Adesola Adeduntan, the chief executive and managing director of First Bank of Nigeria, talks to James King about his digitalisation strategy and the fight to reclaim the position of Nigeria’s number one lender.

Adesola Adeduntan

Adesola Adeduntan is on a mission to transform First Bank of Nigeria. The country’s oldest lender has, like many of its peers, struggled in an era of lower oil prices. But FirstBank’s trajectory has been hit particularly hard; net profits in 2015 fell by 82%, while its ratio of non-performing loans reached 26% in early 2017. The severity of this impact reflects the bank’s historic exposure to the oil and gas sector, as well as its deep ties to an economy that slipped into recession in 2016.

“FirstBank is probably the only bank in Nigeria that is fully entrenched across the entire economy. As a result, our performance is better aligned with the economy than other lenders,” says Mr Adeduntan.

Retreat from credit

But since being appointed chief executive and managing director of FirstBank in January 2016, Mr Adeduntan has reoriented the bank’s priorities. “Strategically, we have decided to reposition the bank as a transaction-led institution, [which includes] cash management solutions, for example, rather than a credit-led institution,” he says.

This approach is having direct implications for the development of FirstBank’s loan book. “The pace of growth of our loan book will not be as aggressive as it used to be. Having said that, FirstBank will continue to play its pre-eminent role in providing credit both in Nigeria and beyond. We have strengthened our credit risk management framework and practices. And that explains why our non-performing loan ratio has been trending downwards at a fast pace,” he adds.

Digital direction

In tandem, Mr Adeduntan has been pushing ahead with an ambitious digitisation of the business covering both front-end and back-end operations. This includes setting up a transaction processing centre to centralise all the transactions conducted across FirstBank’s extensive branch network. Once this task is completed, a centralised transaction processing centre will be established for the bank’s African subsidiaries. For FirstBank’s customers, this digitisation agenda is yielding positive benefits.

“When I assumed office in 2016, we embarked on an aggressive digitisation of our business locations and customer offerings,” says Mr Adeduntan. “We wanted to migrate our customers away from branches and onto our digital platforms. Today, more than 80% of all customer transactions are conducted via digital platforms, and so far we have been quite successful with this strategy.”

This growing digitisation of FirstBank’s business is being accompanied by the development of its agency banking model. “In 2017 we piloted our agency banking model and we believe this will be quite significant,” says Mr Adeduntan. “If you look at the banking statistics, financial inclusion is very low in Nigeria. Most people are outside the banking system and in order to bank them you need to be able to render products and services that are well priced.”

This is significant because FirstBank has set itself ambitious customer growth targets in the coming years. Tapping into the country’s unbanked and underserved retail segment will therefore be crucial. “We have an ambitious plan to grow our customer base. If we successfully grow our customer base, the marginal cost of serving these customers will be low because we are already paying for the baseline digital infrastructure,” says Mr Adeduntan.

Healthy figures

These and other developments are beginning to bear fruit. In 2017 FirstBank became the first financial institution in Nigeria and only the second in Africa to have issued 10 million cards to its customers. This achievement is just one of many achievements that highlight FirstBank’s shift in fortunes. In the first nine months of 2017, the bank’s return on average equity and return on average assets had both improved from 2016, while profit after tax also increased by 7.8% year on year.

“In terms of our financial performance, if you look at the third-quarter figures from 2017 you will see big improvements. Our cost-to-income ratio is now below 55%, while it was more than 60% three to four years ago,” says Mr Adeduntan.

On these foundations, Mr Adeduntan is looking to the future both in Nigeria and beyond. “Our goal is to establish FirstBank as a pre-eminent financial institution in sub-Saharan Africa by exerting our dominance in the markets outside South Africa. We also need to reclaim the number one position in Nigeria, and we believe we can achieve that.”


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