Globus Bank Limited, a newly licensed regional commercial bank, plans to raise as much as N50 billion in the next 12 to 18 months as it takes steps towards becoming a national bank, according to Elias Igbinakenzua, managing director/CEO of the bank.
“Obtaining a national banking licence was always the play and while we have enough capital to obtain one now, we still plan to raise an additional N50 billion in 12-18 months,” Igbinakenzua said in an exclusive interview with BusinessDay at the bank’s Victoria Island, Lagos office.
The confidence of existing shareholders in the bank’s business model and management structure means a capital raising exercise will be relatively straightforward, according to Igbinakenzua, a former executive director at Zenith Bank and Access Bank.
Some of the bank’s existing shareholders include Austin Okere, founder of cloud services provider, Computer Warehouse Group, and Isioma Ezeachi, owner of indigenous engineering firm, Sermatech Ltd.
Globus will target the underserved and unbanked with its innovative products in a bid to bridge a yawning gap in financial inclusion.
“In a market where about 40 million people are financially excluded, there is an opportunity for us to go where the big banks are afraid to tread,” Igbinakenzua said. “The fintech companies have shown that there is a massive loan deficit in Nigeria and that’s going to be our focus.”
Igbinakenzua roughly valued the retail loan deficit market at over N2 billion in conservative terms.
Prior to its official launch on November 1, Igbinakenzua said that Globus has already opened 200 accounts and that within the next five years, it would have opened 24 branches across the country.
The adoption of technology will play a big role in the bank’s future growth.
Asked whether the new CBN rules such as the minimum 65 percent Loan to Deposit Ratio (LDR) and the ban on some firms from high-yielding Open Market Operations (OMO) bills would spur lending to the economy, Igbinakenzua said the CBN should be given some credit for trying to reverse government crowding out of the private sector.
“OMO bills should not be an investment option for the public. It is a tool used by the CBN to control liquidity, so preventing non-financial institutions and some individuals from playing in that space is the right thing to do,” he said.
He said the rules are a laudable step but much would depend on the way it is managed. He added that the regulator wants banks to be more rigorous in accessing credit-worthy customers so as to mitigate the effect of bad loans.
“We have five banks controlling 60 percent of deposits and their sheer size is breeding complacency,” he said. “Some of these banks don’t need to take too much risk to turn fat profits and that isn’t helping the economy. We must find a sustainable way to lend to the real sector and play a viable role in jumpstarting the economy.”
Commenting on the evolving banking landscape, Igbinakenzua attached particular importance to the increasing role of technology.
“We are entering into the fourth generation era, and in the next five years, we will see only the players who are able to embrace technology survive the evolving business landscape,” said Igbinakenzua.
BALA AUGIE & LOLADE AKINMURELE
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