21 April 2014

Nigeria: Durosinmi-Etti - I Am Leaving Skye Bank in a Sound, Solid State


Mr Kehinde Durosinmi-Etti, the outgoing Managing Director/Chief Executive Officer of Skye Bank Plc, spoke to business editors on his tenure and his future plans. Steve Omanufeme was there. Excerpts:

You have spent four years as MD of Skybank and over 25 years a banker, with 10 years as CEO. Now that you are leaving what will you be doing next?

I have been in banking since 1987. I went in as Head of Accounts and Computers in Nigerian American Merchant Bank, which was a middle Management position. I moved to Midas Merchant Bank in 1990 and I rose to become CEO of Midas Bank in 1995 and I left in 1997 after almost 2 years. I left on my own volition. I came back into banking in 2002 as the CEO of Eko International Bank, and I stepped down. I thereafter became the Deputy Managing Director of the emergent Skye Bank Plc, following the consolidation exercise. I have not fully decided, I am only going on a long vacation after a long time working.

You have been in banking for a long time. How will you assess banking then and now?

It's been very transformational, lots of things have happened. We have moved from 3-bedroom flat banks of N5 million share capital to banks with N100 billion capital and with a branch network of over 500 to 800 branches. So it has been very transformational.

A lot more people have come into banking. The banks now have better capacity to finance project and also to help retail consumers. Information technology has also been key to that transformation and it's not just the banks, the central bank and the industry as a whole.

ATMs and other electronics channels have come up in the last few years, there is improvement in risk management and corporate governance.We have also seen banks failures.

Banking of today, that is transformational and that been really a major achievement in the last 4 years. AMCON has come on board and we have seen a lot of growth. Today, you can rely on banks.

Whats your opinion on the regulatory authorities?

The regulatory environment is good. It has transformed requirements for bank operations. I dare say the environment, the regulator in particular has been in the forefront of ensuring the soundness of the financial system and therefore they ensure that banks meet up on all requirement, all regulations and keep us in check, whether you are having the right amount of capital, whether they are strong on risk management, they are strong on corporate governance.

They want to see that banks are strong on a lot of things- they are strong on people, there is the competency framework, making sure that the right people are put in the right places, people who have the competence. They are also ready to ensure that people that go into banking behave like bankers in the sense of probity and when they are sanctioned and to see that where people have erred, they do not work in the banks anymore. They have been able to get banks to get up and meet up globally.

Some people are of the opinion that Nigerian banks are over regulated. What is your opinion on this?

Well if we talk about that, there is a reason. First of all, I don't believe that the industry is over regulated. In America, Europe, we have much higher levels of regulation. A bank like Citi Bank in New York will have like 300 resident regulators from at least 5 different regulatory bodies and they are resident there permanently. When you finish with one regulator, you are being reviewed by another. In effect the regulators are there real time with the banks.

In terms of regulation, I don't think we are being over regulated. What has happened is that a new guide to bank charges was introduced, which really reduced the tarrifs and is affecting the banks but the banks' are adjusting.

It might be harsh, I may not agree with everything but I see the reason behind it, which is financial inclusion; bring down charges so we can bank more people. If we bank more people, even if you are making less fees, you will compensate on volume. Some of those charges may be a bit too much but the banks and the central bank are still working out something so we can rebalance some of these changes. Its a good thing but the question is can we sustain it?

Some watchers say Nigeria is still underbankded. What is your view on this?

We have over 10,000 in the US alone. First of all, banks will grow, in some countries. They have 4 banks, 4 main banks. What we still have is a handful of main banks and then you have specialist, those that are known regionally or that have issues, some might be strong in the North, some might be strong in the South.

Some say Nigeria banks cannot indulge in large scale financing. Is this true?

Skye Bank and many Nigerian Banks are truly capable of large scale financing and that has been shown by all the privatisation that you have seen recently. In the shipping industry, we are the first to finance PSV, local content of about 140 million dollars which is used at the Agbami Oil well.

We are also the first to structure a transaction where they are refinancing another vessel through an export credit from Norway and we are the guarantor bank for the same company, the vessel iwa going to cost about 130 million dollars. What that means is that it brings employment and a lot of capacity to the industry and it keeps a knowledge and the experience globally.

You took over the bank four years ago, what state are you leaving it?

Well, I took over at the point of global financial crisis. We had our national crisis as well then. AMCON came after that. So the industry was going through crisis. AMCON came on, all the banks had a lot of toxic assets so at that time, banks were making losses, we too were barely scraping to make profits. So if you look at our ratios, they look terrible but in terms of goals, it has grown in three an half years. We have grown the balance sheet of the bank by about 80 percent and a lot of the indices. Likewise profit today is up at about 14 percent. Other ratios like capital adequacy was quite low as at the time. Today it is about 20%, above the required percentage of 15 percent.

What are the specific measures that you carried out?

We reinforced our management by establishing an enterprise RISK management system framework which is very strong and I believe it is one of the best in the industry. We engaged a lot of policies around everything we want to do either with the right people, training or IT. We are experiencing an upgrade of our IT infrastructure right now, a very significant upgrade. We believe we are on the right track and that is what has been the backbone of that Skye Bank right now.

Is the corporate governance code for banks by the CBN responsible for you leaving at this time?

