ABSTRACT
The study focused on strategic management as a tool for the attainment of organizational performance in selected Nigerian deposit money banks in Enugu Metropolis. The specific objectives sought to: ascertain the extent value chain affects growth in Nigerian deposit money banks profitability, determine the extent of effects of strategic change on market share in Nigerian deposit money banks productivity, examine the extent strategic leadership affects customer satisfaction in Nigerian deposit money banks effectiveness and determine the key challenges of adopting strategic management in Nigerian deposit money banks. The research design adopted in this study was survey which is characterized by direct interaction with the population. The target population of the study is 2093 comprising both the senior and junior staff of the three selected commercial banks in Enugu metropolis Nigeria. Taro Yamane’s formula was used to determine the sample size of 336. The key instrument of data collection was questionnaire and oral interview guide. The questionnaire was structured in 5-point Likert scale. The data were presented using sample table frequency and the formulated hypotheses were tested using simple linear regression and Friedman Chi-square. The study found that value chain to a great extent affected growth in Nigerian deposit money banks profitability (r = 0.882; F = 1.057E3; t = 11. 249; p = 0.05). Also the study discovered that strategic change to a great extent had effect on market share in Nigerian deposit money banks productivity (r = 0.917; F = 11. 596E3; t = 21.169; p = 0.05). Strategic leadership to a great extent affected customer satisfaction in Nigerian deposit money banks effectiveness (r = 0. 573; F= 148.292; t = 5.866; p = 0.05).Further the study revealed that economic and poor structures were the key challenges of adopting strategic management in Nigerian deposit money banks (X2cal = 492.352 >X2critical = 11.14, p 0.000 < α = 0.05).The study concludes that, the performance of deposit money Banks depend on the types of strategic they adopted. The study recommends that the organizations should intensify every effort to assess and monitor both internal and external variables in order to checkmate the unprecedented failure that could be controlled by continuous improvement.
CHAPTER ONE
INTRODUCTION
1.1 Background of the Study
Strategic management is a disciplined approach that utilizes the principles and process of management to identify the corporate objective or mission of any business. It determines an appropriate target to satisfy the objective, recognize existing opportunities and constraints in the environment, and device a rational practical way by which an objective can be achieved. Strategic management is a technique used by organizations to create favorable future as well as help helping them to prosper. The key to strategic management is to understand that people communicating and working together will create this future (Harfield, 1998).
In other words, strategic management emanates from both the process and philosophy for determining and controlling the organizational relationship in its dynamic environment. As a process, it attempts to define approaches and techniques aimed at assisting the management in adapting to the dynamics of today, through the use of objectives and strategies. Strategic management endeavours to achieve effective and efficient programs to accomplish the organization’s mission. As a philosophy, it changes how the manager looks at competitors, customers, markets and even the organization itself. Its primary objective is to stimulate management’s awareness of the strategic implication of environmental events and internal decision. Contemporary organizations see strategic management to be concerned primarily with actions organizations take to achieve competitive advantage and create value for the organization and stakeholders (Porter, 1981).
Lawrence and William (1988) define strategic management as a stream of decisions and actions, which lead to the development of an effective strategy or strategies to help achieve corporate objectives. The strategic management process is the way in which strategists determine objectives and make strategic decisions. Strategic management’s main focus is the achievement of organizational goals taking into consideration the internal and external environmental factors.
Porter (1985) argues that the essence of formulating comprehensive strategy is relating a company to its environment. Strategic management permits the systematic management of change. It enables organization to purposefully mobilize resources towards a desired future.
Chandler (1962) posits that any effective successful strategy is dependent on structure, thus to achieve any effective economic performance the organization needs to alter its structure. Strategic management is congruent with the quality movement’s emphasis on continuous improvement. Indeed, the emphasis on anticipating the needs of stakeholders is a critical component of external analysis.
