Bayo Olugbemi is a highly skilled investment professional with nearly 4 decades of experience in the areas of Investment Banking, Portfolio Management, Share Data Management, Securities Depository, Stockbroking as well as Mutual & Pension Fund Administration. I worked at different levels in Union Bank of Nigeria Plc, Rims Merchant Bank Ltd, United Securities Ltd, Diamond Bank Plc (now part of Access Bank Plc) and NAL Merchant Bank Plc (Now Part of Sterling Bank Plc) before joining the First Bank Group in January 2000 as the youngest CEO in one of its subsidiaries i.e. First Registrars and Investor Services Limited (Formerly First Registrars Nigeria Limited).
He is a fellow of several notable professional bodies such as The Chartered Institute of Bankers of Nigeria (CIBN) where he is also the current national president, Institute of Capital Market Registrars (ICMR), National Institute of Marketing of Nigeria (NIMN), Certified Institute of Pensions of Nigeria (CIPN), Institute of Directors (IoD), the Chartered Institute of Taxation of Nigeria (CITN), Nigerian Institute Of Training & Development (NITAD) and Association Of Enterprise Risk Management Professionals (AERMP). He is also an Associate member of Institute of Chartered Secretaries & Administrators of Nigeria (ICSAN), Chartered Institute of Stockbrokers of Nigeria (CIS), Nigerian Institute of Management (NIM- Chartered) among many others.
Mr. Olugbemi has a BSc Degree in Accounting (University of Lagos, Akoka), MBA from Lagos State University and MSc in Corporate Governance from Leeds Beckett University, United Kingdom. He has been privileged to attend Management Training Programs in some of the Best Business Schools in the world; Harvard, Stanford, Wharton, IMD, INSEAD, New York Institute Of Finance, Institute of Directors, UK and Lagos Business School.
In this interview, Mr Olugbemi comprehensively x-rayed the Nigerian Banking sector as regards service delivery, customer experience, innovations, impact on the economy and way forward. The investment guru also highlighted his vision as the new President and Chairman of Council of Chartered Institute of Bankers of Nigeria (CIBN). Excerpts:
What can you say is the force behind your drive?
First, determination is a major drive for me, to challenge the status quo and make things better for all. Despite coming from a very humble background, I was determined right from my early years to become a person of substance and with God by my side, I would say it is a dream being fulfilled. I am not yet there, but I am on the right track, there are still so many aspirations and areas I believe I can still add value and substance both in the secular and spiritual aspects.
What are your visions and plans for the Chartered Institute of Bankers of Nigeria within the space of your tenure?
My Vision for the institute as the 21st President/Chairman of Council is encapsulated in the acronym code named A-TEAM which means:
• A = Accelerated Development
• T = Technology Enhancement
• E = Engagement for growth
• A = Accountability and Transparent Leadership
• M = Membership Drive for Value
To achieve this feat, we would pursue creative and innovative ideas that would transform, project and propel the Institute into global limelight in line with its vision of becoming a global reference point for skills and conduct. This vision will be executed in congruence with the Institute’s Corporate Strategic Plan (2020 – 2024)
To what extent do you think your institute has and can impact banking operations in the country in terms of capacity building?
CIBN is not a Regulator but a Certifying authority of Banking & Finance Professionals. Our Compulsory Continuing Professional Development (CCPD) is a major capacity building initiative and our key value proposition to our members and it is aimed at ensuring members continually update their knowledge and upskill in order to remain relevant in the banking industry. Hence, we pay serious attention to the CCPD programme, ensuring that members take the required CCPD programme and attain the required credit points annually. We have leveraged technology in delivering the programmes for the benefit of our teeming members. Ethics and Discipline are other areas in which we build capacity and we take discipline and ethics very seriously. The Institute prides itself in the observance and upholding of ethics and professionalism. Section 13 of the CIBN ACT provides for the establishment of 2 statutory committees namely: the CIBN Investigating Panel and the Disciplinary Tribunal. The former focuses on investigating any members who have been alleged to have violated the Code of Conduct in the Nigerian Banking Industry and such members could thereafter be referred to the Disciplinary Tribunal. The Disciplinary Tribunal has the powers of a High Court.
