Michael Larbie, CEO, Rand Merchant Bank Nigeria Limited & Regional Head, West Africa, RMB tells Businessday about the bank’s growth in Nigeria over the years.
Give us an overview of what corporate and investment banking at Rand Merchant Bank Nigeria is and what has been your experience in the past eight years?
Rand Merchant Bank Nigeria is a subsidiary of the Firstrand Group, the largest listed financial services group (by market capitalization) in Africa. As part of the Corporate & Investment Banking division of the Group, RMB leverages a market-leading origination franchise to deliver an integrated value proposition to corporate and institutional clients across Africa. Our deal footprint spans several African jurisdictions and ranges from the funding of key infrastructure, oil & gas, telecoms & technology projects, manufacturing, healthcare & pharmaceuticals and renewable energy projects. We have also led and executed several mergers and acquisitions, debt and equity issuances. We provide a trade finance and transactional service offering to our corporate clients and a leading global markets business. RMB has representative offices and subsidiaries in 10 other African countries, the UK, India, and China.
Since we commenced operations in Nigeria in 2013, we have consistently demonstrated our commitment to the market through the transactions we have initiated and participated in and by our unwavering through the cycle support for our clients. We have established a reputation as an innovative and client-centric bank.
In recognition of these achievements, last year, we were named the Best Merchant Bank in Nigeria for the third consecutive year (2018,2019,2020) and Debt Arranger of the Year by Business Day for the second consecutive year (2019,2020). We also received a Great Place to Work certification in 2019. In terms of market rankings, we moved up from 6th position to 4th position in FX trading, 7th position to 6th position in FX derivatives trading and we were among the Top 5 Capital Importation Banks in 2019. The Bank’s current ratings of ‘Aa-’ and ‘A+’ from Agusto and
GCR were maintained during the June 2020 review. The ratings were accorded in consideration of the bank’s improved competitive profile in terms of profitability and market share as well as its strong asset quality with nil impaired loans from inception to date.
Over the last year, we have concluded landmark deals for Celplas, Emzor, Bank of Industry, Africa Finance Corporation, Dangote, BUA, Seplat, Indorama, Enyo, NSE Demutualization and several of our other clients.
In which sectors of the economy do you have your major investments?
Our client base cuts across all sectors of the Nigerian economy from FMCG, Manufacturing, Technology, Media &Telecoms, Oil & Gas, Agro-Processing, Healthcare & Pharmaceuticals, Services and Infrastructure. RMBN’S client base also reflects the government’s drive to turbocharge the Real Sector, diversify the Nigerian economy and reduce dependence on crude oil. Although our primary focus remains the non-oil sector, we will look at bankable oil and gas transactions as the opportunities arise. Our award-winning Global Markets team provides innovative solutions to our portfolio of Institutional Clients- Banks, Insurance, PFAS, Private Equity, and Asset Managers.
What is your major strength in the industry? How have you handled the competition and what are you doing differently?
We pride ourselves on our solution thinking approach to serving our clients. Our focus on meeting their needs requires us to be creative and resilient as we challenge the status quo. We embrace the power of our collective and work as a team to entrench ourselves with our clients and stakeholders. Over the past seven years, we have created a core client base of local corporates, multinationals and financial sponsors. Using a targeted approach, we have supported our clients through varying economic cycles, and they know they can rely on us to be in their corner.
In addition to our product capabilities and relationships, we pride ourselves on being a “good citizen”. Our adherence to corporate governance and risk management principles, coupled with our strong foundation of regulatory compliance has distinguished the Bank.
In the past six months, RMB Nigeria has won several awards. Please tell us about these awards and what they mean to your bank?
We are extremely proud to be an evolving player in the Nigerian financial industry. The awards are a testament to the hard thinking and innovative solutions we deliver to our clients.
Last year, RMBN was awarded the Debt Deal of the Year at the 2020 African Bankers Awards for the Bank of Industry (“BOI”) EUR 1.0 billion syndicated term loan. RMBN acted as Mandated Lead Arranger, Bookrunner and Joint Underwriter and was instrumental in executing this transaction for BOI amidst strong headwinds from the COVID-19 pandemic and oil price volatility. In addition, RMBN was also awarded M&A Deal of the Year by the Association of Issuing Houses of Nigeria for its role in executing the merger between the Cement Company of Northern Nigeria PLC &Obu Cement Company PLC.
Recently, we were honoured as the most Outstanding Transformation by a Transaction Bank in Africa by MEA Innovative Awards, a testament to our transactional banking services and online banking platform.
We are presently in the first quarter of the year, given regulatory requirements and the macro environment, what new investment strategies have you put in place to meet the expectations of your clients and stakeholders, especially in the post-COVID environment?
Despite the current economic headwinds, we believe the long-term thinking by the government on growing the economy through a renewed focus on the real sector economy and the coordinated and sustained interventions by both the monetary and fiscal authorities will continue to boost the economy and present significant long-term opportunities for RMBN and Firstrand. We are confident that our client acquisition strategy and innovative transactional banking platform will enable us to further entrench ourselves and increase our share of wallet.
We remain optimistic about the economy and we expect to see an uptick in business activities as the impact of the COVID-19 pandemic decreases on the back of the ongoing efforts to combat the virus and the various stimulus interventions being deployed by the government.
Where do you see your bank in the next five years?
We see a bright outlook for the banking sector in Nigeria with Merchant Banks presented with an opportunity to work together to better define our role in the Nigerian banking sector and deliver superior value to our clients. RMBN will continue to support its clients by developing new products and investing in new capabilities and platforms. We expect to consolidate our client relationships and position ourselves as trusted, hard thinking, and solutions adviser and financier. We look forward to deepening our partnership with clients and stakeholders and to remaining integral to the Nigeria growth story.
Given the significant part RMBN undertook with the NSE Demutualization process and its recent completion, what does it signify for Nigeria?
It is a big milestone for the NSE as it joins other exchanges worldwide that have been demutualized. But more importantly, it allows the NSE to further pursue its strategic thrust of becoming one of the globally recognized platforms. Demutualization allows the NSE to modernize and entrench its corporate governance processes, which should help with decision-making and assist in making the NSE platform more attractive.
Typically, demutualized exchanges often tend to be more transparent and efficient, they attract more stocks to trade on their platform. The demutualization is the first step in a journey of the exchange becoming publicly traded and having a more public-oriented board that allows them to be nimble and react quickly to changes in the economy.