Soludo Again!
Part 1-Reflections

There is something about Professor Chukwuma Soludo and Tuesdays. The first time Soludo imposed himself on the nation’s consciousness, it was Tuesday 6th July 2004. Personally I can never forget that day because of the remarkable confluence of circumstances-personal, professional, career, spiritual-that came together in that day.

The story did not start with anything to do with Soludo. In January 2001, I joined a one-branch merchant bank with less than N5billion balance sheet as General Manager as the institution prepared for universal banking. I understood the nature of the professional challenge I was accepting when I agreed to join that institution. I had for several years been something of a close observer and analyst of the financial services industry. I had worked for several years as relationship manager and later group head in charge of financial institutions in a bank that held over 75-90 percent market share of financial institutions business in the banking industry, at a time providing services to over 40 merchant banks, some discount houses and numerous other financial institutions. It was inherent in my job to anticipate issues of strategy, structure and evolution of the industry in addition to acquisition of generalist banking skills.

Later that year in November 2001, I had an opportunity to share my thoughts on the structure and evolution of the Nigerian Financial Services Industry as a guest speaker at the Lagos Business School Annual Banking Conference. I argued that eight strategic groups were discernible in the industry. I named the groups (based on what I considered their dominant attributes) legacy, global, entrepreneurial, regional, contender, careful, emerging and marginal category. In the emerging bank category I included four banks, three of whom are main constituents of some of today’s post consolidation banks-Prudent, First Atlantic and Platinum. The bank for which I worked was the other institution I put in that category. I later added a fifth bank-Access to that category when its ownership and management changed hands.

The more interesting insight I offered on that day however was not necessarily the strategic group an institution belonged to at any particular point in time, but the volatility of industry positions. I recall demonstrating with several examples institutions that had moved rapidly in either direction from one group to another. One remarkable example was Standard Trust Bank (STB) which had emerged out of the ashes of the defunct Crystal Bank as a marginal player, had become a major industry contender and by the time of the discussion was on course to entrepreneurial status. It is remarkable that STB subsequently moved to the core of the entrepreneurial group and is now a legacy player with its UBA acquisition. Another example of high volatility upward movement I discussed was Oceanic. On the other hand, I questioned one particular bank’s continued status as a legacy institution and another’s continued position as a successful entrepreneurial player.

By December 2003, I noticed subtle changes. While the characteristics upon which I had demarcated the banks remained as firm attributes, on an industry basis size was becoming the over-riding basis of industry demarcation. I was by then an Executive Director and the bank had grown to over 25 branches and more than N25billion balance sheet. I constituted a strategy team of seven or eight middle-level managers under my leadership to review the industry. Looking at all indices, it was very quickly clear to us that the industry was separating into two classes on the basis of size-the top ten (we included Ecobank based on its supra-Nigeria characteristics as an eleventh) and the rest. A strategy retreat of the most senior managers in the bank and representatives of junior officers was immediately convened that held at Akodo Beach that December. Remarkably that retreat based on my presentation of our team’s findings concluded that the Nigerian banking industry would consolidate within a few years (we actually said two years!) and articulated a two-year plan of action to build 48 branches and raise capital to at least N5billion.

By February 2004, I had come to the personal conclusion that the plan of action was not going to happen, for a variety of firm-specific reasons. Any doubts I had were extinguished that February as several officers responsible for delivering on our first quarter target of 6 branches (which they accomplished) were almost fired by the bank’s board for some procedural infractions! Other information I began to receive from within and outside the bank and avoidable stresses convinced me to seek new directions. I painfully turned my mind to the question-what next? Having lost all desire for employment, I began to think about the emerging pension sector and my interests in strategy and consulting. My decision-making was going to have to draw on inner strength and faith as contrary to the national stereotype, I had only legitimate earnings, savings and investments to draw on. But I had also received clear instructions to “come out from among them…” By April 2004, (at which time Chief J.O Sanusi was still Central Bank Governor) I informed the CEO and Chairman that I would be leaving.

In the nature of resignations at that level, the discussions were at first confidential and had to be allowed to resemble a consultation. At some point to force my own hand, I disclosed my intention to some staff, and before long the whole bank was awash with rumours of my impending exit. This was the scenario until June 28, 2004 when I categorically confirmed to an informal exco meeting I summoned (with only the CEO not present) that I was leaving. I proceeded immediately to the CEO’s office to convey this final decision to him, in order that he would not hear from third parties. On the morning of July 6, 2004 I woke up believing I had gotten a final vivid directive to proceed. At 8.30am or thereabout before Soludo’s meeting commences, I submit my written letter of resignation in Lagos. At 10am or thereafter Soludo starts his first meeting with bank executives in Abuja and conveys the news about N25billion capital requirement.

That morning feeling melancholic, I walk next street to Adeola Hopewell to a nearby bank where two friends-a General Manager and Executive Director are the first to hear of my action. We discuss my options and consider possible areas of cooperation-three of us blissfully ignorant of the bombshell being dropped in Abuja. When I receive the first phone call intimating me about Soludo’s N25billion agenda, my first emotion is shock…then panic… then calm.