Elias Igbinakenzua: Our Vision is to Make Globus Bank Most Preferred Financial Service Provider

Elias Igbinakenzua is the Managing Director and Chief Executive Officer of Globus Bank, a new generation bank. He can be summed up as sublime, successful, soul-searching, and shrewd. He has the faith and the fortitude to sit atop the new Globus Bank, quietly turning the banking narrative around in Africa’s most populous nation, and taking further leaps in the global economy. Registered as a limited liability company on March 6, 2019, licenced by the Central Bank of Nigeria on July 10, 2019, and commenced operations on November 6th of the same year, the bank is determined to be Nigeria’s foremost digital financial institution, providing best-in-class solutions that meet customer needs in a timely and efficient manner. In this interview with THISDAY, Igbinakenzua discusses the passion, philosophy, and principles driving him and the bank, while leveraging technology and people in the most efficient and responsible manner. Excerpts: 

Tell us about Globus Bank and what the journey has been like since you commenced operations.

The bank started operations on November 6, 2019. It took us about 18 months from early 2018 to process the licence, and we eventually commenced operations in late 2019. We started from this humble office, and people were wondering what this new bank was coming to do when there were already too many. But we had a clear vision about how we are going to operate. To our own surprise, at the end of 2019, we made a profit. It is like saying that I opened on November 6th, and between that date and December 31, I cleared all my losses and made a profit within two months of that year. It was marginal, but it was a good start. The second year, our first full year, was when we made N5.4 billion plus profit, almost half of the bank’s initial capital. It was like, what are these guys doing? Nothing: just doing the basic things well.
What did we do? We focused on what we knew how to do best, which was leveraging corporate relationships and harnessing what was considered low-hanging fruit. During the first six months of our operation, we were already banking more than 70 per cent of the top 100 corporates in Nigeria. The likes of Dangote, Nestle, Cadbury, Unilever, 7UP, Flour Mills, Indorama, FrieslandCampina, and several others were onboarded within a few months of our operations. So, our top management and board members’ pedigree made it easy to run fast. However, we were delayed by capital because we only had N10 billion initially, which limited the bank’s capacity. So, we had to ramp up our capital quickly, which has seen us to where we are today, with over 34 branches in 4 years across the country’s six geopolitical zones.

How did you cope with COVID-19 just two months after you commenced operations?

We are like a child that was born in the midst of war. Before COVID-19 broke out, we sat down and asked ourselves: which are the key sectors that are resilient? So, we picked key sectors like food, packaging, telecommunications, and beverage, which eventually proved resilient post-COVID-19. We focused on them because people will eat and drink even in times of sorrow. All our efforts were on growing along those sectors. And when COVID-19 struck, those were the sectors that had a field day. So naturally, we were able to roll with them, and things went well. It also fitted well with our phygital strategy that COVID-19 so much fast-tracked our plan.

So, what was the strategic vision behind Globus Bank at birth that enabled you to carve a niche for yourself so quickly?

When we started, we took the time ( the management team and I) and spent days in the ‘bush’. We had to carve out our corporate philosophy and agreed it would represent what the bank stands for. And everybody bought into it. We said we would be the most preferred financial provider, delivering an endearing customer experience. That was the ultimate goal. Our mission was anchored on three things: people, technology and service. We said that we would serve our customers with passion and deliver superior value to all stakeholders, leveraging technology and people in the most efficient and responsible manner. It is not just to have technology and people; you must ensure they are leveraged efficiently and responsibly. We have five core values. They are creativity, excellence, respect, reliability and simplicity. People have been wondering what we mean by respect.
I will say respect begets respect. If you are an institution and you respect yourself, you earn respect. Today, as a bank, if you ask the Central Bank of Nigeria (CBN), we are a bank that you will hardly see any infractions. Come to us and check what you want to check, and I will be dead sure that there will be no deliberate infraction. And if you check our financials today, you will hardly see any infraction whatsoever. For us, it is a mark of respect. It is the same thing for customers. You do not see us overcharging customers or doing things that can betray trust. No! It cannot happen. If anything, maybe I will undercharge you. Same with our interbank dealings since we started. No bank will say that it gave us money, and it was overdue, and we didn’t pay back. It is all about respecting yourself and doing what you know is right. Every staff you have is a privilege. Respect the staff for who he/she is and the staff will give you the best.

