We pride ourselves as a service bank — Heritage management

Heritage Bank board and Management had an interactive session with the media where issues bordering on the bank’s vision were raised. ODUNEWU OLUSEGUN was there. Excerpt:

WHAT will you say are the core principles of Heritage Bank?
We pride ourselves as being the service bank and we are not apologetic about it, we are a service company that is the way we see ourselves, a service company in the business of offering financial services. We will rather want to be a bank to be known for helping SMES, opening up a banking space in terms of retail, above all helping people to transfer their wealth after they have created and preserved it to the next generation.

Talking about SMEs, recently Heritage Bank unveiled a N500 million Young Entrepreneur and Students (YES) grant for the real sector. Was that part of the service?
Yes. Our support for the programme arises from the fact that the initiative aligns with the vision of the bank which is to help create, preserve and transfer wealth across generations. This project syncs with our mission as a bank. The age bracket of 18 to 40 years for the beneficiaries also aligns with our corporate goal, just like the key sectors which include agriculture, ICT and the creative industry.
Let’s us look at the bank’s visibility and availability.
We have over 100 outlets across the country by the bridge brand, and we are also working hard to stabilize few out of our commercial centres; so as to ensure that they are properly functioning, effective and efficient alongside with the philosophy of the new management team.

Would Heritage Bank buy all the Subsidiaries?
Yes, all the subsidiaries that were not sold by AMCON, I did not know the ones that they sold, I know all the ones that we saw when we came in and all were part of what we bought when we came in. However by Central Bank regulations, if we are not going to be a Holding Company we have to spine them out. There is a time frame for us to do this, we will keep within these guidelines and sell them out as when due.

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Nigeria at the moment is experiencing some financial crisis, especially with financial controls. What is your take on this?
For me, no matter how much we are scared of naira dollar rates or inflation, we need an economy that is stimulated to do things, the oil price has gone down and our revenue is at a level that it has never been before. This is a very good time for us to organise ourselves to push things into the system that would make the economy to work, manufacturing, power, all of these things must work for banks to continue to be banks. And it is an economy that is driven by government whether we like it or not, the biggest contracts come from the government, revenue come from oil for government, so the banks depends on government money is not something that is unusual in this environment. My view is that it is a very good time for banks to be assisted based on the fact that a lot of money has been pulled out of the system.

With your passion for SME’s, what percentage of your loan book is dedicated to SMEs. And also your plans for other sector, especially agric?
Indeed we came in and discussed robustly on the need for SMEs to be our focus and the reasons are not far-fetched, we believe that SMEs are the actual point for development in the country at large and having conversation that would make everybody begin to look towards that sector was important. For our loan books, before I push certain numbers out, I will need clarifications from our regulators but I can give the percentages. Our SMEs loan book as at today is about 18 per cent in value and in number is about 43 per cent, for agric is about 8 per cent in value and in number is about four per cent.
We intend to grow that number to be in the reverse where 60 per cent of our portfolio is in that market, but is a gradual process and we believe that by next year, given the board supports. We have clearly indicated that we have to go to the board, that is our focus, we need approval for a certain amount of money to be able to do this, that amount need to increase and if they do that, essentially, we might be hitting about 55 per cent in value and nearly 70 per cent in that space in terms of number, probably we can also grow our agric desk for which we are very focused.

Universal banking seemed to be coming back. I want to know your thoughts as regards return to universal banking, and also your bank’s area of focus?
We have not gone back and no bank has actually gone back to universal banking. Essentially, we still remain commercial banks with different authorizations. But for some of us that are in the developmental phase where you are now transiting from one organisation to a merged organisation arrangement, of cause there are some legacy issues where those who have subsidiaries find it difficult to spin them off, you are not allowed to spend further capital on them so you cannot say you are running them essentially, you are mix merging them into transition and during that transition period, you can call yourself a universal bank that you are not.
My personal thoughts on universal banking, competence is important and then commercial banks can stay in the commercial banking space, there are merchant bank that are technically fit to carry out merchant banking activities. We are a commercial bank entity and as a financial intermediation, we want to be seen supporting the SMEs robustly at the retail sector.

When do you have intention of coming to the market and need to be listed on the capital market?
Naturally, banks will want to come to the market but when the conditions are right, we are looking at the conditions and once they are right, we will be advised by the board to proceed to the market. Raising of capital especially economic capital is something that every bank keeps an eye on and we want to be sure that we are in tune with what economy capital is in the capital market.