Mr. Ahmed Kuru
Managing Director/Chief Executive Officer, Enterprise Bank Limited, Mr. Ahmed Kuru, said the bank placed premium on technology and as such had been making huge investment in it, with a view to competing favorably in the industry. He spoke with Kunle Aderinokun and Obinna Chima
How has it been for Enterprise Bank in the last one year?
One year down the line, I will say that it has been a good journey, given where we are coming from and where we are today. I believe that we have done a lot to provide an institution for the business of banking. So, it has been a very exciting and challenging experience because we had to do so many things to reposition the institution given the circumstance that we met on ground and the environment under which we operate. So from our own assessment, the result is something that is commendable as we have been able to propel the institution for the general good.
But when the board and management assumed control of the bank, what did you set out to do?
When we came in, the mandated given to us was to run the bank commercially and professionally. Of course, the first thing you do is to understand the issues on ground. For us, we set out to ensure that we set up an institution, polish the processes and policies and establish a strong institution that is driven by strong corporate governance structure. We set out to make sure that all the governance structure are in place so that we can create an institution that can compete, not in terms of size, but can compete in terms of efficiency, with any bank in the industry. We want to be sure that by the time we hand over this institution, we shall be handing over an institution that can stand the test of time, an institution that has highly trained and motivated workforce and one with a very strong brand.
You just alluded to challenges, what were they?
You know when we came on board; there were quite a number of issues. We had issues that had to do with staffing, the business, infrastructure, the brand and the market. So, all these issues were there. So, the first thing that we did was to look at how to make the staff to believe that they were entering into a different era and that we are here to take the institution to the next level. We understand that if the members of staff are motivated, we will be able to address other challenges. So firstly, we re-assured them that we are here for continuity because it was made very clear by the Central Bank of Nigeria (CBN) and the Asset Management Corporation of Nigeria (AMCON) that the whole idea about the intervention was to guarantee business continuity, to ensure that jobs are guaranteed and to also make sure that depositors’ funds are secured. So we went through the process of re-orienting the workers because from 2005 to when government intervened, so many things had happened. Secondly, we looked at the business because banking is a business of trust. The moment your customer feels uncomfortable, the next thing he will do is to move his business to another location. So we came up with a new marketing model to re-assure our customers that we are strong enough to address all their requirements, just like any other bank because we are fully capitalised with enough liquidity. Then, we were also challenged with the issue of infrastructure. You will be surprised to note that most of the information technology (IT) systems that we met on ground were facilities that were established since the Citizen Bank era. Therefore, we had to invest a lot of money to address our product allocation, servers, to buy computers, we had to change our messaging system and most importantly we had to train and re-train our people to appreciate what is happening in the industry. After addressing these infrastructural issues, we had to look at the brand. Beside the fact that we were coming from a brand that was encumbered, we were also introducing a new brand into the market. So, we had to start the process of how to sell the new brand firstly by disabusing the mind of the people about the old brand before introducing the new brand. Also was the challenge of delivery. Since 2006, there has not been any improvement on the branches. So, we had to start re-modeling the branches to fit into the new brand and concept that we wanted to sell. We had to re-brand the outlets to fit into the new banking environment because presently, banking is tilting towards technology driven services and delivery channels. So we made a lot of investments in our electronic banking channels, because today, not everybody wants to go into the banking hall. People want to have banking service inside their offices. So, these were the challenges we met when we came on board. When looked at them, we came out with a strategy as to where we want to play in the market, given our structure and funding to position the bank for the future.
Have you been able to retain the customers you inherited from the legacy bank and can we know the current customer base?
You know Spring Bank was a consolidation of about six banks and those were very strong banks till 2005. So they had very strong customer base. We inherited about 1.6 million customers. Now all those period that the bank was undergoing crisis, some of the customers kept faith with this institution and when we came, the first thing we did was to visit all our major customers and presented to them what the new bank is all about. We had to interface with them to let them know that we are here for the long-run. We also aligned our visit with our brand campaign so as to restore confidence. And that attracted a lot of them to the bank. Of course, the relationship management model that we adopted in trying to reach the customers was also beneficial.
In terms of financial performance, where is the bank today? We will like you to give us some specifics?
We are strong and we are profitable. But I will not be able to give you specific figures because our financial statement has not been approved by the CBN. But I can tell you that we are profitable, we have very strong asset base. What we need to do, which we have started doing, because of the amount of liquidity that we have is to raise our loan-to-deposit ratio which is currently at 10 per cent. The industry average is about 70 per cent. So, the issue now for us is to be able to create very good risk assets such that we don’t go back to what happened in the past. But in terms of balance sheet, I can tell you that we have a very healthy and strong balance sheet. What is important for us is that we want to be a bank that is driven by technology. We want to be identified with efficiency and cost effective in delivering services. So we are applying alternative channels of delivery such as credit cards, internet banking and others, which can reach the customer wherever he is.
But why is your bank and others not lending to small and medium organisation considering the important role they play in the economy? Also, do you support the aggressive monetary tightening adopted by the CBN?