Did you ever have some moments of doubt about whether this venture would succeed?

I will say yes. I was with Zenith Bank for 20 years. I became an Executive Director in 2005. I was on the bank’s board for eight years before I joined Access Bank also as an Executive Director, Corporate and Investment Banking. I was there for four years before processing the licence for Globus Bank. So, I have seen how to move in a smooth sail and how to also move in a roller coaster environment. It was crystal clear that I had good industry knowledge. I also knew that I had in the market some level of goodwill, which is important. If you have the knowledge of what you are going into and you have the network, then the fear of success will not be too high for you.
I also must give credit to friends and partners who supported me all the way, especially Mr Peter Amangbo, who is a former MD/CEO of Zenith Bank and currently chairs the board of Globus Bank. But yes, there were doubts, especially when it came to raising capital. People will tell you, ‘Oh, yes, I will’, but bringing the cheque becomes an issue. We went through all that, but today, I must say that the shareholders of this bank are very pleased with what they have seen. Today, their investments have grown, and I will say that the progress is unprecedented. Today, we are unarguably the fastest organically growing bank ever in Nigeria. So, let me thank all the investors and shareholders that had confidence in us and invested in the dream. I also must thank the board for their support and guidance.

So, what are the key elements that accounted for this progress?

First, I will say it is strong governance. I have a hands-on board. You cannot manipulate the board in any way, and everybody is working with the same growth mindset. We also have policies that guide the operation. We have a portal where all the policies are deposited and every staff has access to them to know what to do. The second one is relationships. People who have known us over time and know how dependable we are find it easy to run with us. Our strategy is to be solution-oriented. We go to customers to identify their pain points and jointly create a solution construct that endears us to them. They could see us provide solutions that hitherto did not exist and actually solve legacy complications.
I had an encounter last year with a very big bank; the bank was complaining that I was taking all the businesses of major names on its books. But it is the value that you give that brings customers closer to you. The other point is our speed, our turnaround time. We will respond to a customer credit request in hours, while other banks take weeks. Our speed is based on knowledge of customers and support of the board. Another one is technology. We leverage that very well, such that today, we have scored many firsts in the industry. We do not make noise. We were the first bank in Nigeria to allow you to bank without data; we are also the first banking institution that actually allowed the issuance of cards on the go, which we call instant cards. My staff can meet you on a public bus, open an account for you, and issue you a card right on the bus. The card will work. You do not need to come to the branch. It was like magic. We are also the first to make our mobile banking app AI-compliant. We also have what we call a Vanity Account number that allows a customer to use any 10-digit number, even his/her phone number, as an account number. Today, we have more than 30 software developers, and most of our IT products are built in-house. So we can offer bespoke services with relative ease.

Give us a breakdown of your financials in the past five years.

I will start by saying that in the first year, we opened with just N10 billion as a regional bank. By the second year, we had moved our shareholders’ funds from N10 billion to N25 billion and had become a national bank. By the third year, we moved our capital again from N25 billion to over N40 billion, and by the end of 2022, we had grown our capital to over N53 billion. As we closed 2023, it moved to over N82 billion; that is in the capital. On the balance sheet size, in our first year, we were still under N100 billion. By the second year, we had crossed N200 billion; by the third year, we had almost N500 billion, and by last year, we were already at over N1 trillion in total assets and contingencies. As of December 2023, if you add our total assets and contingent liabilities, we were at N1.002 trillion and N82.6 billion in shareholders’ funds last year. Profit before tax rose from N5.4 billion in 2020 to over N23.0 billion in 2023.

Can you share with us what informed the choice of the name Globus Bank and how it connects with your vision and mission?

If you go to my banking hall downstairs (at the head office), you will see the aspiration. Globus Bank was something that we came up with because we knew we should be doing a brand that will go global eventually. The Latin word for global is globus. So, our aspiration is that this franchise will go global. That is the aspiration and I think the name has been very well received. In terms of the franchise expansion, as we speak, we have over 34 branches, which are purely organic branches. Our aspiration was to cover all six geopolitical zones within our first five years. And we have done that in our first four years and we are still growing.

