We Project Highest Returns For Bank PHB’s Investors - Francis Atuche

Francis Atuche

Francis Atuche, the Managing Director, Bank PHB, recently spoke to a team of journalists in Lagos about the bank’s ongoing public offer and other sundry issues. Group Business Editor, Lanre Oyetade, was there. Excerpts:

What stands Bank PHB out? What is the unique selling point for the bank?
We anticipate the financial needs of our customers and create need-specific products to satisfy the customer. Besides we are also consistently seeking innovative ways to increase the financial options available to our customers to enhance their financial well being. For us, the financial well being of our customers is critical. That is why retail banking is our forte. Service, delivered in the Bank PHB way is the common denominator in all our offerings. 

What motivated the brand-driven campaign of the bank?
Your brand is you. It is the mirror through which you are perceived by your customers and potential customers. It determines their interaction with you. Your financial well being, whether as an individual or an organisation, is dependent on how your brand is perceived. For the fact that we have been able to build one of the most recognisable financial brands in Nigeria in two years is a testimony to how much we value the brand.

Your bank’s recent advertisements have been commended and also won awards for sending positive, inspirational messages. Are they a true reflection of the bank’s work ethics?
‘Be you, be free, be brilliant’ is what we are. For you to excel in life, you have to be you; you have to be free and you have to be brilliant. That is what Bank PHB is all about. Right from the Training School, Bank PHB employees are taught to be Bank PHB and live Bank PHB in both their personal life and work life. That way, they excel in both. We are strengthened by the various awards that we have been privileged to receive and are, at the same time, challenged to remain progressively consistent.

Bank PHB also won many awards in Corporate Social Responsibility. Why the focus on CSR?
No organisation progresses without the support of its immediate business environment. So for us, it is a key business decision to ensure we plough back into the society some of the money they have helped us make.  Our focus in CSR is the youth and that is strategic because they represent the future of our great country, Nigeria, and are unfortunately faced with critical challenges. So, our intervention through our National Scholars Scheme, which provides scholarships to students in each state of the federation and builds modern well-equipped libraries in selected secondary schools, are aimed at helping youths meet their potential and promise. We have also had the privilege of being the first Nigerian organisation to be selected by key nations in partnership in their global programmes – the US government, in its most prestigious Fullbright Scholarship, and the British Council’s International Young Creative Entrepreneurs, IYCE, programme.

What is special about the Bank PHB Offer? What are you doing differently? In other words, why should an investor buy Bank PHB shares?
This is the first time Bank PHB is approaching the market to raise funds since the consolidation of the Nigerian banking industry compared to most other banks that have repeatedly approached the market. Second, the offer price is well below our fair value, which most financial analysts have placed between N26 to N35 per share. There are several reasons why investors should buy our shares. But perhaps, the most important is the fact that right now, it offers you the best opportunity to make good returns on your investment. Most analysts have placed a “strong buy” recommendation on the stock.

What does the IPO promise the typical Nigerian investor?
Good returns on investment. To date, we have offered investors that bought into our private placement in 2005 over 500 per cent returns on investment. We have a very detailed and ambitious expansion plan and believe sincerely that so far, Bank PHB has only fulfilled 10 per cent of its potential. Any investor that buys into Bank PHB still stands to reap up to 90 per cent of our potential.

What informed the offer being made at N17 per unit instead of the over N30 it is selling at?
This is our Initial Public Offer as earlier mentioned. In pricing IPOs all over the world, the trend is to make it as attractive as possible to encourage as many shareholders as are interested to be part of it. That is why we are priced at a significant 33 per cent discount below the market price of N25.51, which most analysts agree is way below our fair value.

What informs your statement that you will not carry out a second round of share reconstruction?
We have already done the needed share reconstruction. In going forward, we believe we will grow our earnings and profits enough to provide more than adequate returns to our shareholders.

In the event of an over-subscription, will Bank PHB accommodate the excess subscription?
To the extent of regulatory requirement, which allows us to absorb about 25 per cent of the oversubscription. However, there is a preferential allotment of 55 per cent, which we believe will take care of special interests.

What are the financial projections of the bank?
As contained in our prospectus, we have made a highly conservative projection, which shows growth rates well below our historical five-year growth rate trends. This shows that we have capacity to surpass our forecasts.

What is the bank’s branch expansion strategy, nationally, continentally, and globally?
In the next year, we expect to expand our branch network to about 240 all over the country. Our Pan- African expansion is also on course and we expect to have branches in major African countries within the same period. Our Pan-African expansion strategy will however be dependent on how fast we get regulatory approval in the respective countries.

Banks have been accused of not impacting as expected on the real sector, post-consolidation. If this is true, can you give reasons why this so?
I believe the real sector is the first and primary beneficiary of the banking consolidation exercise. Interest rates are now in low double digits compared to pre-consolidation, and credit expansion to the sector has gone up steeply. But you should remember that it is not everyone that can benefit. Banks are custodians of people’s funds and they will only give those funds to businesses and people who clearly show that they can return those funds.

How were you able to get Donald Trump’s Apprentice - such a huge global property – to come to Nigeria?
It is partnership with Storm Records and The Executive Group. They brought the franchise and we, realising it aligns with our objectives of inspiring the Nigerian youth to achieve their potential, decided to buy into it. It is not a question of money. It is about ideals that can change Africa for the better; and being the type of organisation we are, we could not just afford to ignore such an opportunity.

Do you think the reality show will improve your brand? In what ways are you envisaging this?
Reality Shows all over the world are popular and have proven to be one of the easiest ways to connect with the audience. It will not only improve our brand but it will communicate what we stand for – an institution that has very strong beliefs in the future of Nigerian and African youths to surmount the challenges of their environment.

Where do you see Bank PHB in the next five years?
One of Africa’s top 10 leading financial institutions, carrying out business in a socially-responsible manner, a benchmark for service excellence and providing its shareholders with one of the best returns in the financial industry.

Any parting words for Nigerians?
Be you, be free, be brilliant! Nigeria is a great country. Africa is a continent of vast opportunities and interests. Bank PHB is set to partner you into that future. Be part of us. Invest in us.