Shrivastava (1986) eulogizes better on the meaning of strategic field using five operational criteria, derived from Giddens (1979). These indicate its ideological nature: the factual under-determination of action norms; universalization of sectional interests; denial of conflict and contradiction; normative idealization of sectional goals; and the naturalization of the status quo. Shrivastava concluded that strategic management was undeniably ideological, and that strategic discourse helped legitimize existing power structures and resource inequalities. Drawing from the above Shrivastava (1986) sought emancipation in the ‘acquisition of communicative competence by all subjects that allows them to participate in discourse aimed at liberation from constraints on interaction’. He also called on researchers ‘to generate less ideologically value-laden and more universal knowledge about strategic management of organizations’.
Knights and Morgan (1991) opine that corporate strategy is a set of discourses and practices which transform managers and employees alike into subjects who secure their sense of purpose and reality by formulating, evaluating and conducting strategy’. Managers cannot stand outside of ideology to impose their strategies on unwitting workers. Rather, they too are entangled in discursive webs. Strategy constructs a myth of commonality of organizational purpose by positing lofty and unattainable aspirations (Harfield, 1998). While projecting solidarity of purpose and the universality of the interests of senior managers and stockholders, the discourse of strategy legitimates organizational hierarchy with differential influence and rewards. The importance attached to strategy also implies that employees who work outside of what is identified as the strategic core of an organization make a lesser contribution
and therefore cannot be expected to participate, even marginally, in decisions for which others are responsible. It also provides a rationale for differentiating the pay and conditions of ‘core’ and ‘peripheral’ employees. The need to assert the status of an elite group of ‘strategic managers’ is perhaps particularly acute in advanced economies where manual labour is declining and traditional divisions between task execution and conception are loosened up. From the foregoing we can draw our inference that effective successful strategy is dependent on structure, thus to achieve any effective economic performance the organizations needs to alter its structure. Strategic management is congruent with the quality movement’s emphasis on continuous improvement and increase performance of an organization.
Stoney (1998) discovers that in the strategic management model, responsibility for corporate level decision-making rests within a core of strategic functions discharged from the day-to-day responsibilities of operational activities, these being devolved to the lowest possible level of control. Undistracted by operational matters and line responsibility, the elite (key functionaries) often the ‘executive board’, is left free to concentrate on strategic thinking and decision-making. Each banking organization’s experience with strategic management is unique, reflecting the organization’s distinct culture, environment, resources, structure, management style, and other organizational features. However, experience abound that working with leaders and managers in various organizations indicates that similar questions and concerns develop as organizations implement strategic management. Meyer (1991) further opines that strategic management can be distinguished from other organizational sciences by its emphasis on identifying, explaining, and predicting the determinants of organizational performance. The field’s central research question is ‘‘why do some firms outperform others?’’ Unlike efforts to explain organizational outcomes conducted in other disciplines, strategic management research has long recognized that phenomena originating from several levels of analysis play a role in determining organizational effectiveness. To maximize the chances of good performance, a firm needs to occupy a prosperous strategic group within a lucrative industry, for example the commercial banks in Nigeria. In these loci this study stands to investigate the impacts of strategic management as a tool for the attainment of organizational performance in Nigerian commercial banks.
1.2 Statement of Problem
The acute phase of the global financial crisis is past and economic recovery is underway, but recovery remains fragile and is unexpectedly worrisome, as the growth impact of financial and monetary measures wane. The debt levels remain high, there is little growth in mature economies and ventures into stronger financial relationship remain politically and socially problematic. Organizations are seeking growth but much of the fine-tuning has been completed, through the technology revolution and the recent focus on cost reduction proposed by CBN in their policies. Notwithstanding, executives and managers are under relentless pressure to perform, because the competition is intense. Organizations want to increase revenue, improve productivity, attain their goals, operate more efficiently and effectively, be good corporate citizens, have happy, motivated employees, retain satisfied both profitable customers and mostly, find that elusive sustainable competitive advantage.
