Tag: Offshore

Many banks are deepening their presence abroad after meeting the N100 billion minimum shareholders’ funds required by the Central Bank of Nigeria (CBN) to operate offshore subsidiaries. To FirstBank, GTBank, Skye Bank, Access Bank and Diamond Bank, among others, providing banking services abroad is not only a show of strength, but   an expansion of brand promise, writes COLLINS NWEZE. 

Nigerian banks made history in the post-consolidation era. They were counted among the first 1,000 in the globe, with many going into offshore expansion in key economies of the world. Banks’ vaults were breaking with excess funds realised from public offers and huge liability base created by renewed confidence in the sector.

Since the 2005 consolidation era to date, lenders are opening foreign operations to show their strength, class and opportunity in serving the unbanked across regions.

The Central Bank of Nigeria (CBN) had set N100 billion minimum benchmark for a bank’s offshore licensing, in order to ensure that only highly liquid lenders operate offshore units. The Capital Adequacy Ratio (CAR) for banks with offshore subsidiaries is 15 per cent minimum requirement, which rose to 16 per cent by March 1, last year for Systemically Important Banks (SIBs).

Managing Director, Financial Nigeria International, Jide Akintunde praised moves by the banks, saying  big lenders create multinational companies.

He explained that the Standard Bank, Citi Bank, Stanbic IBTC Bank and Ecobank are some of the few international banks with subsidiaries in Nigeria that have demonstrated that it pays to have offshore operations. These banks are not only spreading across the country, they are also capturing key businesses.

But others are learning fast too. Guaranty Trust Bank is in more than five countries, including the United Kingdom  (UK) while Union Bank is in the UK, South Africa and Ghana. Others are Diamond Bank in the Republic of Benin, Access Bank in the UK and Ghana; Zenith Bank also in Ghana and the UK to mention, but a few.

FirstBank is one of the lenders deepening its African footprints and has completed integration of new subsidiaries in six African nations. Leveraging on the experience that has spanned over a century of dependable services, the lender has continued to build relationships and alliances with key sectors of the economy.

As the global operating environment evolves, it has kept pace, responding to the dynamic needs of its customers, investors, regulators, host communities, employees and other stakeholders.

Through a balanced approach to plan execution, it has consolidated its industry leadership by maintaining trans-generational appeal. Thus, the bank has continuously boosted its customer-base, which cuts across all segments in terms of size, structure and sectors through expansion to six Africa countries.

FirstBank has its footprints in the UK and France through its subsidiary, FBN Bank (UK) Limited with branches in London and Paris; and in Johannesburg, Beijing and Abu Dhabi with its representative offices there.

In October 2011, the bank acquired a new subsidiary, Banque International de Credit (BIC), one of the leading banks in the Democratic Republic of Congo.

In November 2013, FirstBank acquired ICB in The Gambia, Sierra-Leone,  Ghana and  Guinea, and in 2014, the Bank acquired ICB in Senegal. The unveiling of the FBNBank Senegal refreshed brand identity in January this year. It is a major landmark in its plan for growing its sub-Saharan African footprints and the banks have all transited into FBNBank in their respective locations.

Speaking on this development, the Group Managing Director/CEO of FirstBank, Dr. Adesola Adeduntan, said the lender’s expansion into the Sub-Saharan Africa markets clearly aligns with “our strategic ambition to steadily broaden and build a more diverse footprint across Africa”.

“We are committed to developing a multi-local business model that broadens our geographic revenue base while providing bespoke financial services solutions across the value chains of our customers with cross-border financing needs,” he said.

The bank’s Group Head, Marketing & Corporate Communications, Folake Ani-Mumuney, said the lender is well-diversified, maintains the leading position in many of the markets in which it operates, and has a leading distribution capability and a well recognised brand with a large customer base.

“With over 800 business locations in Nigeria, all on-line and real time, the Bank has one of the largest domestic sales networks in the country. As a market leader in the financial services sector, FirstBank pioneered initiatives in international money transfer and electronic banking in the country, serving more than 10 million customer accounts,” she said.

She explained the lender’s  strategy has been focused on restructuring the business to take advantage of growth opportunities within the industry, pursuing business line expansion across strategic business units, continuously implementing a systematic international expansion plan, sequencing its growth initiatives across defined metrics, as well as building synergies and cross-selling across the FirstBank Group.

“This strategy supports the bank’s vision of being the leading sub-Sahara African financial services group. Continued implementation of this strategy will produce long-term profitable growth as well as build great franchises and deliver value to all stakeholders. The focus of the bank in terms of international expansion remains the financial services markets in sub-Saharan Africa,” she said.

Skye Bank Plc led by its Group Managing Director/CEO Timothy Oguntayo, introduced a funds transfer service within its network of subsidiaries in Nigeria, The Gambia, Sierra Leone and Guinea to boost trade and facilitate payment in the West African sub region.

The new funds transfer service, known as African Payment Service, is available in all the bank’s branches in Nigeria and in the countries where it has presence, and is open to both account and non account holders.

The bank said the new offering is convenient, secure, cost effective, fast and reliable, adding that the service enhances the security of the transfer via the use of scratch cards.

Former Executive Director of Bank PHB, Richard Obire, said offshore banking comes with certain benefits such as opening up of the banking industry to national and pan-regional players. He predicts that despite the pressure from the CBN on the banks, competition in the operating environment enhances local banks’ commitment to providing relevant banking products and strong local service.