An interview with Segun Agbaje

Another recognized Game Changer in the financial world this month is Segun Agbaje, Managing Director and CEO of Guaranty Trust Bank PLC. Segun talks to Finance Monthly about the banking sphere in Nigeria and his firm’s biggest achievements since its beginnings in 1990.

What were some of Guaranty Trust Bank’s major achievements in 2015?
Growing our retail business and strengthening our market leadership. We also started to make strides in building the SME business with the aim of growing this business segment in a sustainable manner that is not driven by profits but with a focus on empowering our customers. The number of businesses registered on the SME MarketHub (an online e-commerce platform that allows business owners to create online stores to sell and promote their offerings to millions of buyers online), increased significantly as more people continue to adopt e-commerce. We also extended our mobile banking offering with the launch of our “Bank 737” – a payment solution that allows our customers that have both smart and nonsmart phones, to transfer money to any bank account in Nigeria, buy airtime, pay bills, link their Bank Verification Number (BVN), and check account balances using their mobile devices; without the need for data. Within a year of the introduction of our “Bank 737” offering, we have recorded adoption of this service channel by 1.5 million customers, over N1 trillion in transactions via the platform and an average monthly growth rate of 100,000 new users.

Guaranty Trust Bank was founded in 1990, and has since weathered the 2007 economic crisis. What enabled the bank to still manage to expand during this period?
Prior to the 2007/2008 economic crisis, we had just raised over $825million in equity capital from both the foreign and domestic markets. This meant that we had enough capital to continue to support business expansion. We also had a very strong credit culture and this ensured that NPLs were low; profitability was also very strong to absorb any potential losses.
What were Guaranty Trust Bank’s beginnings and how did it develop into the organization that it is today?
We started business as a high-end wholesale bank with 42 investors. The Bank was founded by two investment bankers with a vision of building an institution. So, the vision was always to create an institution that could operate anywhere in the world. Integrity and ethics was the bedrock of the organization. To de-personalise the organization, the bank listed by introduction on the Nigerian Stock Exchange (NSE) in 1996. Also, to further strengthen corporate governance and imbibe best practices, the bank listed on the London Stock Exchange (LSE) in 2007. Overall, I think you can say that it is the continuity in visionary leadership that has made the organization what it is today.
As business moves even further online, are you finding that customers are increasingly looking for mobile services?
Absolutely! Not just the customers but also the Bank, as more straight-through processing can be achieved online – making us faster and more efficient. E-banking and E-payment platforms haven’t just rapidly expanded in size and scope over the last couple of years, they are now critical to Nigeria’s efforts to building a strong and modern economy. The cost-efficiency, breadth of product offering and ease of personalizing service make leveraging online platforms compelling and unavoidable for forward looking organizations.
Guaranty Trust Bank has over 10,000 employees across various countries – how is the structure of the company put together so each arm works cohesively?
Structure informs behaviour. Hence, we maintain a flat structure which provides opportunities for growth. As a bank with cross-border operations, we have a Division that monitors the performance of the subsidiaries to ensure uniformity in corporate work ethic, business goals and strategic objectives. Periodic intra-company training and capacity development programs assure the assimilation of the parent’s culture across all our subsidiaries. A young and vibrant team also makes us nimble and more adaptable.
What potential for growth do you see in the rest of Africa and beyond into the UK and Europe? Is this a major market for you?
As a proudly African institution, Africa remains our market. We are currently in 8 African countries and with expected GDP growth of over 5% in many African countries, we still see opportunities for us to grow our franchise across Africa. Far East is also a possibility for us in terms of growing our franchise. UK & Europe will be more about connectivity and private banking and not necessarily a frontier for growth.
Looking into 2016, what do you anticipate for the Bank?
2016 is expected to be a challenging year in view of the drop in oil prices and even in developed economies, there is BREXIT and other economic issues to deal with. However, we see things a little bit differently. While we admit that there will be challenges, we also see immense opportunities for growth. According to the March 2016 subscriber statistics by the Nigerian Communications Commission (NCC), we have over 148 million mobile phone users in Nigeria and, going by the Bank Verification Number (BVN) data, we have just about 24.5 million bank customers. Ours is by no means a mature market as banking penetration is still at its infancy and this presents immense opportunities for us.
We will grow our retail and SME businesses and continue to drive innovation within the payment space to create superior experience and more meaningful relationships with our customers.