“I don’t see First City Monument Bank as a family-run business anymore,” says Ladi Balogun, managing director and chief executive of First City Monument Bank (FCMB) based in Lagos.
"It’s a public-owned entity that is trading actively on the stock exchange with over 500,000 shareholders. I’m the only family member on the board and I am certain that my successor will not be a member of the family."
Balogun joined FCMB back in 1995, after working as an investment banker in London and New York. Under his leadership, Balogun has transformed FCMB from a privately held business to a listed company on the Nigerian Stock Exchange in 2004 and from a merchant bank to full service banking group.
“While the family provided the bank’s soul and a long-term outlook, for the business to survive it didn’t make sense to keep it private,” he says. Balogun is part of a growing class in Nigeria that sees value in going public.
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Since the float, Balogun has widely diversified the bank’s remit, and commercial banking and micro-finance are becoming more important. As a result, the bank has vastly increased its client base from 70,000 mainly high-net-worth individuals and businesses served by five branches to two million customers and 270 branches.
The bank’s micro-lending activities that began in 2007 have grown strongly, creating £20 million in annual profit by 2013.
Last year, the bank’s micro-finance business came into being, central to the bank’s financial inclusion programme. Although the project is in its earliest stages, FCMB has already given a few thousand micro-finance loans with a default rate of only 0.5%.
“At the moment, there are only a few banks that are looking to tap the unbanked market and we are taking a lead in this area to help reach the government’s aim to increase the number of banked from 20% to 70% of the population in the next 10 years," says Balogun.
"Financial inclusion is critical for a thriving banking industry and to the overall macro story of a country.”
He adds: “While micro-finance might not be the largest project that our bank undertakes, we do believe it is an essential part of our business because inclusive growth will help tackle social problems by empowering households and farmers.” Farming is the country’s largest occupation, employing 80 million people.
In 2001, under Balogun, the bank was also a leading player in telecoms-sector liberalization, advising the first GSM operator in Nigeria, Econet Wireless Nigeria.
While his brother, Bolaji Balogun, has looked for entrepreneurial opportunities outside of FCMB, Balogun sees the benefits of creating new businesses within one that is established.
“For now I am not interested in pursuing other entrepreneurial projects outside of banking here," he says.
"As a banker, I can keep adding value to the bank, diversifying our business and also help other entrepreneurs realize their goals – which can actually be a lot more fulfilling than being an entrepreneur focused on a single enterprise."