Annual Report & Accounts 2010 – Transformation
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Bank operating structure

Corporate Banking

Overview

The Corporate Banking group was specifically established to render services to unstructured corporate entities to support small-and medium-scale enterprises as well as the manufacturing companies. Companies in this business segment are known to have peculiar and diverse operational risks but on the flip side, also present significant opportunities with attendant returns on investment which must be properly harnessed with a view to growing our customers’ businesses. This is what the Corporate Banking group is designed to achieve.

Products and services

Generally, this group offers customers in its operational scope the following services: trade finance/remittances, cash management, loans (including overdraft) e-business products, transaction tracking and advisory services. However, our services can be structured to meet the unique needs of our customers through the deployment of state-of-the-art channels with timeliness and accuracy as our watchwords.

Operating locations

The unstructured nature of this market segment throws up the need to provide tailor-made and efficient services to customers. The Corporate Banking group operates a business model comprising 12 hubs and 44 teams/desks across FirstBank branches nationwide. These hubs are open to all business opportunities however; they can develop core competencies on businesses which are prevalent in their geographical locations.

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Operating Environment

Opportunities

Opportunities abound in all business sectors of the Nigerian economy. Our corporate banking business has been structured in a manner that provides the requisite banking products and services that will impact positively on our customers’ businesses. For us, the key sectors among others are: agriculture, oil and gas, manufacturing, trade, power, transportation, communication, construction, real estate, hospitality, and health and services.

The introduction of the Public Private Partnership (PPP) initiative by the Federal Government is another milestone that has occasioned a series of developmental projects and opportunities in this market segment. Government’s increased recognition of the importance of the private sector in the development of our economy has also created many new business opportunities hitherto untapped. The banking sector stands to benefit immensely if these opportunities are well harnessed, as it will impact positively on the bottom line.

There are many ongoing developmental projects across the country (especially on power, transportation, telecoms and real estate) under the PPP initiative with some of our customers as concessionaires. We expect that given the success stories of completed PPP projects, many more of such projects will be undertaken in the near future. We are poised to provide the relevant financial services that will be required for these projects.

Risks

The unstructured nature of our clientele base presents diverse operational risks which if not properly mitigated could erode the huge returns this market segment promises. In light of this, potential risks will be carefully identified and mitigated before they crystallise. Some of these risks include: weak corporate governance, nil or incomplete disclosure of financial records, succession challenges and low financial reporting integrity.

To address these challenges, we recognise the need to fortify and sustain the skills and competencies of our workforce who will be driving the process by identifying new businesses and managing existing corporate business relationships. To this end, the Bank already has in place functional in-house and external training programmes for its workforce.

An effective management plan for this ‘diverse/dynamic’ market segment must entail a robust strategy both in terms of staff skill/competencies and provision of adequate business tools/process. To this end, the Group has devised key strategic initiatives for its operation which, if implemented, will assure a steady and sustained deepening of our market share of the segment. These initiatives include the following:

  • target the top 10 corporate customers of every hub and increase the Bank’s share of customers’ wallet;
  • take advantage of government reforms to grow corporate customers’ earnings and in turn enhance the leadership skills of group heads and relationship team leaders to ensure effective supervision;
  • cultivate and maintain strategic alliances to ensure growth of our corporate customers; and
  • continually improve the relationship management, credit and international trade skills of our people. Work with other stakeholders to ensure excellent service delivery.

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Measures for success

Under the Bank’s new operating structure which came into effect in October 2010, we have made significant inroads into profiling our existing corporate customers Bank-wide and this has led to the identification and rejuvenation of new relationships within this category. We have had extensive dialogue with these customers thereby affording us first-hand information on their diverse concerns and needs.

In the 2011 financial year, we plan to increase our share of corporate banking customers. In order to drive enhanced performance, our planned business management architecture includes an integrated metrics system which tracks, captures and reports performance objectively and promptly. Customer satisfaction remains a key matrix of this integrated performance mechanism with other Key Performance Indicators such as asset growth and quality, profitability, liability generation, employee coaching and self-development.

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© First Bank of Nigeria plc 2011