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We’ve processed over 10,000 loan transactions – Sterling Bank CEO, Suleiman

Mr Abubakar Suleiman is the Chief Executive Officer of Sterling Bank Plc

Mr Abubakar Suleiman is the Chief Executive Officer of Sterling Bank Plc. In this interview, Mr Suleiman speaks on the bank’s handling of non-performing loans, its pacesetting initiatives to drive growth in Nigeria’s agricultural sector, its involvement in oil & gas and how it has made the BRT scheme in Lagos State a business success, among other solutions.

 

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What have been your achievements as CEO of this bank?

We have existed as a bank since 1960 and by inheriting a company with such history and pedigree, my job was already half done. To that extent, I have had a very smooth transition.

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Besides, I have been part of this organisation for over 15 years and when you have been around that long, you will fully understand the strength of the franchise, know the people and customers, and to a large extent, understand the market. So, when I became the CEO, there wasn’t any major earth-shaking or ground-breaking change in the volume of the job that needed to be done by me.

In terms of accomplishments, we have become a very strong talent magnet. We have been able to attract some of the most competent and capable people across the industry, both locally and internationally. We have seen quite a number of people actually relocate back to the country to work for us.

We have also attracted a lot of talents in the youth space. Young people who would ordinarily prefer to work for start-ups or a Fintech are now increasingly joining us. And that is because we have been able to communicate what we want to achieve with clarity. We have been able to demonstrate that the work we are doing has an impact and will connect with what is meaningful.

Our major achievement is the talent we have attracted. When we have really good people working together, it is inevitable that we start to see results immediately. We published our numbers in the last quarter. The positive result demonstrates a significant improvement in our capacity to attract not only the right talent but also the right customers and we have a duty to serve them better.

What about the challenges?

The number one challenge that we face is time. When you have an audacious plan, along with goals that are transformational, the issue that usually arises is how to deliver within the time frame.

While we are progressing, I am impatient because the future we are trying to crack as an institution is important, not just for the direct stakeholders of Sterling Bank but also for the stakeholders in the economy at large.

The speed at which we can deliver some of these outcomes is relevant for growth as well as for employment, and for the rebuilding of this country to be a much more inclusive nation.

The bank once hinted that it was open to acquisition. Any update?

As an institution that has had its own fair share of mergers and acquisitions, we understand the opportunities and recognise the challenges that come with such aspiration. An acquisition has to be opportunistic, meaning that all of the variables, including the macro variables, have to line up in your favour. There are certain environmental variables that will make an acquisition difficult. The specific issues around the target have to be right. We are not willing to make an acquisition that won’t lead to a significant improvement in the quality of our institution.

To that extent, we won’t say the opportunity for acquisition is something that is completely off the table. Let me just say that right now, given how powerful our growth trajectory is and how strong our emerging culture has become, we are very reluctant to dilute that. We are, therefore, very careful in making choices regarding a merger or an acquisition.

In its 2018 half-year report, the bank’s income rose by 29.1% with 54.8% reduction in impairment charges. What happened by full year?

There were no major deviations from the target that we set for ourselves, with the growth trajectory consistent for the rest of the year.

There are rising cases of non-performing loans. What has been your’ bank’s situation?

Your observation is consistent with any economy going through a downturn. Nigeria had a recession and that meant major customers operating within the Nigerian economy were affected and were not able to meet their obligations.

Our own experience has been that we have had to write off some credits that didn’t do very well. Some of the customers are now in a position to either go back to business or begin to repay their obligations. The impairments that you see will eventually be repaid  – at least, some of them.

What role is the bank playing in the oil and gas industry?

We have a significant (loan) book in the oil and gas sector. We have invested in lots of major oil projects. We have seen good results in oil output. Players in the sector are delivering more on the assets they have acquired than the previous owners did.

We have also supported the downstream sub-sector, especially when there was difficulty with the supply of petroleum products. We supported a lot of companies until the government was able to take up that responsibility.

What is the bank’s branch network?

We are just under 200 branches right now. We have plans for expansion in 2019 and to extend our reach to some rural communities where we feel banking should reach, using our agent network. We also have plans for new branches in some important locations and state capitals where our presence is required.

The Specta is your online lending platform advancing loans to many consumers. What is the drvier of this platform?

Specta, as a credit platform, has actually disbursed over N6 billion in its first phase and also processed over 10,000 loan transactions successfully within the time frame. We are working to expand the scope of the Specta platform and the customers it can serve.

The Specta platform was established to address the problem relating to the length of time it took customers to access loans and the complexities involved, as well as the cost incurred by the bank to process credit. As a result, many people were not getting credit, or it came too late for them.They ended up going to lenders with very high interest rates whenever they needed credit urgently. None of these scenarios are acceptable in today’s world. So we decided to do something about it.

What we did with Specta was to digitise the whole lending process and gain access to all the data needed about a customer. We then worked on the credit system which allowed us to know the creditworthiness of the customer and to integrate it with the credit bureaux.

We were able to check the current status of our customers and then take a credit decision on the spot. We have been able to avail credit in less than five minutes to people who had good credit profiles and were eligible to access credit. On the other hand, we rejected the requests of those who could not meet the credit standards.

This is an innovation that was aided by technology, not just to provide convenience to our customers or reduce the cost of credit, but most significantly, to reduce the velocity of transactions and to enable growth.

The more we are able to provide credit, either to individuals or to small and medium scale enterprises (SMEs), the more they are likely to consume or produce, and the more we are likely to have economic growth.

The platform has aided our desire to play a role in the emergence of a vibrant economy, which ultimately enhances growth. We have made more progress with Specta than we did earlier with the manual process. The efficiency level and accuracy with digitisation are pretty high

You are in a public-private partnership (PPP) Primero on the Bus Rapid Transit (BRT) system in Lagos State? What is it like?

Our PPP with Primero is massive as far as mass transit is concerned. It has effectively brought together four critical players in the transport sector. The first and most important is the regulator, the Lagos Metropolitan Transport Agency (LAMATA). The second is the operator itself, Primero. The third player is the E-purse,the payment/collection partner, a platform for collecting fare from the passengers. And lastly, there is the financier, Sterling Bank, which has made it possible to provide significant amount for the mass transit to work.  We are getting our money back in a timely and effective manner.

Do we plan to take this to other locations? Definitely! We are currently in conversation with five states where we feel this solution is ideal. In some cases, they have reached out to us, and we have plans to work together. And in other cases, we have done our study, seen the opportunities, and pointed out to them the things needed to be done to improve access to transport. It is something we intend to continue to expand on.

 

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