Also, the CIBN serves as the Secretariat of the Bankers Committee, Sub-committee on Ethics and Professionalism, an industry regulatory mechanism that adjudicate on cases of customers versus banks or even banks versus banks. The decision of the Committee is binding on the parties and banks abide by the decisions taken on complaints brought before the Committee.
In addition, there is Compulsory Ethics Certification Programme as part of Competency Framework for practitioners in the industry on annual basis. The Institute also initiated a Joint Development of Code of Conduct and Business Ethics with Bankers Committee which covers every employee within the banking industry and has been operational for some time now. The Institute also went into strategic collaboration and partnerships with all relevant bodies to deepen Ethics, professionalism and indeed Consumer Protection. All these we do to entrench and promote Ethics and Professionalism in the industry.
What is your view on the rising complaints against bankers and insider-related loan abuse in the industry?
This happens everywhere, it would not have been a major concern but unfortunately, it has been abused just like you mentioned. I believe there are regulations to limit these activities and more emphasis should be placed on ensuring proper sanctions for erring individuals. On the other, where there is an insider-related loan and it is used for the purpose for which it was taken and repayment done as stipulated in the loan agreements, this may not be an issue.
There has being widespread complaints about incessant and multiple charges by banks. What view do you hold for or against this?
The hard truth is that customers need not be charged most of these fees. We bank in the UK, the US and other developed countries and we don’t experience these charges not even for SMS notifications and ATM card issuance. So I think the banks still have a lot to do in reducing cost of account maintenance burden on the customers if we truly want to achieve financial inclusion. The CBN intervention recently also justifies that some of these charges can be avoided by the banks. Nowadays, we have seen cases where N10,000 deposited in a savings accounts turns out to be less than that amount after 1 year simply because the banks have deducted several charges from the sum. Banks should begin to work around their cost reduction strategies and increase value for their customers.
Do you think bank customers are well treated as supposed?
The banks are trying but then, as long as the customers even if it’s only one customer that complains, the bank must respond appropriately. The customer is king and the customer is always right so as far as the customers are not totally satisfied by with their banking experience, then this should be improved upon by the banks. Also, customers will naturally compare the value they get in return for the charges on them, where there is no balance, customers will feel cheated and underserved. So it is more about creating more value to the customer.
Looking at the recent CBN policies, would you say Nigeria banks are operating under a fair environment?
Definitely yes, the CBN will not sanction the banks unjustly, the CBN role includes ensuring there is an equilibrium in meeting the needs of the banks and the needs of their customers. Policies by the CBN are not to discourage or punish the banks but to ensure fair treatment of the customers and the banks. For instance, when the capitalization was increased, though some banks were affected adversely but the remaining banks became stronger and better off.
How has the pandemic affected the banking sector?
The impacts of the pandemic on the Nigerian banks include; increase in impairment and bad loans, FX scarcity and liquidity squeeze and of course the state of the economy. All sectors of the economy were affected including the secular space and religious organizations. It provides a learning curve for everyone of us and we do hope gradually and with the right structures and government interventions in place, we will recover.
However, in as much as I agree that the Covid-19 pandemic will to a large extent disrupt the banking industry and other financial sector of the economy, I think it is a learning curve for us as a nation. It will help us re-assess our risk elements, it will help us identify our loopholes as businesses and governments, it will help identify areas where things can be improved upon and done better. The pandemic in a way presents its own opportunities; it has its negative sides; businesses will be affected, employees will be affected, and bottom lines will be affected, but at the same time the current happenings will birth new opportunities for growth.
Do you think Nigerian banks are prepared for changes as brought by this pandemic?