In other words, the whole essence of establishing financial institution is corroding or defeated if that organization is not arranged and managed in such a way that it will attain its set goals. The excessive wading of imbalance structure and damage control the approaches most adopted by majority of Nigerian financial institutions are responsible for several failures, and colossal losses witnessed among the organizations. However, some close insight from the success of most multinational companies like Citi Ban reveal the importance of strategic management embedded with strong direction and vision. A vision not pursued will become a mere dream and will lead to stagnation, non-attainment of organizational goals and distress. Also the height of corruption, mismanagement, insider’s abuse and soft loan without security or non-collateralized loans amounted to collapse of many banks. These porosity and poor strategic insight pushed the CBN to introduce consolidation, merger and acquisition as a remedy. While none of these challenges is new, what is new is the escalating pressure to get the right direction, track and speed in an increasingly complex volatile and mutually dependent world.
A strategic management plan is imperative to an organization pursuing its objectives. The problem is that many organizations operate on a five-year strategic plan broken into annual budgets, quarterly forecasts, and monthly reports, and which is often disconnected from real events. To take advantage of new opportunities and mitigate
risks within the competitive environment, banks executives must review the strategic management plan on a continuous basis and stand firm to face their challenges. Despite the entire unsafe environment sprouting here and there in Nigerian financial institution, the management has failed to employ more energy in environmental analysis to identify what is wrong, as well as decisions and actions to be taken to ameliorate the challenge. For strategic management to result in superior performance, all the steps in the process need to be effectively managed. A brilliant strategy may put a company on the competitive map and increase its performance. Unfortunately, most companies struggle with implementation and therefore fail in performance enhancement
Despite the fact that strategic planning has brought far reaching revolution which has tremendously transformed most business landscape, it is still plagued with some constraints in the Nigerian banking industries. Some of these constraints include wrong application of strategic planning by Nigerian Deposit money banks, unethical attitude and conduct of bank managers and board of directors, poor organizational structure and non conformity to the rules and standards by the workers towards actualization of the strategic goals. This precarious situation drives the urgency for the implementation of strategic management in our commercial banking industry to maximize performance. Strategic management is important for organizational performance.
1.3 Objectives of the Study
The broad objective of this study is to investigate Strategic Management as a tool for the attainment of Organizational Performance in Nigerian Deposit Banks. The specific objectives sought to:
1. Ascertain the extent to which value chain affects profitability Deposit money
Banks
2. Determine the extent strategic change affect market share Deposit money
Banks in Nigerian.
3. Examine the extent strategic leadership affects customer satisfaction Deposit money banks’ Nigerian.
4. Determine the key challenges of adopting strategic management in Nigerian
Deposit money banks’.
1.4 Research Questions
The following formulated questions will serve as guide to the researcher:
1. To what extent does value chain affect profitability of Deposit money Banks in Nigerian?
2. To what extent does strategic change affect productivity of Deposit money
Banks in Nigerian?
3. To what extent does strategic leadership affect customer satisfaction in
Deposit money Banks Nigerian?
4. What are the key challenges of adopting strategic management in Nigerian
Deposit money Banks?
1.5 Research Hypotheses
The hypotheses formulated below will guide the study:
i. Value chain to a great extent affects the profitability of Deposit money Banks in Nigerian
ii. Strategic change to a great extent positively affects productivity of Deposit
money Banks Nigeria.
iii. Strategic leadership to a great extent significantly affects customer satisfaction in Deposit money Banks Nigerian.
iv. Economic and Poor structures are the key challenges of adopting strategic management in Nigerian Deposit money Banks.
1.6 Significance of the Study
This study will be of immense significance to the Nigerian public, management and employees of the banks,
Nigerian Public: Banking industry contributes a great deal in the development of the Nigerian society. This is true because it plays a very importance role in our society in terms of its numerous financial assistance renders to the society at large. The study will be of great important looking at the role of the banking industry in steering economic development and growth of nation.
