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FBN Holdings focuses on synergies, efficiencies, and good corporate governance | World Finance - YouTube
Channel: World Finance Videos
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World Finance: FBN Holdings is one of the
foremost pan-African financial institutions
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in sub-Saharan Africa.
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UK Eke, its Group Managing Director, joins
me now.
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UK, you assumed office in January 2016; tell
me about the company's journey up to then.
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UK Eke: Let's step back and look at 2012.
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We took a decision to ring-fence the commercial
bank, and hive out all the non-commercial
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bank activities into a holding company.
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And the holding company is now the listed
entity.
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From 2012 to 2015, the focus was really around
laying the building blocks; creating the policies
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and then the framework.
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So when we took over in 2016, it was around
building the super-structure on that solid
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foundation that had already been laid.
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And we made three commitments.
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One was to drive efficiencies.
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And we just recently got approval from the central bank to implement our group shared services.
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Now the commercial bank, First Bank of Nigeria,
will be the centre of excellence, and render
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services to the other operating entities – at
a fee, of course.
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And so through that, we expect to drive down
costs.
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We've already seen it trending down, and in
absolute terms we're seeing costs dropping
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below the inflation rate.
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And in some cases, even well below what it
was for prior periods.
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So we are optimistic that the cost-to-income
ratio will continue to trend downwards.
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The second was to extract synergies.
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I have to confirm that we have seen year-on-year
growth in the synergy numbers.
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As a matter of fact, we've achieved over 100
percent growth in the synergy revenue numbers
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year on year.
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And the third was to increase the contribution
of the non-commercial bank businesses to group
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revenue, and of course profits.
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And I think over the last three years we've
done a great job delivering that commitment.
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I have to say that the insurance company,
just to give you a sense, grew over 50 percent
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just in one year.
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And we're seeing return on equity north of
40 percent year on year.
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So these are excellent results we've achieved
over the last three years, and I think the
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shareholders should be proud of the decision that was taken to restructure through a holding company.
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World Finance: World Finance has awarded FBN
Holdings Best Corporate Governance in Nigeria
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for 2019 – how important is world-leading
corporate governance to the group?
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UK Eke: Well, at FBN Holdings, we hold the
view that there is a direct positive correlation
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between corporate governance and financial
performance of institutions.
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And so that is why over the last 100+ years
we have entrenched corporate governance in
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operations across the operating entities.
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Now, if you check the local bourse, which
is the Nigerian Stock Exchange, we are one
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of the four listed entities on the elite board.
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And what that tells you is that, unless you
adopt and subscribe to the best code of corporate
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governance, you will not get onto the premium
board.
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We're one of the four.
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Now, receiving this award from World Finance
basically tells us two things.
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One: it's an affirmation of what we are doing
in corporate governance, beyond the giant
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strides we're making in financial performance.
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So we see this as an endorsement of the brand,
and it's a bragging right for us.
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Because again, there are very few institutions
in Nigeria that have benefited from this award.
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We are truly proud to receive this award.
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World Finance: And what does the future hold
for FBN Holdings?
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UK Eke: The future is bright.
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We think that the successes we've recorded,
which we're celebrating this year, will be surpassed.
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That in the years to come, as we hand over
to the next generation of managers, they will
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be inheriting a very strong institution, a
solid institution, and therefore the accolades
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will get even louder than what we are hearing
today.
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We are proud of our accomplishments, and so
the future definitely is bright for this great institution.
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World Finance: UK, thank you very much.
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UK Eke: You're welcome.
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Thanks for watching.
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Click to find out more about FBN Holdings'
flagship brand, Firstbank, which is celebrating
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125 years of operation.
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Learn more at fbnholdings.com, and please
subscribe for the latest international business
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insights from worldfinance.com
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