In its usual tradition of quiet and peaceful change of baton, First Bank (Nig) Plc has since effected a change of its chief executive officer with Lamido Sanusi taking over from Jacob Ajekigbe. Who is Sanusi, what has he to offer and what sort of management style would he be bringing to the table? WILLIAMS EKANEM attempts answers to these questions which seems to be bothering its teeming customers.

With the first 100 days of Lamido Sanusi as the new managing director of First Bank Plc getting close, a check list of his activities since January 1, 2009 that he assumed office becomes imperative.

Taking advantage of what was generally seen as a smooth transition process; Sanusi is expected to build on the achievements of immediate past managing director, Jacob Ajekigbe to take the centenary bank to the next level of market leadership.

The circumstances make it easier for Sanusi, considering the fact that he was not recruited from outside First Bank to take over the mantle of leadership in the respected bank.  As an executive director for some years, he is better placed to correctly steer the wheel of progress of the bank on the right path.

As executive director, risk management, reports say Sanusi embarked on a process of revamping First Bank’s credit risk management system in line with global best practices to address current credit risk management challenges in an increasingly competitive market and effectively position the bank to leverage intense market competition.

Getting Started

Although it may be too early to effectively evaluate Sanusi’s performance since assumption of office, the few things that have been heard from the bank between January and now include speculations on staff rationalization regarding which some managers were speculated to have been told to seek greener pastures elsewhere, even though the exact number of those affected is still a matter of guess work in the local media.

What however got a blazing media attention since the coming of Sanusi is the appointment of Citibank’s risks management guru, Mrs Remi Odunlami, as executive director, risk management.

Odulanmi, with  a degree in mathematics from the University of Warwick joined Citibank in 1990, became the first female in Africa within Citibank to be appointed senior credit officer and was named executive director by Citibank only last year

That move has been largely applauded, turns the searchlight on how the issue of risk management has suddenly topped the log of challenges faced by Nigerian banks as they make the transition from the consolidation era to one in which the quality of assets is perhaps the most significant statement of a bank’s worth.

This singular activity of Sanusi, more than any thing else shows the direction he intends to drive the bank. Specifically, if the local proverbial saying that “the morning tells how the day would be” is anything to go by, then it can be correctly stated that the new First Bank chief executive officer would be risk-focused.

Indications to this emerged even prior to his appointment when Sanusi in a presentation “Essentials of a Sound Risk Management Framework in Banks” pointed at the example at Citibank with a chief risk officer as a best practice benchmark.

Subscribing to the exigency of a chief risk officer in the bank, Sanusi is of the opinion that the officer ensures corporate-wide risks, determines appropriates exposure levels and limits as well as establish risk management standards and ensures outgoing appropriateness, amongst other functions.

Why the premium on?

Risk management is the process of identifying and evaluating risks and selecting and managing techniques to adapt to risk exposures. Bismark Rewane adds that it is the mental discipline for evaluating and monitoring risks which could be operational, credit, reputation, environmental and business risk.

According to him, risk management assumed greater importance for banks lately because with the growth in size, banks now have to deal with an exponential increase in the number and variety of customers and in the volume done per customer. He also raised two red flags – there is a dearth of good risk managers for the size of today’s banks and there is also possibility that bankers themselves could become compromised because of the huge stake involved.

In recent years, losses incurred as a result of improper business practices, failed process and other forms of risks have mushroomed across banks around the world.
Mr Emeka Emuwa, managing director, Citibank, Nigeria is of the opinion that “banks are today risk machines as they take risks, transform and embed them in banking products and services. According to him, banks which proactively manage their risks have a decisive competitive advantage over others.

The pathway

This may directly be  why Sanusi  intends to invest all his energy  in not only designing measures aimed at minimising divergence of outcomes from expectations and achieve more predictable outcomes, but also ensuring that those measures are put in place, continuously and implemented to serve their purpose.

In particular, Sanusi would be seen working to design a best risk management organisation especially now that he has a risk specialist whom he believes can coordinate the bank’s management effort. This way, he would succeed in ensuring strong and visible commitment from top management that has central oversight of risk management across the entire bank including its many subsidiaries.

As part of his blueprint for best practice in risk management, Sanusi would seek to find new answers to how operational risk management functions and should be organised; clearly define accountability as well as subscribe to best practices as mandated by Basel 11.

Put together, all these risk-focused initiatives, analysts say, would minimize erosion of earnings or capital through ensuring avoidable losses from frauds, system failures and other operational inefficiencies and disruptions.

When achieved, this is expected to build a platform that will not only increase but also sustain the steam of growth at First Bank.

The Man Sanusi

The appointment of Sanusi as MD/CEO, First Bank makes him the first Northerner to head the centenary bank.

Born in 1961, Sanusi, is a grandson of the 11th Fulani Emir of Kano, Muhammadu Sanusi. A graduate of Economics from Ahmadu Bello University, ABU, Zaria, in 1981, he also obtained a Masters from the same university. He started a career in academics, teaching undergraduate Economics at ABU (between 1983 and 1985) before veering into the banking world. His banking career took off in ICON Limited (Merchant Bankers), where he put in seven years, gaining wide experience in Issuing House activities, Financial Advisory Services, Privatisation, Debt-Conversion and Credit & Marketing.

Thereafter, he moved to United Bank for Africa Plc as a Principal Manager, climbing to the position of Deputy General Manager (January 2002) and General Manager (March 2005), before joining the First Bank team.

As general manager, he anchored the transformation of the credit risk management division into an Enterprise-Risk Management Sector and spearheaded UBA’s Basel 2 focus by establishing the framework, policies, processes and systems necessary for compliance with the guidelines of the New Capital Accord.