Executives or Board and Employee
This study will help executives or board to understand the importance of strategic management on performance of commercial bank. This will help them in highlighting
areas that need to be improved and make strategic decisions that will enhance performance. The study will also help management and employees of the commercial banks to know the best mechanism of implementing strategies and devices for fixing their feedback
Policy makers (government and regulators)
Policy makers (government and regulators); this study will help policy makers to identify whether there is any improvement in the performance of commercial bank and financial industries, this can directly be attributed to strategic management. Therefore the study will help policy makers to ensure high performance.
Investors
Investors; this study will help investors understand various management strategy and measures that the government investors has taken to ensure their performance improves. And also, this study will inform investors as they make decisions of investing in commercial banks.
Future researchers
The study will also be useful to future researchers as sources of secondary data for their research and academic enquiry.
1.7 Scope of the Study
The study focuses on strategic management as a tool for the attainment of organizational performance in Nigerian Deposit money Banks. The banks selected in Enugu state are: First Bank of Nigeria plc, United Bank of Africa plc and Guaranty Trust Bank plc all located in Enugu metropolis. These banks were chosen because they met with the 25billion capital based, there are quoted in Nigeria stock exchange market and have similar mode of operation. The study covers the period of 2007-
2012.
1.8 Limitations of the Study
Attitude of the Respondents
The unwillingness of some of the management to divulge strategic information in the name of confidentiality was limitation to the study and some of the respondents showed negative attitude towards the study because there was no financial benefit
attached while some refused to supply the necessary information probably due to their ignorance of the main purpose of this study.
Non availability of research materials
Being a new area of research in Nigeria, the researcher had the scarcity of research materials which invariably slowed down the pace work. This limitation was minimized by subscribing for research materials through online journals.
1.9 Operational Definition of Terms
The key terms for this study were based on the contextual definition:
Corporate Strategy: corporate strategy as a strategy based on the experiences, assumptions and beliefs of management overtime and which may eventually permeate the whole organization.
Strategic Leadership: Strategic leadership is about transforming an organization through its vision and values, culture and climate, and structure and systems as well as through its strategy.
Strategic Decision Making: According to strategic decision making is seen as a crucial part of the process by which organization adapt to their environments. Strategic Change :A restructuring of an organization’s business or marketing plan that is typically performed in order to achieve an important objective
Strategic Management: strategic management as a stream of decisions and actions, which leads to the development of an effective strategy or strategies to help achieve corporate objectives. In another words, it is concerned primarily with the actions organizations take to achieve competitive advantage and create value for organization and stakeholders.
Customer Satisfaction: Customer Satisfaction is an emotional response to the experiences provided by and associated with particular products or services purchased, retail outlets, or even molar patterns of behavior such as shopping and buyer behavior, as well as the overall marketplace
1.10 Profile of the Banks under Study
1. First Bank of Nigeria Plc
First Bank of Nigeria PLC is a Nigeria-based bank that offers a range of financial. First Bank of Nigeria is a Nigerian bank and financial services firm. It is the country’s third biggest bank. First Bank traces its ancestry back to the first major financial institution founded in Nigeria; hence the name. The current chairman is Prince Ajibola Afonja. The bank is the largest retail lender in the nation, while most banks gather funds from consumers and loan it out to large corporations and multinationals, First Bank has created a small market for some of its retail clients. At the end of September 2011, the bank had assets totaling approximately US$18.6 billion (NGN:2.9 trillion). The bank’s profit after tax, for the nine months ending 30
September 2011 was approximately US$270.2 million (NGN:42.2 billion). First Bank of Nigeria maintains a subsidiary in the United Kingdom, FBN Bank (UK), which has a branch in Paris. The bank also has representative offices in South Africa and China. In October 2011, the bank acquired Banque International de Credit (BIC), a leading bank in the Democratic Republic of Congo (DRC).
