Zenith Bank leads the way for Nigeria

By now, the rapid growth of the Nigerian banking sector, and subsequently its economy, should come as no surprise. Zenith Bank CEO Peter Amangbo tells World Finance how his bank, and the country as a whole, is becoming a global force

Zenith Bank CEO Peter Amangbo is widely regarded as one of Nigeria's leading corporate managers, and brings over two decades of professional experience to his role
Zenith Bank CEO Peter Amangbo is widely regarded as one of Nigeria's leading corporate managers, and brings over two decades of professional experience to his role 

According to some estimates, the Nigerian financial sector is expanding at approximately twice the rate of Nigeria’s current annual GDP growth, which sits at seven percent. Meanwhile, the number of Nigerians outside the banking system is in constant decline. These two facts alone illustrate the exciting times still ahead for the banking industry in Africa’s most populous country and largest economy.

Nigeria’s population of around 174 million means that the retail consumer market is enormous and crammed with opportunities. Correspondingly, Nigeria – with its huge telecommunications backbone, world-class banking applications and burgeoning biometric projects – is at the forefront of the deployment of electronic banking products in Africa.

The enormous success of Nigeria in e-banking, and the fact that the country is seen not only in Africa, but also globally, as an example of a successful economy, is explained partly by the Central Bank of Nigeria’s encouragement of cashless transactions in order to engender flexibility, speed and accountability.

E-banking’s growing presence in Nigeria can also be partly explained by the staggering transformation of the economy, with growth in the power, oil, consumer goods and agricultural sectors increasing demand for both traditional and e-banking services. Yet there is a key third factor too: the success of e-banking in Africa’s most populous nation is also due to the sheer energy of Nigeria’s most influential and far-sighted bankers, who know that, ultimately, the people who want e-banking and its associated advantages most of all are the customers (see Fig 1). Why? Because it makes banking easier and quicker, it makes it available on the move, and it increases its appeal to tech-savvy younger customers who, as they grow older and richer, will become the mainstream customer base.

NGN 2.8trn

Zenith Bank total assets Q3 2013

NGN 3.4trn

Zenith Bank total assets Q3 2014

The pioneer and co-founder of Zenith Bank, Jim Ovia, who is now the chairman of the bank’s board of directors, has more than three decades of banking experience. From inception, he determined to create a bank that would become a major player in the country’s financial sector, providing premium services that used the most effective and efficient information and communication platforms. His passion in fulfilling this vision is very much the cause of Zenith Bank’s success today.

The bank’s newly appointed CEO, Peter Amangbo, has charm and infectious enthusiasm for Zenith Bank’s success. His fervour is justified by the plethora of achievements the bank has witnessed over the years – but in such a short time when compared with other institutions in the sub-sector. Amangbo, whose full title is Group Managing Director and CEO, leads a financial institution that has a devotion for finding ways to provide ever-better customer service, and is ensuring that Nigerians experience an exciting economic transformation.

Fig 1 electronic banking

Amangbo brings more than two decades of professional experience to his role at the bank; experience that incorporates corporate finance, investment banking, business development, credit and marketing, financial control, and strategic planning, as well as other aspects of marketing and operations. He has been on the board of Zenith Bank and some of its subsidiary companies since 2005. An alumnus of the world-famous business school Insead and a fellow of the Institute of Chartered Accountants of Nigeria, Amangbo also holds an MBA from Warwick Business School in the UK and a degree in electrical and electronics engineering. He is one of Nigeria’s leading corporate managers, a passionate spokesman and a true advocate of the Zenith Bank franchise.

Industry revolution
Launched in 1990 and listed on the Nigerian Stock Exchange in 2004, Zenith Bank has grown in leaps and bounds in the last 25 years. It helped to revolutionise banking in Nigeria, lifting the sector from the era of over-conservatism to one of unparalleled dynamism, characterised by a culture of excellent product and service rendering and global best practices achieved through a combination of the power of vision, a skilful marriage of banking expertise and the deployment of a cutting-edge IT infrastructure. Such progress and growth can be seen in the last few years too, with significant increases in loans and deposits (see Fig 2), split over four main sectors (see Fig 3 and Fig 5).

The bank blazed the trail in digital banking in the country, creating innovative products that meet the needs of its teeming customers. The bank is not only a leader in the deployment of an assorted array of IT platforms, but parades a wide array of innovative e-products.

Zenith Bank believes it is vital for a bank to be completely customer-focused. Yet the bank goes beyond this, also projecting and communicating a clear recognition of the fact that customers are all different. As the bank’s website says: “Everyone is different, so one size never fits all.”

Fig 2

The wide range of corporate and personal accounts is testimony to this belief, and is especially relevant in Nigeria, where the proportion of the population that have bank accounts is on a rapid rise, along with the needs and demands of customers.

