100 Days After CBN's Board Removal: Know When to Hold, Fold and Walk Away

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Saturday, October 02, 2021 05:00 AM / by Proshare Research/ Header Image Credit: EcoGraphics


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Beyond the complex numbers of an analyst's spreadsheet, Kenny Rogers's The Gambler song plays softly in the background to FBN's recent saga. Holding, folding, and walking away is simple but not random; the poker or bridge cards tell a story, and the hero at the end of the tale is the player that discerns the moves of others and creates an opportunity to ride upon their foibles.

 

However, corporate card play is notably different. The intelligent corporate strategist is not obsessively worried by business rivals if generic marketplace strategies such as product or service differentiation and cost containment (Michael Porter's five forces surrogates) are used as dummy moves to disguise the actual intention of reimaging and redefining the marketplace or choosing to play a market game situated in uncontested commercial territories (Kim and Mauborgne's blue ocean shift).

 

A few pointers to the path of corporate sustainability include the following:

  • Understanding that customer loyalty is out and bargain hunting in.
  • Realizing that at the top of market penetration and dominance is user experience and interface (UX/UI).
  • Corporations that lounge will hit the ground. Speed, efficiency, and ease of use are becoming critical to customer satisfaction as the concept of 'satisficing' becomes a bedrock of retaining customer patronage. Within this context, FBN's front desk must be the best-in-class; otherwise, it would crumble in the face of more challenging and more customer-centric rivals.
  • Millennial and post-millennial customers are partial to companies with high environmental, social, and governance (ESG) standards. The higher standards of corporate governance expected by millennial customers support the CBN's timeliness to review board appointments at the Holdco and its bank and the subsequent decision to make changes.
  • FBNH and FBN need to raise their artificial intelligence (AI) and machine learning (ML) quotient. Business analysts note that the battle for the future will be a fierce fight for a larger market share of a tech-savvy customer base uninterested in excuses and impatient with laggards. The new marketplace is not just about size but also flexibility and creativity; the success of future businesses, in the words of IBM's one-time CEO, Lou Gerstner, requires that "elephants learn how to dance."; and
  • "Nowcasting" or using multiple models to predict consumer behaviour will become a science and corporate art form that FBNH/FBN and its rivals must master if they must survive the brutal competitive battles to come. Market disruptions must be built into corporate strategies so that a situation like the high exposure of FBN to the oil and gas and energy sectors in 2015/2016 does not repeat itself and force the lender into a dire situation of multiple loan defaults (see illustration 12 below).

 

Illustration 12: The Hard Road to Sustainability

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The road to the future will be challenging and gruelling; yet, if FBNH and FBN can resolve administrative and interest conflicts, the lender could hold its own in the Nigerian Tier 1 banks committee. However, if stubborn resistance to external and internal change is allowed to fester, the circus trick of stacked gambling cards will come crashing down.


 


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Downloadable Versions of 100 Days After CBN's Board Removal: First Bank's Shaky House of Cards Report (PDF)

1.      Executive Summary: 100 Days After CBN's Board Removal: First Bank's Shaky House of Cards -  September 19, 2021

2.     Full Report: 100 Days After CBN's Board Removal: First Bank's Shaky House of Cards  -  September 19, 2021


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Related Articles/References

1.    Of First Bank and Bad Debtors; A System's Throbbing Headache - Apr 30, 2021 - Proshare Editorial

2.  CBN Removes Boards of First Bank of Nigeria, FBN Holdings; Appoints New Chairmen - Apr 29, 2021 - Proshare News

3.   Analyzing the H1 2017 Performance of FBNHoldings Plc - A Comprehensive Report/Review on the Company - Oct 23, 2017, Proshare Research

4.   FBNHoldings Plc Q1'2017 Performance Assessment Report Updated - Sep 25, 2017, Proshare Research

5.   Bank NPLs (23) - The Case for a New Approach - Jun 07, 2020 - Debtors Africa

6.  W. Chan Kim and Renee Mauborgne (2004) "Blue Ocean Strategy" 

7.  Board Governance: A Thin Line Between Oversight and Operations - Sep 28, 2020 - IoD Centre for Corporate Governance

8. Leadership, Change and Corporate Transformation - The Nigerian Experience  Nov 07, 2017, Olufemi AWOYEMI - Proshare

9.   CEO Remuneration 2021 Report: From COVID to Collaboration - Aug 01, 2021, Proshare Research

10. Memo to the Market - The NSE, Oscar Onyema Foundation and Corporate Governance - Aug 20, 2018, Olufemi Awoyemi, Proshare

11.   FBN Holdings Plc - IR Page on Proshare Markets - Proshare Research

12.  Annual Accounts - IR Page in Proshare - Proshare Research

13.  Bernard Longe wins suit against First Bank Plc, Supreme Court decides today - Mar 05, 2010, Proshare



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Related News from the Report

1.      ARMA: Forecasting FBNH's Year-End Share Price - Oct 01, 2021

2.      100 Days After CBN's Board Removal: The Analyst Buggy Train - Sep 30, 2021

3.     FBN Holdings Valuation: Turning the Analyst's Lenses on FBNH's Value - Sep 29, 2021

4.     FBNH 100 Days After CBN's Board Removal: The FUGAZE - Sep 28, 2021   

5.     Of FBNH Numbers and Tables: A Look at the FBNH Ratios - Sep 27, 2021   

6.     Of FBNH Numbers and Tables: The Statement of Financial Position - Sep 26, 2021

7.     Of FBNH Numbers and Tables: The Trend of Cost and Profitability - Sep 25, 2021

8.     Of FBNH Numbers and Tables: Understanding Performance Patterns - Sep 24, 2021

9.     Adeduntan's Need for New Glasses: Confronting the Legacy Question -Sep 23, 2021

10.  First Bank Board Removal: When Boards Blur Vision - Sep 22, 2021

11.   First Bank and Institutional Learning - A Sense of History - Sep 21, 2021

12.  100 Days After CBN's Board Removal: First Bank's Shaky House of Cards - Sep 19, 2021


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 Proshare Nigeria Pvt. Ltd.

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