The company was named the best bank in Nigeria by Global Finance magazine in September 2006. The firm’s auditors are PricewaterhouseCoopers (Chartered Accountants). The firm has solid short and long term ratings from Fitch and the Global Credit Rating Company partly due to its low exposure to non-performing loans. The firm’s compliance with financial laws has also strengthened with the Economic Financial Crimes Commission giving it a strong rating.
Pre–Independence History
The Bank traces its history back to 1894 and the Bank of British West Africa. The bank originally served the British shipping and trading agencies in Nigeria. The founder, Alfred Lewis Jones, was a shipping magnate who originally had a monopoly on importing silver currency into West Africa through his Elder Dempster shipping company. According to its founder, without a bank, economies were reduced to using barter and a wide variety of mediums of exchange, leading to unsound practices. A bank could provide a secure home for deposits and also a uniform medium of exchange. The bank primarily financed foreign trade, but did little lending to indigenous Nigerians, who had little to offer as collateral for loans.
Post-Independence History
In 1957, Bank of British West Africa changed its name to Bank of West Africa (BWA). After Nigeria’s independence in 1960, the bank began to extend more credit to indigenous Nigerians. At the same time, citizens began to trust British banks since there was an ‘independent’ financial control mechanism and more citizens began to patronize the new Bank of West Africa.
In 1965, Standard Bank acquired Bank of West Africa and changed its acquisition’s name to Standard Bank of West Africa. In 1969, Standard Bank of West Africa incorporated its Nigerian operations under the name Standard Bank of Nigeria. In
1971, Standard Bank of Nigeria listed its shares on the Nigerian Stock Exchange and placed 13% of its share capital with Nigerian investors. After the end of the Nigerian civil war, Nigeria’s military government sought to increase local control of the retail- banking sector. In response, now Standard Chartered Bank reduced its stake in Standard Bank Nigeria to 38%. Once it had lost majority control, Standard Chartered wished to signal that it was no longer responsible for the bank and the bank changed its name to First Bank of Nigeria in 1979. By then, the bank had re-organized and had more Nigerian directors than ever.
In 1982 First Bank opened a branch in London, that in 2002 it converted to a subsidiary, FBN Bank (UK). Its most recent international expansion was the opening in 2004 of a representative office in Johannesburg, South Africa. In 2005 it acquired MBC International Bank Ltd. and FBN (Merchant Bankers) Ltd. Paribas and a group of Nigerian investors had founded MBC in 1982 as a merchant bank; it had become a commercial bank in 2002. In June 2009, Stephen Olabisi Onasanya was appointed Group Managing Director (CEO), replacing Sanusi Lamido Sanusi, who had been appointed governor of the Central Bank of Nigeria
2. United Bank for Africa Plc
United Bank for Africa Plc (UBA) is a public limited liability company incorporated in Nigeria.UBA is a large financial services provider in Nigeria with subsidiaries in
20 sub-Saharan countries, with representative offices in France, the United Kingdom and the United States of America. It offers universal banking services to more than 7 million customers across 750 branches. Formed by the merger of the commercially
focused UBA and the retail focused Standard Trust Bank in 2005, the Bank purports to have a clear ambition to be the dominant and leading financial services provider in Africa. Listed on the Nigerian Stock Exchange in 1970, UBA claims to be rapidly evolving into a pan-African full service financial institution. The Group adopted the holding company model in July 2011.As of December 2011, the valuation of UBA Group’s total assets was approximately US$12.3 billion (NGN:1.94 trillion), with shareholders’ equity of about US$1.07 billion (NGN:170 billion).
UBA’s history dates back to 1949 when the British and French Bank Limited (“BFB”) commenced business in Nigeria. Following Nigeria’s independence from Britain, UBA was incorporated in 1961 to take over the business of BFB. Today’s United Bank for Africa Plc (UBA) is the product of the merger of Nigeria’s third and fifth largest banks, namely the old UBA and the former Standard Trust Bank Plc, and a subsequent acquisition of the erstwhile Continental Trust Bank Limited (CTB).
