What is your assessment of the banking sector in Ghana? What are the trends? How is the competitive environment?
The banking sector is growing. It is very dynamic. It is becoming more product driven, especially electronic products. Many of us in that sector are spending a lot of money, making a lot of investments, improving electronic channels, providing services that five or ten years ago were not available. One of the other features is that governance and compliance are becoming an issue. Bank of Ghana, our regulator, is doing a lot of things such as improving governance and making sure that compliance is at the center of banking in Ghana. The sector has its challenges, of course. But, if you play it right, you can do very well as an institution and also in terms of the services and products that are available to the market.
How do you “play it right”?
In a lot of ways, banking has not changed for a long time; some would tell you, two or three thousand years. You take from surplus, you lend to where there are shortages, and you follow key rules: you do not overleverage your balance sheet, you do not take risks you do not understand, you provide service, and you keep your word. When you play it right, you make sure that integrity is at the center of what you do and that you are careful in the management of the resources that are available to you. Thankfully, banking is a regulated business. There are key ratios and key indices that you have to watch. So, if there is a limit on your liquidity ratio, for example, make sure that you comply. If there is a limit on the amount of loans you can grant, make sure you are compliant. If you are asked to do KYCs for your own good, do it. That is doing things right by not cutting corners, not trying to break the rules, not trying to massage the rules, just doing it as it is supposed to be done. In the short term, it might appear that you are not as profitable or maybe not growing as big as your so-called competition, but in the long run, you are better off because you build a sustainable business that goes from strength to strength. That is what we mean by saying “doing it right.”
The Bank of Ghana recently asked all the banks to reach a 400 million cedi limit. What is your progress?
Last year, the Bank of Ghana raised minimum capital for banks in Ghana to 400 million cedi, which is about 95 million dollars, and all banks were supposed to comply by the end of this year, 2018. For us as First Atlantic, we are on our way. Indeed, our capital raising projects started before the announcement by the Bank of Ghana and we have gone very far. We are hoping that by the end of the third quarter, we will have reached and surpassed the threshold. We have been blessed and lucky to have attracted institutional investors, and recently we entered a partnership with a private equity firm out of Dakar, AFIG, and we have received a lot of support from our existing shareholders, and a lot of new investors are also coming onboard. We are doing very well in that regard. We believe that by September, we will be able to announce to the world that we have crossed the minimum requirement.
Do you have additional plans?
Capital is capital, it does not solve all your problems. It deals with one aspect of what banking regulation should be. If you do have capital, what do you do with it? You need to use it to do business, to make more money for your shareholders and your stakeholders. For us, we are consolidating our business in Ghana, especially on the commercial and the retail end. We are spending a lot of time, much more than money, on electronic channels. Payment channels are bringing convenience electronically to this market. We are agreed as a bank in terms of where we are going to expand our business across first West Africa and then the rest of Africa shortly after that. We are building a global bank out of Ghana. That is the vision that we have and that is what we are working to achieve.
What are the first steps to achieve this international mission?
We are consolidating our business in Ghana and we have grown tremendously over the last five to six years. We have expanded the franchise across the whole of Ghana and we are deepening our play in the electronic banking channels. We make sure that governance is at the core and at the center of everything we do. And having done that, with the new capital that we are raising, it is time to go outside. So, first of all, we are looking at markets in West Africa where we are already and where we understand more in terms of the cultures, the language, the people. It is a market that we know well. Many of us have experience across West Africa and we believe it is an easier market for us to start with. So, we will look at them and we will begin that expansion by God’s grace, and hopefully that will be the launch pad to the rest of Africa.
What are you doing in terms of electronics? You already have the FlexiPAY product. Do you have other apps?
First is the realization that banking is changing and electronic banking, or what we call e-banking, is changing the landscape. We have taken a step forward in our thought process to understand that, first of all, and to agree that we are going to play there. In doing so, we have invested a lot of effort and a lot of capacity in that side of our business because what we see in the future is that the electronic banking space will become even bigger than traditional banking. One of the things we have done is to develop a mobile money app called FlexiPAY which is doing very well in the market. Our aim is to become number one on the mobile money platform in Ghana. We believe this is achievable and we are working towards it. It allows you to transfer money, pay for services, all across the spectrum. We have had some tremendous success so far and we are pushing on.
What are your competitive advantages? You are not only directed towards the consumer, but you are a universal bank involved in private banking and the corporate segment. How do you distinguish yourself?
Two things: integrity and service. The market knows and understands that here at First Atlantic Bank, we do things properly. If we tell you we are going to do something, we are going to do it. If we are not able to do something, we tell you. That is the first thing. The second is service. We call it the Purple Experience: service beyond the normal. It is simple. It is seamless. And we are continually improving on it. Those are the two things we know are our competitive advantage. We can talk about things like liquidity and all that, but people have it in varying degrees. But at the core of what we do is the integrity of this system, of these people that work here, and the excellent service that we offer our clients.
How do you interact with the international community, banking system and clients that might be international? Do you have agreements outside of Ghana?
Thankfully, we are not a new bank. This is a 23-year-old institution. So, we have built relationships over time and we invest our time and money sustaining those relationships. That is the first point of contact. We have been in this business for a while, we have corresponding banks, we have money transfer partners, we have international investors, we have some foreign clients, and we have local clients who we help with their international businesses. Over time, we have built alliances across the business community internationally and our reputation speaks for itself. We are very deliberate in those we partner and deal with. We have to deal with people on the basis of understanding and mutual respect. We are very careful of who we do business with here and elsewhere. We take the right steps to sustain and to nurture those relationships.
Is there an area or a sector you want to grow or push for specifically?
We are looking for ways of supporting the side of things, especially agriprocessing. Moving from primary products to secondary products is an area that we are very interested in. We are engaging all the stakeholders to see how we can do much more in that area. We also believe that providing and improving on the infrastructure base of our economy is important. How can we as a commercial bank help to facilitate that? Indeed, commercial banks are not supposed to fund or sponsor long-term projects, per se, but there are other ways of supporting that and we are looking into them.
What are your challenges?
It is a people business. So, the key challenge, obviously, is making sure that everybody is aligned, and everybody understands what we are doing, and everybody buys into the culture that we are trying to build. Once you get the people issues right, you are able to do everything that you want to do. The key challenge is the people issues, the HR issues.
You have recently launched some new operations such as FlexiPAY. Are there recent or future operations that you will launch in 2018 that you are especially proud of?
FlexiPAY is key and in using FlexiPAY, we have made payments in Ghana easy for sectors that normally would not have had access. For example, if you are a churchgoing individual in Ghana, you can use our FlexiPAY platform to make whatever payments you want to make to the church: your tithe, collections, donations, whatever it is, across the spectrum, Orthodox, non-Orthodox, Pentecostal, Charismatic. FlexiPAY has been made available to that segment to do their business in a seamless, easy manner. We are beginning to see what FlexiPAY offers with other sectors as well. If you are an individual, for example, and you employ four or five people who work with you, you do not have to go to the bank or call your relationship officer on a monthly basis. On FlexiPAY, you can make all those payments and they receive it instantly and everybody is happy. Those are the kinds of things that encourage us to do more.
Project yourself in two to three years’ time, in the medium term, what would you like to have achieved by 2020 or 2021? What will First Atlantic Bank be if everything goes according to your plans?
In three to five years’ time, we would like First Atlantic Bank to have established ourselves as one of the top five banks in Ghana. Also, by that time, we want to be recognized as a West Africa player. Those two things are what we look forward to.
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