Godwin Emefiele on corporate governance | Zenith Bank | Video

Transcript

Africa’s banking market – it offers vast potential, while remaining relatively untapped. Zenith Bank CEO Godwin Emefiele discusses the bank’s long history of strong risk management and corporate governance practices, and its importance for attracting investors in light of Zenith’s listing on the London Stock Exchange.

World Finance: Godwin, what level is banking in Africa currently at?

Godwin Emefiele:The level of banking in Africa has evolved from just a rudimentary level, I would say, several years ago, to, I would say, among some of the more developed in the world today.

If you consider the fact that African banks today rank among the biggest banks in the world. Certainly African banks have come a long way. Both in terms of shareholders’ funds, in terms of profitability. Some of the banks in Nigeria and South Africa particularly have really come of age, and I think we need to commend that.

“The level of governance in the financial system is a major advantage for Africa today”

World Finance: Well people talk about the potential in Africa, but in reality, how easy is it to operate there?

Godwin Emefiele: If you consider the fact that several years ago, Africa was mainly dominated by military regimes? Then today Africa has come of age, because practically all the countries in Africa today are democratically elected governments. I would think the level of development in terms of politics has really come of age.

And when you have an environment where democracy has been properly instituted, then you can be sure that a level of governance that you have in the financial system will be strong. And I think that is a major advantage for Africa today.

World Finance: Focusing on corporate governance now, and how developed is Africa in this field?

Godwin Emefiele: The level of transparency in doing business has improved, particularly in the very recent past. For instance, in Nigeria the monetary authorities insist that banks must publish their accounts at the same time. The monetary authorities have begun to insist that even the boards of banks need to get involved in some of the detailed issues that are involved in running banks today.

And so today I think, the level of governance has improved.

“The level of transparency in doing business has improved, particularly in the very recent past”

World Finance: What’s Zenith’s approach to corporate governance, and what challenges have you faced, and as a result, overcome?

Godwin Emefiele: We’re really come off it because in 23 years when the bank was set up, the bank was set up with strong risk management policies and practices put in place, and strong governance also was put in place. So today, when people begin to talk about, “Oh, what is the level of governance?” we take it for granted. Because the bank itself was set up with strong risk management and governance practices put in place.

World Finance: But what were the challenges you faced in that field, and how did you overcome them?

Godwin Emefiele: Some of the challenges are that because a new regulation is coming, and certain things need to be done the way they’re supposed to be done. At the initial stage they tended to be alien to our environment, but of course, we were able to overcome them by insisting that we had the right people in the board, we had the right people taking on certain jobs in the bank. And with that, the challenges became something very, very easy for us to overcome.

World Finance: How are Zenith’s shares distributed?

Godwin Emefiele: In 2004, Zenith became a publicly quoted company on the Nigerian Stock Exchange, and of course earlier this year our shares were quoted on the London Stock Exchange. So as a public company, you find that the shares can be easily traded publicly on the Nigerian Stock Exchange, you can pick up Zenith’s shares on the exchange.

“Before we listed a GDR on the LSE there were companies in different parts of the world that could not access our shares”

World Finance: Well you just mentioned that Zenith has been listed on the London Stock Exchange, so what impact has this had on your company?

Godwin Emefiele: The impact has been tremendous, in the sense that, you find that before we listed a GDR on the London Stock Exchange, there were certain companies in London and different parts of the world that would have liked to access Zenith Bank’s shares, but there were certain restrictions placed on them, that they cannot come directly into the Nigerian Stock Exchange to procure those shares. They couldn’t come to buy those shares, but by being listed on the London Stock Exchange, it is easy for them to go onto the floor of the London Stock Exchange to buy Zenith Bank shares.

World Finance: So finally, what would you say are the major challenges that the African banking sector faces, and how do you see them being overcome?

Godwin Emefiele: Basically two challenges here; challenges in the sense that banks, particularly in Nigeria, have to provide power for themselves. But of course recently, with government divesting from power, and then giving the authority to private sector institutions to generate and distribute power, banks will now begin to focus more on their banking business, rather than providing power.

Second, I would say the Nigerian banking industry was dominated primarily by cash. But with the Central Bank of Nigeria bringing the cashless policy into place, we find that less emphasis is being placed in picking up cash, but more on doing electronic banking.

World Finance: Godwin, thank you

Godwin Emefiele: Thank you very much.