The Covid-19 lockdown is an eye opener for many Nigerian banks and it became so obvious that the banks still lag behind on a lot of things and infrastructures. Service failure experience witnessed by a large number of the customers during the lockdown was never envisaged. Immediately the COVID-19 lockdown was eased, the crowd at the banking halls were beyond imaginations largely due to the type of cash economy that we run in this clime. It is therefore an opportunity for players to invest more in infrastructures and innovative technologies that will enhance customers’ experience and bring to the barest minimum cash transactions. The world has gone digital and the Covid-19 has introduced a new normal that will spur the adoption of digital technology and platforms.
Do you expect an increase in non-performing loans in the banking sector as banks increases their loans to SMEs during this pandemic?
It is good to be prepared for such. I earlier mentioned that one of the impacts of the pandemic is the increase in impairment and bad loans. This may not be a deliberate act on the SMEs but again, the state of the economy is a major factor that will worsen or lessen this. We have seen the CBN created several bouquets of interventions funds to ease the impact. Non-performing loans may be on the increase albeit in the short term. Government needs to encourage SMEs and make them stronger, they are key drivers of economic growth.
What opportunities can you say exist for the banking sector amid this pandemic?
A lot of opportunities exist, a lot can be done electronically. A number of the banking services should be moved to the digital platforms. Going digital should also result in a reduction in the bank charges on the part of the customers but the reverse seems to be the case, I should spend less carrying out a banking transaction electronically than going into the banking halls. It is also an opportunity to begin to save cost in key areas. The pandemic made it obvious that the banks can actually survive without many of the meetings and other activities that would have constituted cost areas. Collaborations should be encouraged too. Gone are the days of confrontational competition, now is time to encourage collaborative competition.
What of the risks? No industry or sector of the economy is immune to risk. Cyber risk has been a major threat to the financial services sector and this has been on the increase in recent years despite the risk management policies in place by most banks. This also brings about the issue of fraud. Additionally, technology advancement to an extent may be a risk, we have seen a lot of institutions invest in technologies and after so much investments have been made, new technology render them irrelevant coupled with regulatory policies in some cases.
As Q3 result is being expected, how is the CIBN going to deal with quality of earnings in several commercial and merchant banks amongst others?
Again like I mentioned earlier, CIBN is not a regulator. The best we can do is to study the quality of earnings, appraise them and make recommendations to the CBN and the banks. We will continue to serve as the watchdog
Many disgruntled bank customers don’t know how to lodge their complaints; how can these complaints be presented to the CIBN?
The CBN has created a customer complaints portal for every disgruntled customers which can be accessed here: https://www.cbn.gov.ng/Contacts/Complaints/. Additionally, we also have complaints platforms where bank customers can reach out to us to make their complaints known. But again, since the CBN has created a platform, it may not be significant for CIBN to create another separate portal for the same purpose. We are in full support of the CBN on this knowing fully well the effectiveness of the portal by CBN.
What is your advice for aspiring bankers?
I encourage young professional bankers to aim higher, never to rest on their oars. They should register for and write the professional banking examinations. No knowledge is a waste as they may not know where such knowledge will be needed in the future. I also encourage them to be deliberate about their actions and choice of careers, no career is useless, they should seek divine guidance where necessary. Also, beyond paper qualifications, they should begin to act on the knowledge they have gained so far. What is the purpose of acquiring all the qualifications just to keep in the shelf without making any significant impact out of them? Finally, they should be men and women of integrity and impeccable character.
Your final thought on the current Nigeria economy and post COVID status
I would recommend that more funding should be focused on the real sectors of the economy especially agriculture, transportation, ICT/Digital economy, power etc. My advice would be that application processes should be made easier. More awareness to be created at the grassroots level on how to apply for such funds. For example, trainings/workshops on how to successfully apply for and manage intervention funds should be conducted for Nigerian SMEs free of charge. It is important that we support our businesses every step of the way from the application process to the disbursement and management of the fund. This would ensure that those SMEs accessing such intervention funds have the capacity to manage the loans successfully despite the rough business terrain brought on by the pandemic.