Ownership
The stock of UBA and its subsidiaries (the UBA Group), is listed on the Nigerian Stock Exchange, where it is publicly traded under the symbol: UBA. The detailed shareholding in the stock of the company is not publicly known at this time.
Corporate profile
Since its historical emergence from the merger of former Standard Trust Bank and UBA Plc, the UBA Group has positioned itself to be Nigeria’s dominant bank and a leading player on the African continent. In 2000, Europe’s frontline Finance and Economy magazine, Euromoney named UBA the Best Domestic Bank in Nigeria, in recognition of the bank’s exponential growth in the past couple of years and the comparatively higher inflow of investment from global finance players. In 2007, Pan- African Newsmagazine awarded UBA the Emerging Global Bank Award indicative of the international bank which has most positively influenced the African continent.
UBA has consistently positioned itself as the bank to beat in Nigeria’s financially strong banking industry. It has grown its total assets by over 345 percent in the last five years, up from NGN 198.68 billion ($1.656 billion) in 2002 to NGN 884.14 billion ($7.368 billion) in 2006. More recently, at the end of the 2008 financial year, it recorded gross earnings of NGN 169.6 billion, profit before tax and exceptional items
of NGN 56.8 billion, profit after tax of NGN 40.8 billion and total assets of NGN 2.2 trillion. UBA has the largest distribution network in Nigeria with over 6.5 million customers in personal, commercial and corporate market segments. As of 30
September 2008, it had over 650 business offices, 296 deployed POS and 1332 ATMs and pioneered cheque acceptance ATMs in Nigeria. Its over 14,000 staff globally are also referred to as “lions and lionesses”. Regionally, the Group has a presence in 18
African countries and in all major financial centers. The bank currently operates in Nigeria, Ghana, Ivory Coast, Cameroon, Sierra Leone, Liberia, Uganda, Benin, Burkina Faso and Senegal, and has unfolded plans to expand its banking operations to
15 additional countries in Africa come 2009. Records indicate that UBA is the only sub-Saharan bank with dual presence in the U.S. and the UK with a US regulated branch presence in New York since 1984, UBA Capital (Europe) in London which was established as a UK regulated investment banking operation in January 2008 and a representative office in Paris, France.
Organization
UBA Group’s operating structure is organized around seven Strategic Business Units(SBUs) and four Strategic Support Units(SSUs), informed by the need to reinforce its leadership in service delivery, relationship management and the execution of its strategy. In addition, the GMD/CEO is supported by the Group Executive Office consisting of the Strategy Office, the Corporate Transformation Office, the Chief of Staff and Advisers to the GMD/CEO.
Subsidiaries in Nigeria
UBA PLC (the Bank): The flagship operation of the Group consisting of UBA PLC Nigeria-North and UBA PLC Nigeria-South.
UBA Capital Africa: This is the investment banking arm covering the African market. The principal activities include Debt & Equity Capital Markets; Sales & Trading; Corporate Finance and Research.
UBA Trustees Limited: Nigeria’s premier trustee company, established in 1964, with aggregate value of transactions in excess of NGN500 billion. UBA Trustees Limited (“UBAT”) is an off shoot of UBA Asset Management Limited (“UAML”), formally UBA Capital & Trust Limited (‘UCAT”), a wholly owned subsidiary of United Bank for Africa Plc (“UBA”). UAML commenced business over 4 decades ago as UBAT
before its subsequent change of name and eventual reorganization which led to the re- incorporation of the new UBA Trustees Limited. Over the years, UBAT has established its dominance as a Corporate Trustee in the Nigerian Money & Capital Markets.
