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Now That the Mega Banks are Evolving I By Salisu Ahmed Koki
To start with, it is no new news that the all-powerful United States of America deemed it suicidal to take the bull by the horn in 2003 by taking the war to the lion’s den alone when her ever-eavesdropping military binoculars zoomed on mysterious Weapons of Mass Destruction concocting Iraq. Equally known is the fact that America has basked on the euphoria and military strength of a coalition wittingly nicknamed ‘The coalition of the willing’ to pound heavily on Baghdad and dig-out a once powerful Saddam Hussein from a tomb-like hole in the most movie-like manner.
Having said that, can we without any trace of conflicting sense of judgement separate the wor d ‘coalition’ from the word ‘merger’? The answer to this question is a big ‘Y’ and a small ‘es’: ‘Yes’. This is because the lexicon meaning of the word coalition is “temporary alliance, especially between political parties” while the etymologically digressed-picture of the word merger is “to combine or blend, as in the combination of business firms into one.” Henceforth, it will not amount to deliberate exaggeration of an imminent fear manifesting itself in the form of some banks or financial institutions likely to mistake the word ‘coalition’ for ‘merger’ and vice versa, thereby recklessly diving into a mistake once made by America, that of not fishing out a single WMD in Iraq.
Conversely, if the roar and uproar that vividly greeted the Professor Charles Soludo’s wittingly-driven Banking Sector Reform or rather Banking Sector Consolidation was anything to go by then the ever-mutating need to further analyse and improvise the bank consolidation mantra for posterity clearly arises. The context and concept of the bank consolidation, its compatibility and/or otherwise with the Nigerian banking system, the widely speculated conflicts inherent in it, all cannot be grasped merely by studying the success or otherwise to be recorded by the merged mega banks from now up to six to seven years to come. This is solely because the first six to seven years are for fusion; conjoined fermentation, real consolidation, skills assimi lations, genuine mutual consultations and purposeful understanding among the merged banks. They need to understand each other for them to forge ahead and face the experience enhancing and sometimes hopes dashing challenges of operating in the economic farmland of Nigeria. But we can never hope to give proper scientific and equally logical account of the impact of the Banking Consolidation unless we first identify with the problems we are painfully experiencing with the status quo. This means that we must examine the selective forces, the recorded failures, the perceived constraints, the celebrated success and adaptive responses that have given Nigerian banks their physical shape and financial standings which today act as a yardstick for measuring the ir performances.
As it were, in every human endeavour that requires tactfulness there are calculations and miscalculations. Those who make the correct calculations emerge victorious and popular whence those who miscalculate fare pitiable and emerged losers. Now and here, the banks need to clearly articulate their pretext for going into a merger with other like-minded banks or else all will be destroyed from the very start! That’s one good thing about long term strategy and understanding one’s strength or detected weakness. This manner of understanding is what distanced the wise from the churc h-mice, the willing from the weakling and the success-bound from the vagabond.
The great Deng Xiaoping, the father of China’s four modernizations once said that we should seek truth from facts. Meaning, we shall not deduce truth from our hopes, however certain. We should not deduce truth from our expectations, however noble. Or from conventional wisdoms of the da y, however widely held. Or from the edicts of theologians, however exalted. Or from simple ideology of the ideologues, however persuasive. We should deduce truth from facts.
The fact that there is a potent need for the formulation of an effective strategy for maximizing returns in the face of the Banking Sector Consolidation in Nigeria need not be over-exagge rated. An effective strategy that will take into due consideration the complex questions at the levels of technology, business planning, consumer preference, and political risk analysis is what will bring about the anticipated returns. A strategy that will enhance ‘corporate governance’ thereby ensuring that the managers run public corporations honestly, in the interests of their shareholders, and with greater attention to their social responsibilities- instead of for personal gain and private interests. In the same vain, institutions, businesses and citizen’s groups articulate their interests, exercise their rights and obligations, allocate human choices and opportunities, and mediate their differences.
It is important and equally very pertinent to consider which strategy is appropriate to a particular problem and how it should be structured by asking such questions as: Who should have a hand on the tiller? What are their roles and responsibilities? How should these be carried out in terms of organizational structure and decision-making process? Questions of this kind typically involve reference to deeper levels of meaning-common goals, shared values, accepted principles- as well as to conflict of interest and differences of opinion that need to be resolved in order to progress the work of the consolidated banks to the benefit of society at large.
The strategies should give rise to solutions and tried-and-true recipes that would facilitate the avoidance of certain pitfalls or obstacles of a technical order. This will surely do away with needless walls of technical incomprehension. Also, powers that be in the banking industry should consider this concept as a first step in a process through which the system will seek to continuously reinvent itself. Availability, accessibility and affordability should be the foundation upon which these strategies are building upon. A strategy that will manipulate the following for greater good.
· Improving staff strength and competency · Manipulating ICT for greater good · Massive Public Relations campaign · Building rapport with the Apex Bank
IMPROVING STAFF STRENGTH AND COMPETENCY First off, they’d have to realize the need for them to brace themselves up to face and adapt to the trends in global monetary policies dictated by globalization and consequent reverberation of global monetary policy implementation mishaps. Next, they’d need to locate the most booming and grooming businesses around to invest some of the banks’ capital in them. Recent years have seen a remarkable growth in the telecommunication industry and the frequency at which profits are exchanging hands is very high. So, it will be more than helpful if the banks will scrutinize the industry and see where they can gain from the chain of telecom businesses already flourishing. But extreme care must be taking not to indulge in wasteful ventures and needless financial adventures. Choosing the right business for investment requires knowledge, tactfulness as well as intelligence.
(Now That The Mega Banks Are Evolving II will feature a logical exposition on the above issues raised)
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