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Business | Debtors & Recovery

100 Days After CBN's Board Removal: Know When to Hold, Fold and Walk Away

Oct 02, 2021   •   by   •   Source: Proshare   •   eye-icon 2224 views

Saturday, October 02, 2021 05:00 AM / by Proshare Research/ Header Image Credit: EcoGraphics


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Beyondthe complex numbers of an analyst's spreadsheet, Kenny Rogers's The Gamblersong plays softly in the background to FBN's recent saga. Holding, folding, andwalking away is simple but not random; the poker or bridge cards tell a story,and the hero at the end of the tale is the player that discerns the moves ofothers and creates an opportunity to ride upon their foibles.

 

However,corporate card play is notably different. The intelligent corporate strategistis not obsessively worried by business rivals if generic marketplace strategiessuch as product or service differentiation and cost containment (MichaelPorter's five forces surrogates) are used as dummy moves todisguise the actual intention of reimaging and redefining the marketplace orchoosing to play a market game situated in uncontested commercial territories(Kim and Mauborgne's blue ocean shift).

 

A few pointers to the path of corporate sustainability includethe following:

  • Understanding that customer loyalty is outand bargain hunting in.
  • Realizing that at the top of marketpenetration and dominance is user experience and interface (UX/UI).
  • Corporations that lounge will hit the ground.Speed, efficiency, and ease of use are becoming critical to customersatisfaction as the concept of 'satisficing' becomes a bedrock of retainingcustomer patronage. Within this context, FBN's front desk must be thebest-in-class; otherwise, it would crumble in the face of more challenging andmore customer-centric rivals.
  • Millennial and post-millennial customers arepartial to companies with high environmental, social, and governance (ESG)standards. The higher standards of corporate governance expected by millennialcustomers support the CBN's timeliness to review board appointments at theHoldco and its bank and the subsequent decision to make changes.
  • FBNH and FBN need to raise their artificialintelligence (AI) and machine learning (ML) quotient. Business analysts notethat the battle for the future will be a fierce fight for a larger market shareof a tech-savvy customer base uninterested in excuses and impatient withlaggards. The new marketplace is not just about size but also flexibility andcreativity; the success of future businesses, in the words of IBM's one-timeCEO, Lou Gerstner, requires that "elephants learn how to dance."; and
  • "Nowcasting" or using multiplemodels to predict consumer behaviour will become a science and corporate artform that FBNH/FBN and its rivals must master if they must survive the brutalcompetitive battles to come. Market disruptions must be built into corporatestrategies so that a situation like the high exposure of FBN to the oil and gasand energy sectors in 2015/2016 does not repeat itself and force the lenderinto a dire situation of multiple loan defaults (see illustration 12 below).

 

Illustration 12: The Hard Roadto Sustainability

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Theroad to the future will be challenging and gruelling; yet, if FBNH and FBN canresolve administrative and interest conflicts, the lender could hold its own inthe Nigerian Tier 1 banks committee. However, if stubborn resistance toexternal and internal change is allowed to fester, the circus trick of stackedgambling cards will come crashing down.


 


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Downloadable Versions of 100 Days After CBN's Board Removal: First Bank's Shaky House of Cards Report (PDF)

1.      Executive Summary: 100 Days After CBN's Board Removal: First Bank's Shaky House of Cards -  September 19, 2021

2.     Full Report: 100 Days After CBN's Board Removal: First Bank's Shaky House of Cards  -  September 19, 2021


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Related Articles/References

1.    Of First Bank and Bad Debtors; A System's Throbbing Headache - Apr 30, 2021 - Proshare Editorial

2.  CBN Removes Boards of First Bank of Nigeria, FBN Holdings; Appoints New Chairmen - Apr 29, 2021 - Proshare News

3.   Analyzing the H1 2017 Performance of FBNHoldings Plc - A Comprehensive Report/Review on the Company - Oct 23, 2017, Proshare Research

4.   FBNHoldings Plc Q1'2017 Performance Assessment Report Updated - Sep 25, 2017, Proshare Research

5.   Bank NPLs (23) - The Case for a New Approach - Jun 07, 2020 - Debtors Africa

6.  W. Chan Kim and Renee Mauborgne (2004) "Blue Ocean Strategy" 

7.  Board Governance: A Thin Line Between Oversight and Operations - Sep 28, 2020 - IoD Centre for Corporate Governance

8. Leadership, Change and Corporate Transformation - The Nigerian Experience  Nov 07, 2017, Olufemi AWOYEMI - Proshare

9.   CEO Remuneration 2021 Report: From COVID to Collaboration - Aug 01, 2021, Proshare Research

10. Memo to the Market - The NSE, Oscar Onyema Foundation and Corporate Governance - Aug 20, 2018, Olufemi Awoyemi, Proshare

11.   FBN Holdings Plc - IR Page on Proshare Markets - Proshare Research

12.  Annual Accounts - IR Page in Proshare - Proshare Research

13.  Bernard Longe wins suit against First Bank Plc, Supreme Court decides today - Mar 05, 2010, Proshare



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Related News from the Report

1.     ARMA:Forecasting FBNH's Year-End Share Price - Oct 01, 2021

2.     100Days After CBN's Board Removal: The Analyst Buggy Train - Sep 30, 2021

3.    FBN Holdings Valuation: Turning the Analyst'sLenses on FBNH's Value - Sep 29, 2021

4.    FBNH 100 Days After CBN's Board Removal: TheFUGAZE - Sep 28, 2021   

5.    Of FBNH Numbers and Tables: A Look at the FBNHRatios - Sep 27, 2021   

6.    Of FBNH Numbers andTables: The Statement of Financial Position - Sep26, 2021

7.    Of FBNH Numbers and Tables: The Trend of Costand Profitability - Sep25, 2021

8.    Of FBNH Numbers and Tables: UnderstandingPerformance Patterns - Sep24, 2021

9.    Adeduntan's Need for New Glasses: Confrontingthe Legacy Question -Sep23, 2021

10.  First Bank Board Removal: When Boards Blur Vision - Sep22, 2021

11.  First Bank and Institutional Learning - A Senseof History - Sep21, 2021

12. 100 Days After CBN's Board Removal: First Bank'sShaky House of Cards - Sep 19,2021


Proshare Nigeria Pvt. Ltd.


 Proshare Nigeria Pvt. Ltd.

 

 Proshare Nigeria Pvt. Ltd.

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