UBA Global Investor Services: UBA Global Investor Services is a division of UBA Plc providing core and value added domestic custody services to Global Custodians and Institutional Investors in respect of investments in securities across Africa. Their services include:
1. UBA Pensions Custodian Limited – UBA Pensions Custodian Limited
(UBA Pensions) was incorporated in September 2005 in line with the Pension Reform Act 2004, and is a wholly owned subsidiary of UBA Plc with paid-up share capital of NGN:2 billion. One of the licensed pension funds custodians, it aims to provide a custodial haven for the savings of Nigerian workers, with a rapidly growing portfolio of assets in custody in excess of NGN 150 billion.
2. UBA Asset Management Limited – UBA Asset Management Ltd (UAML),
incorporated in 1964, is a wholly owned subsidiary of United Bank for Africa Plc (UBA). It is licensed by the Securities and Exchange Commission (SEC) to act as Investment Advisers, Portfolio and Asset Managers. UBA Asset Management Limited offers specialized services in the areas of wealth generation and investment management. Products and services include Mutual Funds, Guaranteed Return Investment, Discretionary Portfolio Management, Employee Savings Plan, Personal Portfolio Plan, Sinking Funds, and Management of Special Funds. With over NGN 30 billion in funds under management, UBA Asset Management is Manager and Administrator to four mutual funds and Wealth Manager to the High net worth.
3. UBA Capital Infrastructure & Principal Investments – This specialist business unit provides infrastructure development and funding solutions across Africa. This includes strategic alliances, private public partnerships, project finance and principle investments and corporate finance advisory services to infrastructure projects.
4. UBA Stockbrokers Limited– The secondary market trading arm of the Group that deals in equities and other fixed income securities in the capital market. With a balance sheet size in excess of One Trillion Naira ($8B), over six
million active customer accounts, operating out of the 2 most vibrant economies in the sub-region – Nigeria and Ghana. UBA Stockbrokers Limited has over seven hundred retail distribution outlets as well as presence in New York and Cayman Island.
5. UBA Registrars Limited – With over 30 years’ experience in Share Register administration services in Nigeria, UBA Registrars Limited emerged from the former UBA Global Markets Limited then engaged in the business of share registration, stock broking and issuing house. It was incorporated in March
2006 as a wholly owned subsidiary of UBA Plc.
6. UBA Metropolitan Life Insurance Company Limited– Formally launched in April 2008 as a joint venture between UBA and Metropolitan Holdings Limited (“Metropolitan”) of South Africa, UBA Metropolitan Life operates in Nigeria with over 100 years Experience in Life Insurance business, Access to over 40 resident full time Actuaries, Strong African Brand, Risk Management expertise, High Corporate governance standards, Large Distribution Network(over 600 branches) and knowledge of the local Nigerian Market.
7. Consumer Banking – Consumer Banking provides customized products &
services for individuals and organizations. The services offered include:
i. Account Services: Savings and Checking (local & domiciliary)
ii. Cards: Debit, Credit and Prepaid iii. Local & Foreign Money Transfer iv. Consumer Credit
v. E-Banking Services (Internet, SMS banking solutions as well as
Corporate e-payments)
Corporate Governance
UBA Plc claims to be committed to high standards of corporate governance. Strong corporate governance practices are allegedly the foundation of the Bank’s risk and control frameworks and supposedly ensure a decision making process that will enhance and protect the interests of all stakeholders. During the year ended 30
September 2008, UBA complied with the provisions of the Group’s Code of
Corporate Governance which is published on the company website.
Key Governance Developments
1. Continuous compliance with the principles laid out in the following codes of corporate governance:
a) Code of Corporate Governance for Banks Post Consolidation,
b) Securities and Exchange Commission (“SEC”) Code of Corporate
Governance for Nigeria; and
c) UBA Group’s Code of Corporate Governance.
2. Internal monthly review of compliance with best practices in corporate governance.
3. Institutionalized evaluation of corporate governance practices of the Board by external consultants.
4. Continuous director and employee training programmes on best practices in corporate governance.
5. Tracking and implementation of best practices in corporate governance. 6.
Adoption of International Financial Reporting Standards (IFRS), advanced approaches of Basel II Prudential Standards, Committee of Standards Organization (COSO) compliance; and plans to implement the South African King III corporate governance code, which will be implemented during the course of the 2009 financial year.
