History is full of prominent individuals who hated banks and bankers passionately. The great Greek philosopher Aristotle, who lived between 384 BC and 322 BC, said about usurers, the banks of his day: “The trade of the petty usurer is hated with most reason: it makes a profit from currency itself, instead of making it from the process which currency was meant to serve. Their common characteristic is obviously their sordid avarice.”
French Emperor Napoleon Bonaparte, considered one of the most brilliant individuals in history, who lived between 1769 to 1821, expressed a similar opinion about banks when he said: “Financiers (bankers) are without patriotism and without decency; their sole object is gain.”
Banks, however, play a critical in the society. If anyone had any doubt about the great role banks play, the recent series of syndicated loans arranged by Nigerian banks for major employers of labour in the Nigerian economy underlines the critical role of banks in supporting economic growth and wealth creation. Basically, without banks many of the big firms we see today will not exist. The big firms are able to expand their businesses, employ more people and produce more goods and services because banks give them the money to do that.
“The principal and primary function of banks is to serve as middlemen in the making of payments. In so doing they transform inactive money capital into active, that is, into capital yielding a profit; they collect all kinds of money revenues and place them at the disposal of the capitalist class,” writes Vladimir Ilyich Lenin, in his paper “Imperialism, the Highest Stage of Capitalism”.
Herein lies the challenge of banking – that sometimes it serves the interests of capitalists at the expense of the larger society. Banks sometimes get carried away supporting only those who have the means to borrow and leave out the larger segment of the society without the means to do so; hence the need for regulators in the banking system who sometimes intervene to get banks to also support other vulnerable sectors of the economy and control their tendency to exploit vulnerable members of the society. But sometimes even regulators become either captive to bankers’ power or fall behind the curve in getting banks to do good banking.
The media, as an impartial arbiter in the society, can help bridge this gap by creating a positive incentive for banks to behave well. This is why in many developed societies the media has always instituted an award for the banking industry in a bid to encourage banking that actually supports economic growth. This critical role of the media in creating an incentive for positive banking has been missing in Nigeria until now.
As such, BusinessDay will on June 7 recognise Nigerian banks that have been outstanding in supporting economic growth in Nigeria. This is an addition to long-established BusinessDay annual banking conference which examines critical issues facing Nigeria banking and proffers solutions. The awards have been instituted as a credible way of rewarding banks that are supporting economic growth in Nigeria without putting at risk the financial system. They thus serve as a positive incentive for banks to support the economy in a credible manner. This is why the categories and the criteria have been carefully considered to support real banking and recognise banks that have adopted best practices in banking service delivery.
There are 10 different categories for the BusinessDay banking awards. The categories include: Bank of the Year, Bank CEO of the Year, Bank Deal of the Year, Most Innovative Bank Product of the Year, Best Bank in Support of Agriculture, Best Bank in Support of SMEs, and Best Bank in Support of Manufacturing. Other categories are the Most Customer-friendly Bank award, and Leadership and Achievement award in the banking industry. There will also be special recognitions to be given to individuals and businesses that have had a significant impact on the Nigerian banking industry.
For the Bank of the Year award, the criteria include timeliness of release of financial results, availability of financial results on bank’s website, availability of analyst presentation on bank website, loan growth, loan/deposit ratio, growth in deposits, capital adequacy ratios, non-performing loans ratio, profit before tax, and growth in total assets. For the Bank CEO of the Year category, the criteria include profit before tax, return on assets, return on equity, growth in total balance sheet, and share price appreciation.
For Bank Deal of the Year, the award judges will be looking at the biggest and most impactful bank finance deal in 2012, while for the Most Innovative Bank Product of the Year, the award judges are looking at a unique product that not only eases banking transactions but also has the greatest potential for financial inclusion.
In the other categories like the Best Bank in Support of Agriculture, Manufacturing and Small and Medium Enterprises (SMEs), the judges are taking in nominations from the operators in the specific industries through their associations and non-governmental organisations (NGOs) working in the field. The most customer-friendly bank will be picked based on respondents’ choices to an on-going survey on bank customer satisfaction by BusinessDay Research and Intelligence Unit.
The Leadership and Achievement awards will be given to an individual or individuals who have had a revolutionary impact on the Nigerian banking industry. For this category, the winners will only be revealed at the awards night on June 7, 2013.
For information on the BusinessDay Banking Awards, send a mail to [email protected]/en or call 08185193932.
ANTHONY OSAE-BROWN
Editor, BusinessDay Research Unit
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