Friday, June 30, 2017 9:47 am
He is a man of astonishing skills for a professional banker. He applied these skills when he assumed duties as Managing Director of Guaranty Trust Bank in Sierra Leone in 2014. Few weeks to his resumption as MD, the bank was in crisis. Today, Gbenga Alade has stabilized and re-positioned the bank to greater height. GTBank is not the biggest, but now the leading bank in Sierra Leone in profitability and technology, making it the bank of choice by many people. He spoke to Abubakar Hashim on the secret of the success of the bank and the challenges facing the banking sector in the Sierra Leone economy
Q: You assumed duties as Managing Director of Guaranty Trust Bank in Sierra Leone three and half years ago when the bank was in crisis. Today, you have not only stabilized situation, but you are now the bank of choice in Sierra Leone. What is the magic wand in this turn around?
There is no magic wand in the turn around. It was not due to my own brilliance. It was a collective enterprise. First of all, I give glory to God. Yes, it is true, I came in at a time there was turbulence, not only within the bank but in the Sierra Leone economy. Few months after I came, Ebola crisis started. In spite of Ebola, I rallied the staff and the bank was able to bend the curve. So we shared the same vision with staff members to bring out the positive change and image the bank retains today.
What is the vision that brings about this positive change the bank retains today?
This vision is to make the bank, a bank of choice for the people of Sierra Leone. We don’t want to be the biggest bank today. We are number 3 but we are today the bank of choice. The bank with the best products. The bank that is digitally prominent and more relevant in the economy. We want to remain relevant in the economy. We want to remain on top of the market, not only in profitability, but in service delivery. Our products are driven by the best technology. This enables us to serve our customers better.
Recently, you were presented two international awards in London. You personally received these awards as the best CEO and best digitalized bank in Sierra Leone. How did you feel and what impact will these awards create in the Sierra Leone economy and beyond?
As a normal human being, when you are rewarded for hard work, you will be happy. That was the first reaction. But these awards are not for me, personally, but for the entire staff and customers. We all worked for these awards. The presenters only look for the head of the bank that is doing so well to make the presentation, in spite of Ebola and the current recession. We are not the biggest bank; we are, perhaps, half the size of Sierra Leone Commercial Bank and Rokel Commercial Bank. Yet, we are doing so well against all the indices used in the performance of a bank.
What are your challenges so far?
It is people that make up an institution. This is one area we have severe challenges. Not only us, all the banks have these challenges, which is having competent people in certain areas of operations. People in area of technology, in the area of risk management, compliance, IT audit are rare to come by in employment. For close to three years, we have been looking for people in IT audit, we cannot find. Even if someone is employed in these areas, after undergoing training for certain period, he leaves for another job for even a slightly higher paid job, irrespective of the investment in training for such personnel. This shows the level of poverty and level of expectations in this market. People change job because of $50 increment in salary.
Particularly in financial management control unit, there have been lots of trainings for staff at head office in Lagos. Before you know, they quit for other jobs. So you start all over again, so this one major challenge. Secondly, another challenge is the area of the banking laws and regulations. They are so tight. There is urgent need for the Central Bank of Sierra Leone to review these laws and policies. For example, we have the highest shareholders fund. We have the largest capacity as a bank in Sierra Leone to take on large ticket transactions. But there is a constraint that you cannot lend more than 300 percent of your shareholders fund, which in itself is out-dated.
It is out-dated in the sense that globally across the world the minimum is 800 percent. Many banks even in the West African sub-region, Ghana, Nigeria, even in small Gambia, Liberia everywhere in West, Central and East Africa, where we have presence, banks can do even over 1,000 percent ian aggregate lending of their shareholders funds. This has to be reviewed by the Central Bank of Sierra Leone. I understand they are looking at it at the moment. Economy can only grow when banks can lend to customers, thereby creating a multiplier effect on the economy.
Another challenge is that we cannot lend dollars to customers. Even to customers that generate dollars as their cash flows. You cannot even lend to them. It’s not right. Gambia, Liberia, South Africa, Ghana, Cote D’Ivoire, everywhere, banks lend dollars to those who generate dollars. Banks here have huge balance sheets, but could not lend dollars. This is not good for the banking industry in Sierra Leone.
Another area is most banks just put their monies in treasury bills. This is the less risky business to do. I don’t see how this will help the economy. That is a wrong approach in getting the economy out of recession. When an economy is in recession, apart from government which is the largest spender, the banks have a critical role to play. Recession is when there is negative growth. To generate growth, banks must lend. Government must spend but banks must also lend. But with high treasury bill rates, banks only succumb to the lazy way of mopping up treasury bills for higher returns, go to sleep, without lending. It not healthy for the economy