What is your view about the Central Bank of Nigeria’s hawkish monetary policy and the directive for banks to recapitalise?

I will not like to describe the CBN’s policies as hawkish. I would like to see it as the CBN doing what it deems necessary at this time. The economy has been under dire circumstances and the CBN needed to do something to get it up. Recall that President Bola Tinubu’s administration’s aspiration is to move the country’s GDP to a $1 trillion economy. The CBN is the banker of last resort. Once the federal government has an aspirational goal, the CBN must do things that align with that aspiration. They had to ensure that they came up with policies that could boost production in the economy, attract more capital flows, and grow the economy. These are the factors that brought about the recapitalisation exercise. It did not take us by surprise because we know that banking is about risk and capital. The best way to absorb your risk is to inject capital. The only concern that we have is the area where the CBN said it would not allow capitalisation of retained earnings. Retained earnings actually are funds that belong to shareholders which they had not shared as dividends.  Not allowing capitalisation or its distribution to shareholders may discourage investors. But that is what they have said and we are working with that.

How will the banking industry benefit from the recapitalisation exercise?

The industry is being prepared to play its role as a serious growth catalyst. The reason for capital injection is to strengthen the banks to be able to contribute more to the larger economy and I think that the banks understand this. If you look at the results published by the banks in the past one year, you will see humongous profits. But the CBN has said, ‘Do not take this out’. That is meant to strengthen the bank as well. What the banks want is a system where they are protected as lenders, and the loans that they give out will come back. What needs to be done by the CBN is to ensure that there is strict governance across the industry, which I think the new CBN administration is very focused on governance and compliance. As long as the economy is growing, the banks will grow and that growth must be supported by capital, good governance and risk management. There is absolutely more room for growth in the industry.

So, what is the Globus Bank’s plan to meet the new minimum capital requirement?

When the CBN announced the policy, it gave a deadline for banks to come up with their capitalisation plan, and that was before the end of April 2024. I have said that we had N82 billion as shareholders’ funds by the end of 2023. That consists of about N45.7 billion as paid-up capital and share premium. We had another N36 billion plus as retained earnings. If the CBN will not accept our retained earnings, we will have N45.7 billion as qualified capital in this case. We are a national bank and we need to raise N200 billion. We currently have N45.7 billion and a shortfall of N154.3 billion. Our plan to the CBN is that we will do N25 billion before the end of the third quarter of this year.
We are going to do N50 billion in 2025 by way of rights and private placement, and we will do an initial public offering (IPO) in the first quarter of 2026 for the balance. But as I speak to you, we have just done N18 billion by way of rights that were fully subscribed and N25 billion through private placement is ongoing. That will make N43 billion instead of the N25 billion we planned for the quarter of this year. That means we are already ahead of our plan for this year. Maybe by 2026, we will then do our IPO. But we are very confident that we will be there either before or on time.

So, there is no plan for mergers or an acquisition?

 We do not intend to merge to meet the capital requirement, but we can acquire if any bank exists that we feel is of value. We intend to achieve N200 billion organically without merger or acquisition.

So, when will you be listing on the stock market?
That will likely be in 2026 when we have the IPO.

Now, with treasury bills at high interest and other lucrative investment options, how do you think banks can attract investors as they seek to raise fresh capital?

Investors look at the return on investments. If the return on investment is not in line with their long-term aspirations, they will not invest. Banking, I keep saying, is not a hundred-meter dash. It is a marathon race. You have to have a long-term view. You invest in TBs and make 21 per cent. It is a fixed income. It comes and goes. But when you invest in a bank, I will tell you, my shareholders last year had a return of more than 30 per cent on equity, and it keeps increasing. It is all about who you are as an investor. If you are investing in what you can eat today, then buy TBs. But understand the relationship between your Treasury Bills or any other fixed-income investment with inflation in an inflationary economy. Capital gains are a major upside with equity investments, which helps ameliorate inflation’s negative impact.
So, those who understand these dynamics will still invest in bank equities if other variables are positive. The need for asset/portfolio managers to balance their portfolios will also facilitate some investments in bank equities irrespective of the rate on fixed-income instruments. I do not think the TB issue will be a major concern. However, TB interest rate increase is also there for two reasons. First of all, you do not want to kill savings by having an inflation rate too much higher than your interest rate. Two, you want to attract foreign portfolio investors with high interest rates so that they can bring in foreign currency investments and help supply foreign exchange. So, it is a delicate balance that must be achieved.

