Sebastian Adigwe Group Managing Director of Afribank

Afribank Group’s Managing Director explains how consolidation has aided the bank´s organic growth

Nigeria achieved the amazing feat of consolidating the whole sector in less than eighteen months. As a banker, how do you view this consolidation process, and how has Afribank emerged from it?

The interesting thing was that at the time, bankers said it would be impractical given the timelines set. They didn’t say it was impossible, but they said it was impractical to achieve it in eighteen months. Given the number of banks in existence at the time – there were 89 – and that the level of capitalization of each bank, on average, was between 3 billion naira and 5 billion naira, and that we were meant to grow from that to 25 billion, more or less a four-to-seven hundred percent increase, there was considerable skepticism. But then, as this was not just about recapitalization but also about consolidation, banks were able to pool their resources, which was what eventually saved the day. And that is how the sector was whittled down from eighty-nine banks to the twenty-five we have today.

More foreign investors are being drawn to Nigeria, and will therefore need a strong banking partner on the ground. Why would they choose Afribank?

Afribank Capital Markets, in addition to being active in the capital markets, also have a very high-quality and experienced advisory team. Using that platform we can play a substantial role in terms of advising, but also in terms of promoting any business. They are very well versed and equipped to handle that role. But the commercial bank can also play a key role, as we operate accounts worldwide and can therefore help to intermediate financial transactions across the continents.

How can Afribank help foreign investors establish themselves in the Nigerian market?

The depth and breadth of our network will extend significantly over the next five years, so we can help foreign clients penetrate the Nigerian market.

To what extent would Afribank be open to a partnership or joint venture with a major international financial institution?

We are very open to partnerships – with the right kind of partner, of course. This would help the bank, as well as help the Nigerian economy achieve its objectives. So we have been talking to various investors.

How rewarding is it for you personally being the Group Managing Director of Afribank?

I would say that, so far, most of the objectives we have set for ourselves under my tenure have been reached. Those objectives were primarily to achieve organic growth and change the face of the institution within the banking community. Our mission is to bring out that value. For instance, we have invested in a very important oil and gas services firm, African Petroleum (AP). We have an excellent relationship with AP, and they give us most of their business. When that investment was made, it was at 55 naira per share, and today the shares are worth over 150 naira, and we have not even taken the income into the bank. So these values are not yet reflected in the balance sheet. We have close to one hundred and fifty million shares in AP, so you can see the kind of unrealized income we are talking about. I believe that, generally speaking, the public feels we are beginning to bring out the implicit value of the bank.

How would you describe your management philosophy and style?

I have been in banking for twenty-two years, and all through my career I have been an all-rounder. I was a marketing officer for half that time and then a risk manager for the other half, at the highest level. So I have brought operational and risk-management experience to Afribank, giving me a sound overview of the entire institution, which has allowed me to balance issues, and inculcate the right discipline throughout the bank. The challenge is to balance the eagerness of the marketing department with required and standard risk management guidelines, but these are principles well ingrained in the Afribank procedural culture and that is how we will continue to achieve sustainable growth and great customer service.