Sometimes when you read in the newspapers that banks are not lending, it looks funny because that is not the reality. If you have very good customers that need credit, please bring them. We have given our marketing officers targets to go and look for good risk assets. So, people just assume banks are not lending, banks must lend! Once you are a commercial bank, the highest per cent of your income comes from interest earnings. So we are lending. But anytime the CBN realises that there is a lot of liquidity in the system, which affects the exchange rate, it mops up such liquidity. Banking is not magic and once you are dealing with the economy, you take certain measures, you watch the impact of such measures and if there is need to re-adjust, you do so. We operate in an economy that even having proper data is a challenge and a times you take certain decisions that you are not totally sure of. But I believe the CBN has to mop up liquidity to control the exchange rate. Of course, I strongly believe that rates would come down to the normal level.
What banking model did Enterprise Bank apply for?
Like I said, we want to be a retail bank which means we will operate at the commercial banking level. But if on opportunistic basis, we see that we can leverage on a corporate finance account, we can do so. But we want to operate and be identified as a retail bank. Once you are a retail bank, which means you have to focus on the small and medium scale enterprises and drive it both from the assets as well as liabilities side. This is because we don’t have the balance sheet to operate at the corporate finance and investment banking level. So if I say I am going to compete at that level, then I will be wasting my time and my resources. But at the commercial level I have the balance to support my business.
When are you going to finalise the divestment of the bank from your non-banking subsidiaries?
Yes, we have gone very far to the extent that we appointed KPMG about three months and they have almost finalised the report. What is left is for our board to take a decision on all our subsidiaries.
Few months ago, there were reports that the bank rationalised its workforce. What led to that decision?
What we are trying to do here is to run a performance-based organisation. When we came on board, we made it very clear that we are going to sack anybody. But we also made it very clear to them that we are going to run a performance-driven organisation. In the process, we told them that those that perform very well will be adequately compensated and those that consistently lag behind and refused to improve, obviously something had to be done about them. Of course, if the intention was to sack people, immediately we came in, we would have asked some people to go, which usually is what happens if there is such intervention. But we reviewed their salary, trained and motivated them properly. So we gave everybody the opportunity to perform, up to the point that on the basis of performance, we had to ask some people to step aside.
Where do you envision the bank to be in the next five years?
Honestly, all our strategies and plans have always been for five years regardless of the fact that we know that the bank would go through core investment and divestment process. But you see, we are selling an institution and whoever is buying it will do so based on its valuation. So I see this organisation in five years as an efficient, technology-driven organisation. Like I said, we want to leverage on technology to offer all our products and services to clients. So, we are investing heavily on technology as well as in training our people. We are very lucky to have a very professional board. What the CBN and AMCON did was to ensure that the board is populated by people from the industry and those that are also professional in other areas. On our board we have former managing directors and former executive directors from the banking industry. We also have former managing directors from the insurance industry, we have accomplished lawyers. It is a broad minded and highly professional board. Then on the management side, everybody is from the industry and we have five highly professional executive directors.
To what extent has your bank encouraged its customers to embrace the cash-less policy?
You know the CBN is very aggressive about the cash-less mandate and I can happily say that our bank is one of the top banks when it comes to the deployment of Point of Sale (PoS) machines, because we have deployed more than 2000 PoS in Lagos alone. We also have strategy to deploy PoS machines even to areas that currently the policy is not being enforced. While it is in Lagos, we are also sensitizing customers in other states. Really, we are leveraging PoS, Automated Teller Machines (ATMs), internet banking and other channels.
What do you do when you are not banking?
Honestly, the challenge here is so enormous that by the time I get home, I hardly watch television. Meanwhile, sometimes I go home with documents that I also have to attend to. You must understand that this is a turnaround situation. It is different from being appointed the managing director of a company that has structure, people, strategy and processes in place. But this is a totally different situation. First of all you have to make sure that the structures are in place, even if you go and bring clients and you are not able to meet their needs that would be double tragedy. So we are confronting a lot of issues. I have more than 400 cases in court. There is African Continental Bank, Guardian Trust, Citizen Bank, Trans International, Fountain Trust and so many others. So there are a lot of legacy issues that bugs one down. Now, to compete in the market which as you know is very aggressive, we have to look for people that are good to come and work us. We have to convince them to come and work for us and if they are coming from banks that are doing very well, we have to convince such people. Really, one will not be left with so much time.
Prior to his appointment as MD/CEO Enterprise Bank, Kuru was the Executive Vice Chairman, Emeritus Capital Limited, a financial services firm, with specialty in international business development focusing in sub-Saharan Africa. He was also an Executive Director at the defunct Bank PHB and he oversaw the Risk Management, Compliance, Commercial Banking, Northern Operations, Public Sector, Multilateral Agencies and the West Coast, East and Central Africa expansion programme of the bank. Before that, he held several other top positions, including General Manager/Regional Manager in charge of bank operations at the now defunct Habib Nigeria Bank. Kuru holds the Bachelor of Science (B.Sc) and Master degrees in Business Administration of the Ahmadu Bello University (ABU), Zaria.