One year after Timothy Oguntayo became the Group Managing Director/Chief Executive Officer of the Skye Bank, he has recorded some giant strides, chief among which is the acquisition of Mainstreet Bank Limited, a move, analysts believe, will better position Skye Bank among the top six mega banks in the country. In this interview with Ibrahim Apekhade Yusuf, he speaks on the new status of the bank, challenges and prospects in the banking sub-sector in general, his management style, to mention just a few. Excerpts:
Update on Mainstreet acquisition
We just carried out the acquisition of Mainstreet Bank Limited. By that acquisition, Skye Bank is now positioned to become one of the top mega six banks in the country.
In our new status, we will be placing great emphasis on retail and commercial banking ultimately to ensure the growth of healthy deposit mix. Our new business strategy will also allow the bank to reduce the volume of public sector deposit and term deposit at its disposal for enhanced profitability and business sustainability.
The acquisition of Mainstreet Bank has helped create synergies between the two banks. Considering Skye Bank’s competitive edge in the industry, we hope to leverage on this to deliver quality customer service and high returns to our shareholders.
Besides, I can assure that the acquisition would help Skye Bank optimise cost, invest heavily on information technology, as well as pursue aggressive expense control.
The mergers of both banks would be as seamless as possible. Within the next few months, we hope to put measures in place to further grow our balance sheet as well as create value for our shareholders.
Building relationship with investor stakeholders
We hope to place emphasis on building more synergies of cooperation, which is why I think our interface and discussion session with stockbrokers group and other stakeholders in the capital market is very timely. It is a very good forum and opportunity for us to share information on what we’re doing at Skye Bank. The questions raised are very relevant. I think it has also shown to us that the market is yearning for information and it is ready to invest in our business so long as they get the right information.
The great lesson here is that if we reach out to the market, they are willing to accept us and that gives them the opportunity to have access to the genuine information about Skye Bank.
What we have seen in the past is that people speculate about what’s happening at Skye Bank and I won’t blame them because we had not reached out to the market as much as we should.
Going forward, we will do more of these. One of the things we have observed is that the market is very receptive to the acquisition of Mainstreet Bank by Skye Bank. We see a lot of values and that also reinforces our conviction in going to that acquisition.
Challenges in the banking sub-sector
The banking sub-sector experienced some turbulent times last year, considering the deluge of regulations from the regulatory authority. The CRR was increased, among others. Some of the policy initiatives in place are skewed in favour of foreign banks, such that the foreign banks will be coming to take business from Nigeria banks. The only way we can move around it is to form alliances…So banks that have the ability to spot deals and package then can succeed.
Managing credit crunch in the
system
One of the things you notice in an uncertain environment like ours is to be cautious. We are going to be cautious of those accessing loans until we see a clear direction beginning from after the election and then see how the oil prices volatility will get to, it will be difficult to take some credit decision. But we will not fold our arms, we will continue to support our customers, especially those already in our books. We may not take on new gigantic projects for now. But we are working and making sure we meet all our regulatory requirements issued by the CBN from time to time.
As a responsible corporate citizen, we will always comply with regulations from the apex bank.
Innovation by Skye Bank thus far
At Skye Bank, we are strong on innovation. We are probably the first bank in the country to come up with the customer service charter, which we have since documented at the Consumer Protection Council. Even an independent body, KPMG, also certified it to be unique in the industry. We have been commended from various quarters for this particular innovation.
In preparation for our mega size, we have invested heavily in ICT. To grow our deposit base, we also introduced direct sales agents, who are not full staff but are placed on commission depending on what they bring into the table. Through that, we were able generate over N2.5billion between September last year and December. We hope to leverage on this going forward. We plan to go to the market to improve on our capital adequacy ratio.
Management style as GMD/CEO one year after
At the risk of sounding immodest, I can say we have not done badly thus far. Well, for me, I believe leadership is by example. That’s the best way to go. What you say, you do it. What you want people to do, you do it. You’re transparent, open. We have an open-door policy at Skye Bank. You can join the bank yesterday, if you need to see the MD, you can see him. If you need to write an email to the MD, you don’t need protocol; you can write. Even if you’re a contract staff, you have access to the MD. And it has helped because some suggestions come from very low level staff and if you shut yourself up as the boss that only staff of certain grades can interface with you, then you will be losing quality advice and suggestions which could help grow the fortunes of the business ultimately.
As I said, I like to lead by example. I mean it’s not through what I say and not what I do, because what you preach you must do. Okay, if you want people to be up and doing, then you also must be up and doing; you want people to be professional in what they do, you also need to be professional yourself. I maintain an open access, staff from all cadres of life from the most junior have access to me, phone, email whatever and whenever, and I encourage free flow of communication.
You know like parents telling their child don’t lie, but you are lying in front of your child, he is going to believe what you do more than what you say, you know; so that’s my philosophy in life. You must be a practitioner of what you say, and I think with that there should be no problem.
Staff motivation
Well you know motivation is a two-way thing, how do you motivate your staff to do better, how do the staff motivate the bank to do better? I think one of the things we will do or we have started to do is ensure we reward performance. All of these things boil down to performance, if staff perform at the optimal level, the bank will make profit, then the ability to pay better salary, the ability to pay bonus and the ability to take care of the welfare needs of the staff is a lot better. Recently, we have reviewed our salary package and we have announced that to the system. A number of people that were due for promotions have been announced; we have also introduced some extra welfare packages to our staff.
But that’s the first step. The second step is also to ensure that the reward system is transparent, effective, therefore if there are three or four of us, it should be clear to see who is performing and who is not performing. So that the day you want to reward either by monetary compensation or by promotion, it should be obvious to all of us. I mean nobody would want to admit that he is not a performer, but within his heart he should know that ‘oh this guy is a better performer than me.’ So that’s what we will do; we will make sure that our reward and appraisal system is open and transparent, and then the reward is also given on timely basis.
Performance-oriented
What we do regularly is that at the beginning of every term, we set the benchmark for performance. We let you know what you’re supposed to do and then we measure you in a very open and transparent manner. So, you know yourself whether you’re performing or you’re not performing.
And since this is a business, if you have a staff that is not performing in spite of all the support, then, of course, you part way in a friendly manner.
But what we also do is to train people. We train them, we expose them. We coach them. We get senior people to go out with them from time to time so that they can learn how to do these things. And if they come across a business that may be because of their level, they need to go with senior people, the senior people will go with them. So, we give them all the support that would let them perform. But you know sometimes you do all of these things, it doesn’t work in few cases. Of course, we’re in business to make money. So, we need to bring in fresh blood into the system.