Corporate Governance framework
Presently UBA has a 20-member Board led by a Chairman who is a non-executive Director. There are eight executive Directors on the Board, including the Group Managing Director (“GMD”), Philips Oduoza, and 11 non-executive Directors. The Board has appointed two of the Directors as Independent Directors, subject to CBN approval. It is the responsibility of the Board to provide strategic direction for the Bank. It reviews and approves the major strategies, financial and other objectives and plans of the Bank. It also approves the budget of the Bank. The Board ensures that adequate systems of internal controls, risk management, financial reporting and compliance are in place as well as ensuring the processes for evaluating the adequacy of these systems on an ongoing basis. Other functions of the Board include the following:
i. to select directors, review succession planning and determine management
compensation;
ii. to ensure that the Bank operates ethically and in compliance with all applicable laws and regulations;
iii. to advise management on significant issues facing the Bank;
iv. to approve the disposal and acquisition of assets of the Bank and its subsidiaries, where necessary; and
v. to approve extra budgetary investments and capital projects.
Performance Measurement
The performance of the Board and Directors individually is evaluated by an independent consultant.
Professional Development
In accordance with best practice in corporate governance, the Directors may undertake independent professional advice at the expense of the Bank, on technical issues which require professional advice.
Reporting Standards Adopted
UBA announced in June 2009 that as a “key enabler of business management and development”, it had adopted the International Financial Reporting Standards (IFRS), Basel II Prudential Standards and Committee of Standards Organization (COSO) compliance. This is in spite of the 2012 deadline for Basel II implementation set by the Central Bank of Nigeria. UBA is one of Nigeria’s four biggest lenders.
UBA Foundation
As one of West Africa’s largest and most profitable banks, there is a need for a social contract between the bank, the community and its people. United Bank for Africa became the first bank in Nigeria to institute a foundation, UBA Foundation. Funded with 1% of PBT, UBA Foundation is committed to the socio-economic betterment of the communities in which the bank operates, focusing on development in the areas of Environment, Education, Economic Empowerment and Special projects (“EEES”)
3. Guaranty Trust Bank Plc
Registered on January 17, 1990 by Central Bank of Nigeria, GTB Plc was incorporated in July 1990, as a private limited liability company wholly owned by
Nigeria individuals and institutions. The approval as Commercial Bank followed in August 1990 and operations were started in February 1991.
In September 1996: IPO on NSE Licensed as a universal bank in 2002 and GTB Plc certificate after ISO 9001: 2000 in 2006. On July 26, 2007 the bank was, as very first sub-Saharan bank and first Nigeria joint stock company, listed on London Stock Exchange and Deutsche Borse. The IPO raised US $750,000.00. GTB Plc is a partner of Morgan Stanley and BNP Paribas. The long-term debts of Guaranty Trust Bank Plc are rated BB- by standard & poor’s and AA-by Fitch Ratings, which are the highest ratings for a Nigeria bank.
As one of the New generation banks, they introduced online banking and SMS banking and as very first mobile branches. On March 12, 2008, GTB was given a banking licence for the United Kingdom by the Financial Service Authority. GTB is a partner of EKO Atlantic City a new made Island (820 ha) in the Atlantic ocean, adjacent to Victoria Island Lagos. It will be the home of new Financial District. The building of Eko Atlantic City started in 2009 and is expected to be finished in 2016.
This material content is developed to serve as a GUIDE for students to conduct academic research
STRATEGIC MANAGEMENT AS A TOOL FOR THE ATTAINMENT OF ORGANIZATIONAL PERFORMANCE IN SELECTED NIGERIAN DEPOSIT MONEY BANKS IN ENUGU METROPOLIS
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