not harmed.”
Aig is passionate about the need to protect the environment and will not subscribe to the notion that Africa is too poor to take matter in its own hands. “So is it all right to destroy all the aquatic life in Nigeria because our people are poor? Or because our people are poor, we should strip all of our forests and sell them for firewood? What sort of legacy are we leaving the next generation?”
But this quest for excellence in delivery and the high ethical standards the bank sets for itself comes at a cost.
Operating in a developing market brings its own special challenges. On the one hand, the bank has very high growth aspirations; on the other, it wants to do so within its own high standards of practice. “This can be frustrating, very frustrating for our staff, who face the dilemma of doing business in accordance with best practices and still achieve good financial results.”
For example, Aig points out, while undocumented transactions are against the law, it is common practice in West Africa. “You tell your staff that undocumented transactions are off limits, but when they see competitors engage in it and customers being attracted to it, they understandably feel frustrated,” he says. “But you compel them to rise to another level. I keep on preaching about us aspiring to be this oasis of excellence in a sea of mediocrity – but it is not always easy to get the message across.”
If the bank was playing a niche game, dealing exclusively with multinationals, leading local companies, quoted companies, “the dilemmas are not so obvious because you are dealing with stakeholders who are themselves aspiring to best practice.” But in the hurly-burly of fierce competition for customers across all spheres of the Nigerian economy, it takes iron will to resist the temptation of bending the rules a little – especially when several others seem to be doing so.
With Access Bank’s rapid expansion, “there is the need to bring in staff from other organisations,” he says. “But there are some banks the staff of which I will not touch – irrespective of how good the person appears to be, because I fear that the wrong business culture could infect my system.”
The question is how does one swim against the tide? “There are three options: one, limit the growth of the organisation, play it safe catering to a niche market and stay true to your ideals – which is pretty much what multinational banks do when they come into our markets; two, join the party – which I’ve also seen happen to some hitherto sensible organisations, or three…” Aig pauses here.
“There is one aspect of my life which I need to talk about,” he says with a degree of serious intent. “I very much believe that God’s hand is over my personal life and the transformation of the bank. Many things have happened for which there is no explanation except divine intervention. The third option, and my chosen direction, is to pursue scale and use it as a platform for redefining the way and manner in which banking is conducted in Nigeria. That is what we have set out to do. I leave it to the Almighty to sort out the rest.”
Aig is a pastor and takes his church duties very seriously.
The Aig I met in 2007 and the one I saw in New York last month were very similar – the single-minded determination to carry out well-laid plans, the nimble intellect that allows him to adapt to circumstances without losing sight of the goal, the ease and confidence that so characterise him and the sense of humour which adds to his charm were all there, but I detected a difference.
The 41-year-old Aig I had first met was an up-and-coming, ambitious banker making his way among some of the giants of the industry. He had ruffled quite a few feathers in his headlong drive and there were some who warned that he was too aggressive for his own good. He had laughed this off and said he was competitive, yes, but aggressive? No.
The 45-year-old Aig I met in New York was no longer the aspirant; now he had arrived. Despite his youthful looks, there was a new gravitas to him. While he talked about pushing Access Bank to the No. 1 spot in Nigeria, his longer vision was clearly somewhere else.
“When I look at some of the great multinational banks – the Standard Chartered, Barclays and others of their ilk, which have been around for so long, I keep asking myself where will Access be in 50 years’, 100 years’ time? Can we create an institution that will endure that long?”
Clearly, he wants to leave a legacy that will live on long after he and the founder of Access Bank have departed.
But Aig is also thinking beyond banking. He is looking at the big picture. Banks, and other commercial organisations cannot isolate themselves from the wider economy. They have to be fully engaged in development because ultimately their fortunes will be determined by the prosperity or poverty of the general environment around themselves.
Again, with an eye to the future, the Access Academy has been training some of the country’s best young bankers. Qualification from this rigorous boot camp opens up virtually all banking doors in Nigeria today.
It is perhaps because of Aig’s enthusiasm and commitment to wider national issues that he has found himself sitting on several Presidential advisory boards and chairing the sub-committee of the Bankers’ Committee – composed of the CBN Board of Governors and the CEOs of all Nigerian banks – that is working with the government on economic issues.
Perhaps the thorniest of these is the perennial problem of the country’s erratic power supply. He says the problem will not be solved until serious credible players, indigenous or international, make significant investments in the sector and all the support services for the power sector value chain, including banking, are geared up for it.
“We have to make sure that the vested interests, those who have benefited from the power deficiency – suppliers of generators, importers of fuel and those engaged in the endless repair of the crumbling superstructure – do not get the upper hand.”
But he is confident that the new administration, under President Goodluck Jonathan who, Aig says, has thorough knowledge of the technical issues, is committed to reforming the power sector and will do so.
He points out that the situation in not new – other economies have faced similar problems but worked their way through. “The power situation in Malaysia and Indonesia, to give just two examples, was deplorable. They sorted it out eventually and so will we.”
One of the features that marked out Access Bank from the rest from its early days was the responsibility with which it interacted with the society around it. It was probably the first bank to take the gender disparity issue seriously and went out of its way to make special provisions for women, earning an African Banker award for Socially Responsible Bank of the Year in 2010 for this effort along the way. The bank has also been among the leaders fighting workplace discrimination against people with HIV/Aids.
This brought us back to why he was in New York. He was about to take over the leadership of one of the most important private-sector initiatives in the fight against the global spread of HIV, TB and malaria – the Global Business Coalition on Health.
“I have now learnt that those who truly transform do not stop with themselves, they use themselves as examples for others to follow,” he says.
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