Posted by By OMODELE ADIGUN on
Among the 25 banks that have just passed through the needle eye of the policy - induced consolidation of the banking sector, Equitorial Trust Bank (ETB) stands out as the only wholly owned Nigerian bank that internally raised the much-needed N25 billion without any recourse to the capital market or foreign assistance.
Among the 25 banks that have just passed through the needle eye of the policy - induced consolidation of the banking sector, Equitorial Trust Bank (ETB) stands out as the only wholly owned Nigerian bank that internally raised the much-needed N25 billion without any recourse to the capital market or foreign assistance.
This is hardly surprising when one looks into the history of the bank. As an aside, kudos must be given to its prime mover, Dr. Mike Adenuga Jnr. for that unique achievement. It is an open secret that the success profile of ETB cannot be divorced from the vision, direction and fiscal muscle of this astute businessman whose intuitive capabilities remain unequalled and inimitable in the nation's business terrain.
Equatorial Trust Bank (ETB) , incorporated as a limited liability company on January 30, 1990 and granted commercial banking licence on February 7, 1990, belongs to a big conglomerate spanning oil and gas, telecommunication and, of course, banking It commenced business on March 1, 1990 and currently has 45 branches in commercial nerve centres in the country. ETB is renowned for its exceptional customer service that keeps its clients satisfied in all the branches. Equipped with latest technology and backed by efficient and courteous staff, the bank makes transactions for its customers a hassle-free experience.
The bank has leveraged on customer-friendly service, sustained by relevant technology, to remain a dominant force in the nation's banking industry, Emphasis is on meeting customers' service needs in a courteous and business-like manner, and striking an enduring and mutually beneficial partnership with them.
ETB has harnessed its remarkable service culture to produce good financial results over the years. In its financial year for the period ending June 30, 2004, the bank showed remarkable improvement in most of its financial indicators taking it beyond industry standards. Its gross earnings grew from N9.1 billion to N12.63 billion, representing a 39 per cent increase. The profit after tax moved up to N2.3 billion from N1.5 billion while the retained profits swelled by 495 per cent to N776.7 million compared to N130.6 million recorded in 2003.
One of the strengths of ETB is its capital adequacy which has equipped it to operate effectively and confidently in the banking industry, to the satisfaction of its customers, and regulatory authorities. This has been a source of confidence to customers who see the bank as a safe haven to deposit their funds. The confidence has reinforced ETB's aggressive deposit drive and efficient management of funds which boosted its deposit base to N34.14 billion in 2005.
ETB's loan portfolio emphasizes a strong commitment to providing the needed financial support for businesses. Last year, the loan portfolio stood at N18.83 billion. And through an efficient management of the quality of its risk assets, the bank has been able to remain liquid and profitable.
It efficiently employed the resources at its disposal to generate impressive gross earnings and profit figures, reflecting a healthy growth in the year 2005. Gross earnings during this period hit N13.89 billion , showing a growth of 10 per cent. The bank's profit before tax stood at N2.88 billion reflecting an increase of 13.84 percent.
Agusto & Co., a leading and reputable rating agency in Nigeria, assigned the Rating of 'A" to the bank based on its 2000/2001 Annual Report. This confirms that its financial condition is good and that it has the capacity to meet obligations in the short term.
What does ETB stand for and how does its customers and stakeholders link up with its goals? The bank symbolises integrity, market edge and solid liquidity as an offshoot of that conglomerate. Its multifarious publics have the conviction on their investment and relationship with the bank.
As one of the 10 most profitable banks in the country, going by its current financial records, ETB remains a leading retail banking institution which has a partnership that works efficiently and effectively. Its leadership in syndication of loans for Conoil and Globacom is enough criterion that qualifies it to be among the 10 leading financial institutions in Nigeria.
In cultivating its brand philosophy, the focus of the bank, as a successful private institution and quest for sectoral leadership, is reflected in its day-to-day interactions with its internal and external audiences. In other words, the integrated corporate approach, apart from ensuring competitive edge for the bank, places it on a pedestal that signals its emergency as one of the leading banks in this post-consolidation era.
Consolidation
In a move towards meeting the N25 billion recapitalisation demand of the Central Bank of Nigeria (CBN), the Board of Directors of the old ETB decided to raise rights issue of N14 billion needed by the bank to shore up its capital base.
The purpose of the rights issue is to finance its branch expansion programme, increase capacity to do business in its niche areas of oil and gas and telecom as well as meet the new N25 billion minimum capital requirement.
In addition, the Board made arrangements to acquire another bank, Devcom Bank Limited.
With ETB acquiring Devcom Bank, it means that the emergent bank will be much stronger in the post-consolidation era considering the present performance of both banks, the enhanced branch network and robust IT platform available for service.
The resultant expansion in branch network will guarantee optimum service to its clientele in all parts of the country. The bank's objective is to ensure that customers have access to its services irrespective of where such partners are located. A peep into Devcom's profile will definitelty reinforce that conviction.
Devcom Bank
A wholly owned indigenous Nigerian bank, incorporated in 1989 , which commenced banking operations at its Oke-Awo Close, Victoria Island office the same year as a merchant bank, the bank soon established itself as a financial institution of reference, setting standard in virtually all measures of efficiency in merchant banking.
Following the acquisition of Universal Banking licence in October 2000, Devcom Bank was converted to a commercial bank. From day one , its resolve to be a role model in banking manifested, providing customer-oriented banking services to its customers.
If its antecedents as an upwardly mobile bank are used as basis of assessing its position in the industry, it has lived up to its name as a bank that provides total banking solutions to its growing clientele base.
The bank has , in the last 16 years, both as a merchant and commercial bank, sustained its vision to be the first choice financial services provider in all the markets in which it operates. It remained committed to providing professional financial solution to a discerning target market through a deft use of modern technology and a culture of excellent service. In achieving this, the bank has continued to build an enduring and long lasting relationship with its customer to enhance its bottomline.