Zenith Bank is renowned in Nigeria for the best-in-class service it offers to all corporate clients, from small businesses to major corporations. The Zenith philosophy is that businesses should consider their bank account a business asset. The bank justifies this by saying that when a business organisation considers the advantages that come with a Zenith Corporate Account, the organisation in question would be right to consider the bank account a valuable business asset. This gentle but compelling insistence on the part of Zenith that its accounts are not merely facilities, but actual assets for its customers is clear evidence of how the bank brings an innovative philosophy and approach to its entire operations, and customer service in particular.

Greater reach
Zenith Bank’s shares are now freely traded on the London Stock Exchange, following a listing of the $850m value of its shares at $6.80 each, in a major step at improving liquidity in the stock through global depository receipts.

The bank currently has a shareholder base of over one million and is the biggest Tier 1 bank in Nigeria. In April 2007, Zenith became the first Nigerian bank in 25 years to be licensed by the UK Financial Services Authority (FSA), giving rise to Zenith Bank (UK) Limited. Zenith Bank also has a presence in Ghana, with Zenith Bank (Ghana) Limited; Sierra Leone, with Zenith Bank (Sierra Leone) Limited; and Gambia, with Zenith Bank (Gambia). In addition, the bank has representative offices in South Africa and China and plans are afoot to take the Zenith franchise to other African regions, as well as the European and Asian markets, while consolidating its position as a leading financial services provider in Nigeria.

Amangbo became the third CEO of the bank in June 2014. His appointment is testament to the robust succession plan in place at Zenith Bank. The board, management and staff are confident that this seamless transition will lead to further stability and the growth of the bank in a number of areas.

Fig 3

With more than two decades of banking experience, Amangbo has been a major part in developing Zenith Bank into a world-class institution. As well as his aforementioned BSc in electrical and electronics engineering from the University of Benin, his MBA from the University of Warwick and his tenure at INSEAD, Amangbo also studied at HSM in New York, the Wharton Graduate Schools of Business, and Harvard Business School. In addition, he is a fellow of the Institute of Chartered Accountants of Nigeria and was a senior consultant with PricewaterhouseCoopers before joining Zenith Bank in 1993.

Before his appointment as CEO, he had been an executive director at the bank since 2005. His role in that position included, though was not limited to: being deputy chairman of the management credit committee and the asset and liabilities committee; directly supervising general managers responsible for trade services, treasury operations, domestic operations, electronic banking, information technology and general administration services with over 1,000 staff; supervision of the managing directors of all the foreign subsidiaries and also overseeing their operations; supervision of corporate and commercial banking businesses as well as acting as managing director/CEO in the absence of the CEO. Given his pivotal role, almost every department has benefitted from his in-depth knowledge of finance and banking, from corporate banking and treasury to financial control and strategic planning.

The bank’s strong focus on corporate governance and global best practices is attributable to the joint collaboration of management and staff, for which Amangbo has continued to play a leading role. With over 20 years’ banking experience already under his belt, there is no doubt that the bank will continue to grow under his leadership. The collaborative management approach, which he contributed to establishing, will continue to propel the institution’s superior customer service model.

Setting the bar
This kind of sustainable and flexible model, along with a sheer commitment to meeting customer needs, is – Amangbo argues – precisely why the bank has achieved such great success. He says that the bank is driven by a culture of excellence, strict adherence to global best practices, and a commitment to stakeholders – and, in particular, the staff and customers.

Fig 4

Amangbo told World Finance: “We at Zenith have combined our vision for what a major bank should be like with our banking expertise, our cutting-edge technology, our utter focus on the customer and the customer’s interests, and we have created products and services that not only meet customer’s expectations, but actually anticipate and surpass them. This is exactly why this bank has thrived and grown wealth for its customers and shareholders.”

He went on to discuss the seamless synergy between customer and staff satisfaction: “Our staff are major contributors to the development of the processes and strategies that appropriate the big picture. As a result, they take responsibilities with a passion that is informed by knowledge of their role as an integral part of the institution.”

These bold claims are founded on significant achievements. At present, Zenith Bank is the biggest bank in Nigeria and the sixth-largest in Africa having grown, within 23 years, its Tier 1 capital from just NGN 20m ($108,874) in 1990 to NGN 509bn ($2.77bn) by the end of 2013.

Amangbo sees Zenith Bank’s role not as following key trends in the Nigerian banking industry, but in spearheading and defining them. He points to the bank’s tremendous success in introducing electronic payment systems and digital banking throughout Nigeria and to what he sees as corresponding success in bringing mobile banking to the nation.

To illustrate this, he emphasises the fact that young people in Nigeria especially are highly familiar with technology, and he points out that a reasonable number have mobile phones. The idea some westerners may have that Nigeria is a relatively undeveloped country in terms of technology is simply not true if one looks at the facts. For example, more than 70 percent of the Nigerian population has access to a telephone today, and a high percentage of young people in Nigeria have bank accounts, as do most college students. Amangbo also points out that the penetration of banking services in the Nigerian countryside is also improving, and he clearly regards the countryside population in Nigeria as a significant source of potential growth for the bank.

