MD, FCMB Plc, Mr. Ladi Balogun
By Goddy Egene
The Group Managing Director/Chief Executive Officer (GMD/CEO) of First City Monument Bank (FCMB) Plc, Mr. Ladi Balogun, has said that innovation in mobile payments, financial inclusion, and regulatory intervention is making sub-Saharan African banks the future of sustainable and profitable growth in banking.
Speaking on: “The Future of Finance in Africa: Thoughts from the Next Generation” at The Economist Africa Summit in London last week, Balogun stated that African banks were increasingly becoming first movers.
The FCMB boss cited the example of M-Pesa, the Kenyan banking system in general and the role its regulator had played in promoting mobile payments and financial inclusion which has resulted in the highest mobile payment penetration numbers in the world.
He added that leading South African bank was recently conferred a global award for innovation, with solutions such as social (network) banking, cardless ATM withdrawals, unique branch formats - all aimed at increasing accessibility and convenience as another first recorded by an African financial institution.
In the case of Nigeria, Balogun cited the regulatory innovations in the country, which led to one of the boldest and most efficient crisis resolution efforts to be recorded by any bank regulator in recent times.
“Within three years the Nigerian banking industry has gone from non-performing loan ratio of over 25 per cent to less than five per cent and aggregate industry operating profit likely to cross $3 billion in 2013,” Balogun said.
According to him, this feat was achieved as a result of the banking industry’s decision to collaborate with other stakeholders and self-finance its own bail-out, set its own sustainability principles with goals around the environment, workplace diversity, financial inclusion and other key social metrics that promote good business and operating practices.
He further commended the Central Bank of Nigeria (CBN) for being proactive in de-risking the agricultural sector and promoting the fixing of the sector’s value chains, which has seen more than 300 per cent growth in bank lending to it within two years.
Balogun stated that successes recorded so far in the area of innovations have largely been driven by needs of the customer and society rather than the needs of the shareholder.
He said: “You will not find African banks innovating in derivatives or complex financial instruments a great deal. Rather we are likely to continue to innovate with unique retail credit offerings for the underbanked, payment solutions, financial inclusion, and impactful banking. Ultimately, however, as is being seen by investors in some of these markets, this form of needs driven innovation ultimately results in strong and sustainable shareholder returns. Despite the challenges, largely due to the high growth rates and innovation the future is positive for the financial sector and banking in particular.”