Before it concluded its merger plan with ETB, Devcom Bank was an innovative, modern, professional and dynamic organisation, which provided quality banking and financial advisory services to its customers with integrity, creativity and responsiveness, thereby building an enduring relationship.
The principal activities of the bank centered on the provision of tailor-made commercial and investment banking services to a diversified customer base. This informed the reason why it constantly re-engineered its products and services to solve the individual needs of its valuable customers. Besides, the bank provided on-line real-time service delivery, which provided its customers the opportunity to operate their account from any of its branches.
Devcom Bank was managed by a crop of seasoned bankers with an average professional experience of 15 years in core banking.
The merger arrangement between ETB and Devcom Bank Limited was on Tuesday, November 29, 2005 unanimously approved by the shareholders of the two banks at their separate court-ordered meetings in Lagos.
The two banks were granted an Approval-In-Principle to proceed to this final stage by the Central Bank of Nigeria (CBN) after having met and surpassed the statutory capital base of N25 billion required by the Central Bank of Nigeria (CBN) as its paid up capital stood at N26.5 billion.
At the court-ordered meetings of the two banks, their shareholders unanimously approved the scheme of merger authorising the banks' Chairmen/Directors to consent to any modifications of the scheme of merger that the CBN; Securities & Exchange Commission (SEC), and the Federal High Court may think fit to impose and approve as well as transferring all the assets,liabilities and undertakings, including real properties of Devcom Bank Limited to the new ETB and the cancellation of the entire share capital of Devcom Bank.
A source close to the bank disclosed that the focus of the new bank will be on retail marketing and business development as both banks bring together competencies in the area of investment banking, public sector infrastructure financing, commercial and retail banking.
The new bank which is coming into the market with 60 branches has concluded plans to open additional 45 branches within the next three months while the process of bringing in qualified manpower to manage the additional branches have commenced.
The integration of the processes and staff of the two banks is expected to be completed within one month even as the new branches would accommodate any overlapping staff as a result of the consolidation .The source stated that a lot of emphasis would be placed on training the bank's staff to properly position them to compete in the emerging market.
However ,the bank in a statement said the merger would result in expanded client base, improved competitiveness in the market and have the capacity to introduce customer-oriented products and services through the alignment of existing individual banks. It will also lead to the reduction in operating cost from the elimination of duplicated management, administration and accounting functions, the bank said.
The statement added: 'The merger of the two banks will also lead to economies of scale as a result of a combination of the operations of the two banks. The alignment of existing individual strengths should lead to improved efficiency through a more focused management of resources, increased competitiveness and an expanded product range. This should ultimately result in a stronger bank which is well positioned to utilise the available resources for better performance."
Its Managing Director, Mr Ike Oraekwuotu, stated at the court-ordered meeting that the plans to increase the branch network of the new ETB was taken not only to retain the staff of both banks but also bring in seasoned bankers to complement the existing workforce. Earlier in the day at old ETB's 15th Annual General Meeting, its Chairperson, Otunba (Mrs.) Yetunde Adegbola thanked all the shareholders for their support in ensuring that the Bank in the last 15 years played a dominant role in the ever-competitive banking industry in Nigeria. She hoped that the shareholders will extend the same support to the new bank.
The new bank will undoubtedly result in the emergence of one of the most capitalised banks in the country and one of the sectoral leaders. This is based on both banks' current financial performance and potentials.
There are strong indications that in the years ahead, ETB will run neck to neck with other industry leaders. Overall, there is a growing confidence in the leadership of the bank by stakeholders. The implication of this is that the bank holds profound prospects for its investors and potential customers in the years ahead.
Another edge ETB and Devcom Bank have is that they still engage in traditional mobilisation for funds from small, medium and big scale savers and other domestic sources. The expectation from this acquisition is a sound, solid and reliable bank where depositors could keep their money and sleep with both eyes closed without any fear of distress in this post-consolidation era. If before capitalisation, ETB was one of the country's 10 leading banks, it would move up, most certainly, after the union, given its visionary management, ownership base and integration with Devcom Bank.
Post-consolidation vision
On its post-consolidation agenda, Adegbola said: 'We are poised to meet the dynamic challenges in the banking industry through greater innovation in our system, services and personnel. We would do so by employing the enormous goodwill we enjoy in the industry and pushing further the frontiers of the bank's efficient service delivery in the coming years to keep ahead of competition."
Since the focus of the new ETB is to be one of the leading banks in the country, providing one-stop financial services in a supermarket form, our source said that ultimately, the bank would go to the capital market in the spirit of local competitiveness and globalisation. ' This is expected to take place before this year runs out", he said.
Among the crop of experienced people that constitute its Board of Directors are its Chairperson, Otunba (Mrs) Yetunde Adegbola. A very successful businesswoman ,well known for her entrepreneurial abilities. She has been the bank's chairperson since inception.
Mr Ike Oraekwuotu,(Managing Director) : A graduate of both Benedict College and Rutgers State University, Newark, New Jersey USA. He is a distinguished banker whose experience span corporate banking, treasury management, corporate finance and banking operations. In 2001, he was named as one of the country's 10 most outstanding bankers of the year.
Dr Mike Adenuga (Jnr): An outstanding businessman and an accomplished manager of men and resources. Adenuga attended the North Western University, Alva Oklahoma and Pace University, New York, both in U.S.A, where he studied Business Administration. He is the chairman of many leading companies such as Globacom, Conoil, Proline Limited and many others.
Mr Niyi Adewumi: currently the Managing Director/CEO of Workspan Holdings Ltd. He is a graduate of Business Administration from the London Central Polytechnic, England.