I want to make it clear because when you don't say it as it is, the market will start reading meaning . As MD, I had a 4-year contract renewable for another 4 years. At the outset, I promised to stay only 4 years and my 4 years is up in a couple of months and I am leaving. To be very clear, I left Skye bank on my own volition, in line with what I had planned for myself and the organisation.

What would the bank remember you for?

Well basically a lot. We ensured that we had an open access system that is acceptable. The bank has an open management system with the whole framework whether it's corporate governance, risk management. Our credit processes is very strong today and we ensured that the people are well motivated with good compensation and welfare for the employees. So in all that we ensured a fair and enjoyable environment that will promote hardwork to meet our corporate goals.

What exactly is your reason for leaving Skyebank, you have the opportunity of a second term?

Look at it this way, I did it the first time when I left after 2 years on the saddle as chief executive for personal reasons. I did it the second time when I stepped down for a colleague to take over the mantle of leadership because I felt the other peson was able and also competent. When I took this challenge. I set goals for myself that by the time I was 49, I would stop working for anybody. Now I am 52 this year and I feel that I should be given time to do things for myself before one gets to 60.

So it is a personal decision. Specifically, from day one I told the Chairman and some of my board members and colleagues that I am only going to do 4 years. So that is why I am going. It is sad but I have enjoyed the time spent with the bank but I have to do what I have set my mind on. I know it is not common, but I have done it few times before. So its common with me.

I don't hold on to anything in terms of power, position and all the things that go with such an office, it means very little to me. What's most important to me is, I have been given the opportunity to serve, the stewardship and so I have done creditably and honourably.

What were the key policies you started and you want the new management to continue?

First of all, the IT, get it off very well because its is a platform that is key to success and use people well, I think I did to an extent but you know you can always improve on them. So in the case of growth, i believe they have learnt from our mistakes, so will know the areas to focus on. They are putting in renewed methods on how to compete in the market and challenge growth, those processes are put in place before it is taken down and I believe they can be used to challenge growth very effectively and physical development, at that stage, they will grow.

Your successor, Mr. Timothy Oguntayo, how much of him do you know in terms of professionalism and pedigree?

Timothy Oguntayo, right from 2006, has worked very close with me, I have been his direct supervisor for most of the last 8 to 9 years and he has got all round competence both in commercial banking and merchant banking. He started his career in UBA so he is got strong commercial background, Prudent Bank, merchant bank, so he cuts across both. he has the thinking of an investment banker and the skills of a commercial banker and nothing can be better than that and he is got great sound judgement which is key for decision making, he is experienced, so he's a people's person, he gets on well with people, he is got good leadership skills, he has the attribute to lead so he can ensure that his continuity and move the bank, I have no doubt that he can move the bank in the right direction.

One key decision making you did that you want to be remembered for.

Well, one thing I did, I reduced the number of loss making branches of over 100 to an average of 12 to 13 and I did that in 2 years.

What is your parting gift to staff and shareholders?

Well, they should stand behind the new leadership and I am sure that there will be continuity, there will be continued growth, they will continue to get returns they are getting and the bank should ensure that it's only poised to do better.

What message do you have for the bank as you retire?

Well I will like to thank them for giving me the opportunity to serve and they should continue to support the new management of the book the way they supported me, the board, the staffs and shareholders they supported me very well over the years and they should continue to do that. I give the now management a strong endorsement, the new leadership. That they should continue to support them, I am sure that they will not dissapoint.

PROFILE Mr Kehinde Durosinmi-Etti is a three-time bank Chief Executive Officer with a good track record of performance and visible achievement. Durosinmi-Etti is a seasoned banker with over 25 years of cognate banking experience, spanning banking operations, Treasury Management, Investment Banking, Project Finance and Commercial Banking.

Born in Lagos over 50 decades ago, Durosinmi-Etti had his primary and secondary education in Lagos. His quest for more knowledge took him to the University of Ibadan where he successfully completed his studies and obtained the Bachelor of Science degree in Economics in 1982. For professional knowledge, he enrolled for the Chartered Association of Certified Accounts of the United Kingdom and is a fellow of the institute.

Having armed himself with the requisite academic and professional qualifications, Durosinmi-Etti began his working career as an Audit Officer in 1983. After a stint in audit practice spanning four years, his banking career kicked off in 1987 when he joined the Nigerian-American Merchant Bank Limited. He subsequently moved to Mdas Merchant Bank as Head of Treasury and Assistant General Manager in charge of Money Market Division, rising to the position of Managing Director and Chief Executive Officer of the bank.

Kehinde Durosinmi-Etti also worked at Lagos Building and Investment Company Limited (LBIC) before joining the then Eko International Bank Plc as General Manager. His prolific output and high productivity within a short period of time earned him an elevation to the position of Managing Director/CEO of the bank in July 2002.

As the Chief Executive Officer, he was in charge of strategic visioning, business develoment and marketing function of the bank. He also provided supervision and direction for leadership and management team of the bank in growing the business, among others.

He also successfully anchored the turnaround of the bank and led it to becoming one of the strong banks in the country. It was the solid and healthy state of the bank that deservedly earned him the position of the Deputy Managing Director of the emergent Skye Bank Plc following the consolidation exercise in the Nigerian banking industry which led to five banks coming together to form the new bank.

A good corporate strategist, tested manager, effective leader and an experienced banker, Durosinmi-Etti, chared his over 25 years banking experience his ups and lows and his next moves.

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