Nigeria’s recovery
The CEO also talks positively about the general economic trends in Nigeria, particularly the country’s recovery following the global crash of 2008. He said: “Nigeria has thoroughly recovered from the credit crunch, leaving the Nigerian sector much healthier.” He sees a bright outlook for Nigeria economically in the future and highlights that the Nigerian GDP is beginning to settle after its rebasing (see Fig 4), despite the fall in the oil price. The oil sector in Nigeria, of course, remains a major source of income (see Fig 6).

Fig 5

Due to Nigeria easily topping the tables in Africa in terms of its population, you’re unlikely to be surprised that it is Africa’s largest economy. What is fascinating is that, in 2013, Nigeria became the 23rd-largest economy in the world, overtaking South Africa in this respect. Official figures released by World Bank stated that the country’s GDP was $521.8bn in 2013, well ahead of South Africa’s GDP of $350.6bn (see Fig 7).

Amangbo says that Nigeria’s successful economic growth is occurring across most of its commercial and industrial sectors. He is also excited by Nigeria’s investment potential for both domestic and foreign investors: “I don’t find it surprising that investors want to take part in Nigeria’s economy when you consider the exciting potential of our economy, our very high population – which means we have very substantial consumer markets – and our excellent infrastructures, which make investment easy and ensure a good flow of information to investors themselves.

“At Zenith Bank, helping both domestic and foreign investors is one of our strongest areas of activity. We think our devotion to customer service and our passionate enthusiasm for making sure the services we offer are exactly what customers want – and that we are also able to bring new services and new facilities to customers – make us the bank of choice for investors both within Nigeria and beyond our borders, who want to maximise their knowledge of the investment potential of Nigeria and also maximise their returns.”

Hard-earned plaudits
Certainly, Amangbo’s claims for his bank are much more than mere rhetoric. In 2013, Zenith Bank was chosen by The Banker magazine as bank of the year, by World Finance magazine as the best commercial bank in Nigeria, by CFI as best commercial bank, by KPMG as the most customer-focused bank in Nigeria, by BusinessDay as bank of the year, by African Development Magazine as having the CEO of the year, by Hallmark newspaper as bank of the year, and by Champions newspaper as bank of the year.

Investors will win confidence from Zenith Bank’s intensive commitment to the quality of its corporate governance. As a major player in the financial sector, the bank has in place a highly effective governance mechanism and methodology that ensures correct monitoring of its business by the bank’s directors and by the principal management committees of the bank. Zenith Bank is highly regarded in Nigeria for carrying on its business in a manner engendering public trust and confidence while meeting shareholder expectations. “We regularly and consistently reappraise our processes to ensure that Zenith Bank operates at the highest global standard of corporate governance at all times,” according to Amangbo.

Amangbo’s philosophy is that Zenith Bank is a service business, with individuals, small businesses, corporations and institutions being the hub of what it does as an organisation. He explained: “In addition to the bank account services we offer, we also believe we are the best partner possible for investors both within Nigeria and outside who are seeking to make the most of their investments in the burgeoning Nigerian economy.

“We also pride ourselves on our partnership services for organisations seeking to conduct foreign trade with Nigeria. Clearly, international trade can be a highly complicated endeavour with many different laws and regulations to deal with and to contend with in every market. Our wide network of branches in Nigeria and abroad – and also our network of correspondent banks and seasoned international trade professionals – makes us a superb partner for assisting organisations with their foreign trade involving Nigeria and other countries with which they want to trade.”

Fig 6

Customer values
Ultimately, Amangbo sees the bank’s success as deriving from its attentiveness to customer needs and its customer-centricity, which has generated products and services that customers love. Yet, talking to Amangbo, one realises that he also sees the engine of Zenith’s success and rapid rise to prominence within the Nigerian banking industry as deriving substantially from the quality of the people the bank employs and the synergy these people enjoy from working together.

“At Zenith we have strong and tight management teams and a truly collective culture in how we run the bank and conduct ourselves as bankers and serve our customers. Our staff turnover is extremely low and many of my colleagues have been involved in senior management for more than 15 years. It’s this kind of commitment from the bank’s employees to the bank’s ethos and approach, and the quality of our management teams, which, in my opinion, explain how Zenith Bank has been able to achieve something which is marvellous: to become one of the major banks in Nigeria, in Africa and indeed in the world after starting from scratch less than 25 years ago,” he told World Finance.

“Every day, we at the bank think of new ways of serving our customers and making the banking service we offer them more convenient and less expensive. Our entire culture as professional bankers is focused around this innovativeness and ultra-focus on customers.”

Looking ahead, Amangbo believes Zenith will continue to act as a pioneer in an industry – and a country – that is only likely to grow. “As for the future, we believe that we will continue to outpace our competition in terms of delivering new types of banking facilities to our customers and catering to their own needs for the highest calibre of electronic banking,” he said. “We are constantly seeking to find better ways of doing what we do and delivering it to our customers via all the channels, including, of course, all the electronic banking channels they take a relish in using and which matter so much to them.”