How are you taking your services to the country’s huge unbanked population?

When we applied to CBN for approval, it was partly premised on financial inclusion. We saw the gap, that there was a lot of under–banking at the retail end. We said we were going to work on this. How we planned to do that was through technology. When I said corporate, it is not as if we ignored retail banking. We are doing retail but purely using technology and collaborations. When we say Globus Bank is phygital, it means that we are going to be 80 per cent digital and 20 per cent brick and mortar. But that 20 per cent that is brick and mortar will produce more than 100 per cent of other banks. For instance, I have a branch at Allen roundabout, at Ikeja, Lagos.
That branch is competing with a combination of five or six other banks. We are opening two more branches at Ikeja soon — one at Agindigbi and another at Oba Akran. So, the three branches will be like having nine or 10 branches of other banks. We leveraged that single branch with a lot of digital prowess and achieved a lot of mileage. Retail is still being taken care of, but largely through digital technology.

What are the unique selling points of the Globus Bank?

I have spoken about relationships earlier. You wonder that we have been here (the bank’s head office), in these small premises for five years and have been growing silently. It is all about value. You know the pudding when you taste it. I am one CEO that is available 24/7. If you come in, we will discuss and solve your problem and you move on. When customers see that you can see them and solve their problems on the spot, they are enticed to do more. We are a bank that is there to offer value. The value is not off the shelf but tied to the customers’ pain points.

Do you see the aggressive spread of fintechs as a threat to commercial banking?

I will say no. We envisaged fintechs in our application for a banking licence to the CBN. We said we were going to collaborate with fintechs, not to compete with them. Fintechs are enablers. They help reach the grassroots that you cannot reach. We have a robust IT platform to integrate fintechs. Today, we have fintechs collaborating with us and moving significant volumes daily. What we do is to enable them by providing channels. What we should focus on as a system is to ensure that the fintechs have proper know-your-customer (policy) so that it becomes seamless when they come to deal with a bank. If the CBN can insist on proper KYC, fintechs will be seen as partners that will enable us to deepen banking services and minimise financial exclusion. For us, it is collaboration and partnership and not competition with fintechs.

What is your level of commitment to the SMEs?

SMEs in Nigeria are key. However, what we need to do is ensure that we have a proper credit scoring system that tracks SMEs’ performance and credibility. The CBN has licensed about three credit bureaus, but it is not working the way it should be. You will find a customer who is defaulting here but is still borrowing somewhere there. We deal with SMEs based on the information that we have about them. We are supposed to enable ideas to flourish. Our role is financial intermediation—moving funds from the surplus saving unit to the deficit saving unit. We must do that bridging for economic growth and productivity. But that must be done cautiously to minimise loan default. Today, Globus Bank has zero non-performing loans (NPL). For four years, we have grown our loan book to where it is now without NPL. We may be the only bank in sub-Saharan Africa that will operate for five years with zero NPL. This is a testament to the quality of our customer base and risk management practices.

Your bank, as you said, has no NPL, yet the CBN said your retained earnings won’t be part of your capital. Can’t there be a reward for good behaviour?

Absolutely, that is what we are saying. There are banks today in Nigeria that have forbearances. It means that these banks have not sufficiently provided for the specific loan losses because forbearances have been given by the CBN for certain reasons. It will be understandable if CBN encumbers their retained earnings to the extent of those forbearances rather than denying all banks the right to their retained earnings. So, when a bank has no NPL and no forbearances, it’s difficult to understand why it should be prevented from utilising its retained earnings. And let me also add that aside from not having any bad loan, we still make impairment provisions. We had more than N8 billion as an impairment provision as of December 31, 2023. But the CBN knows better. However, I think the CBN should have isolated banks with no forbearances and allowed them to capitalise their retained earnings.

How do you safeguard your system against cybercrime, particularly your online operation?

Fraud is part of operational risk in a bank. For a bank, risk management is critical. You have to make sure that the major risk buckets, namely the market risk, credit risk and operational risk are well understood by the CEO, management and board. As well as the team saddled with the risk management function. We have people in cyberspace who are there only to commit frauds. So, you must build enough safeguards in your system. We have done a lot of investments in IT safeguards like firewalls, etc. to protect our operations.

How are you banking the Gen Zs?

The question is, who are the Gen Zs? The young ones today are on the go. The Gen Zs want to bank without knowing who they are banking with. That is why today, your mobile phone is your banking hall. That is why—again, we are lucky that Globus banking apps are seen as the simplest and most user-friendly. You log in, and you are running on the spot. A lot of students are happy with it. The Gen Zs are happy with the solutions and that is how we see it. When you start at that level, they will start knowing you for what you offer, and as they move from Gen Zs to millennials, they will still keep you as their main banking institution. I think every bank is saying that you cannot ignore the upcoming Gen Zs and that you have to create an environment that enables them to be the people they want to be.
In Nigeria, we have seen that we are very creative at that level, and a lot needs to be done to encourage them to see how they can commercialise that creativity. We have people who went to school in very remote Nigerian universities doing great exploits in ICT. We have skills. The challenge is to harness these skills and make the best out of them. The Gen Zs are here to help us grow, and as we fade out, we create a room for them to step up and do it their own way. For now, we are trying to structure our systems to align with their aspirations. We are saying that you do not have to come to the office every day to work. This is part of the things we are doing to enable the Gen Zs to participate in banking, and it is working well.

What is your assessment of the Nigerian economy?

I remain very positive. Otherwise, I will not be investing more in Nigeria. Yes, things may be tough. The past few years before this government came in were years of indecision when people were just there for their own interests. However, we have seen a new regime since May 29, 2023, and we have seen policies that may be tough but appear to be in the right direction. The removal of petrol subsidy and harmonisation of the foreign exchange market were things that needed to have been done. However, the way we managed the consequences of those policies is a different discussion altogether. I think the government will find better ways to ameliorate the effect of those policies. But are they the right things to do? I will say yes. And the CBN has also come up with measures to target inflation.
Today, the Monetary Policy Rate (MPR) is circa 26 per cent. Inflation is at 33.95 per cent. That is high by any standard for any economy. The CBN is trying to see how they can moderate that over time. They have a target of bringing down inflation to about 21 per cent by the end of the year. It may appear to be a tall order, no doubt. But I think that they are on it. What I know is that the rate of increase in inflation is moderating right now. Things may be tough, but the economy will bounce back. Nigeria is an economy that you cannot ignore. An economy of over 200 million people is a big market. Every name wants to be here to produce. If the right policies are put in place that attract FDIs and they can see some level of consistency in government policies and clear exit routes, positive capital flows will increase.

The lending rate in the country is excessively high, and one keeps wondering how businesses are surviving under such a burden.
It is a very tough one to borrow at 30 per cent and make a good return. But when you are in the jungle, wearing a cap, and the thorns take your cap, you will leave your cap and survive first. When you are alive, you can do another cap for yourself. Where we are is where we need to survive first of all. Growth will come once there is stability. Once the economy is stable, then we can pursue growth. As we are today, the economy has been heading south, and you must stop that haemorrhage. If you are in a hole, you should first stop digging and find your way out. What the CBN is doing is first to arrest inflation, attract foreign investments into the country and then start working on other measures. It is the right way to start to address the issues that have been there.

Finally, how do you intend to improve your bank’s visibility?

We have not been very much out there in the press. The idea was for us to first grow our brand, and by the time we come out, there will be value. The plan that we had was that a year prior to our IPO, which is next year, we would start showing ourselves in the market. Right now, our greatest advert is our branch network that people see and our services. We are focusing on enhancing the value that we deliver. For the industry, I will say that I am very positive that things will get better. Recent developments concerning Heritage Bank are not a reflection of what the industry as a whole represents. The CBN is very much on top of it and working to ensure that the banking system is sound.