Laye,



Thanx for sharing. Ever since our brother Suntou shared anxieties regarding the inordinate number of NIGERIAN banks in The Gambia, I have gained a hightened sense of foreboding. This is because a bank aims to harness the product of a society for the latter's betterment. Generally the policy that facilitates the creation of a bank is what drives the health of the bank. If Mr. Chibundu were to review that policy in Gambia he would have found ample reason to pause before investing. The Gambia's disposition as re-export facility and her disfigured governance regime combined, yields the facility for money laundering and enabling of other crimes. Senegal, Mali, Ivory Coast, Austria, Taiwan, Singapore, and The US also enjoy superlative infrastructure and goodwill for comprehensive re-export. However in those nations, the proportion of local banks to foreign banks is well over 80%. In Gambia it is 53%. I want Chibundu to consider that capital by any means Does not determine a Healthy bank. All the ATM's and IT's of his bank only indicate the viral nature of his bank's mission but they do not accrue better customer service or more efficient banking.



I encourage the nationalization of at least 5 of the Nigerian banks in Gambia and that will begin by Gambian citizens divesting en-masse from these banks.

Haruna. Wowo.


-----Original Message-----
From: A Jallow <[log in to unmask]>
To: [log in to unmask]
Sent: Sun, Aug 23, 2009 4:42 am
Subject: Fw: Crisis Of Confidence Hits Nigerian=2
0Banks In The Gambia





This is plenty read but highlights lots of regulatory issues in the Gambia's banking system....

-Laye




Crisis Of Confidence Hits Nigerian Banks In The Gambia

* Bank PHB, GTBank, Reassure Customers 

By Andrew Iro Okungbowa

THE problems being faced by the banking sector in Nigeria has reverberated in The Gambia sending jitters through the banking system as customers of Nigerian banks operating in the country have expressed worried over the safety of their investments and holdings in the banks.

To stem the tiding of growing concern, management of the eight Nigerians operating in The Gambia have embarked on enlightenment and confidence building campaign. This was revealed to The Guardian in a tell interview by the Managing Director of Bank PHB, The Gambia, Mr. Chuks Melville Chibundu. 

While expressing confidence that the situation with Nigerian bank would not escalate further as to erode confidence in the sector as both the federal government and CBN have taken adequate measures to control the system, he revealed that they have been inundated by questions by their customers in The Gambia who are worried as to the fate of Nigerian banks in their country.

Although customers have not embarked on panicky withdrawals of their monies, Chibundun said that they have since embarked on educating their various customers on what is happening with the Nigerian bank back at home as most of them are not too aware of the full picture other than the information from the media.
0A"We are trying to build confidence here,'' he said, adding that it is unfortunate what is happening in Nigeria and that it is a global thing and that Nigeria is not an exception. He however assured that they fire would soon be put out as the appropriate measures are being taken by the Nigerian authority.

He said that Nigerian banks in The Gambia insulated from happening back home as they operate under the regulation of The Gambia authority, which strictly monitors and regulates the operations of the banks.

Chibundu further assured The Gambia community that their investments and monies in the banks are quite secured, as the banks are not affect by what is happening in Nigeria either now or in the future, adding that management of the Nigerian banks in The Gambia are aware of the implication of what is happening in Nigeria and would take every necessary steps to defend their operations in The Gambia.

Of the 15 banks operating in The Gambia, eight of them are Nigerian banks. They include Oceanic, Zenith, Bank PHB, Access Bank, GTB, FBN Group, Finbank, UBA and Skye Bank.

THE Gambia is located in the west coast of Africa and enjoys a clement weather for the greater part of the year. Economically, it is known for its agrarian produce. It is also famous for its tourist attractions as it enjoys a lot of patronage from tourists across the globe -particularly Europe and Britain - who visit the country during the winter season (November - April) to savour its tourist attractions. The country's natur
al attraction is accentuated by its culture, people, and ecosystem; and with a population of over 1.5 million people, the country presents itself as the beautiful bride for Nigerian companies. 

One sector of The Gambian economy, where Nigerians have a commanding presence is the banking sector. Eight out of the 15 banks in the country are Nigerian nationals. 

The roll call includes Oceanic Bank, Access Bank, Skye Bank, GTB, Bank PHB, Zenith Bank, FBN Group and UBA. Many more, including one, or two, of the five banks whose chief executives were sacked last week by the CBN, are still prospecting for licence. 

Of the eight Nigerian banks presently operating in The Gambia, Bank PHB is the youngest. Early in the month, its management celebrated the first year anniversary with a dinner held at Kairaba Beach Hotel, located in the Senegambia area of the country.

In a conversation with The Guardian, the bank's Managing Director, Mr. Chuks Chibundu, expressed delight at the performance of the bank, which he described as very impressive given its age.

Going down memory lane, he recounted that they bought over the former International Bank for Commerce (IBC), a former Gambian outfit. "We took over a bank called International Bank For Commerce (IBC). We bought over the bank 100 per cent and took over its management in January 2008.''

IBC, according to him, was about the fifth in terms of business size and performance. However, having inherited the bank, he said that they had to build from the scratch as th
e bank lacked most of the needed facilities that would enhance the culture of excellent service delivery. 

In the area of Information Technology (IT), the Managing Director revealed that the bank invested close to $2 million dollars. It also embarked on creating an enabling network platform in all the bank's branches, including the installation of ATMs, and Internet banking facilities.

"But one year down the line, we have a robust network, and set up; we have ATM, Internet banking and all that, including Western Union. All these have been accomplished under one year and six months. We inherited four branches and transformed them. Before the end of this year, we would have more. 

Right now, two are under construction, and in the next one month, we would probably award the contract for the third one," explained an elated Chibundu.

The key success factor, he said, was employing the same business strategy and model back in Nigeria. However, the only difference is "that we adapt to the opportunities that we found in this environment... There is, however, a lot of collaboration between us and the Group.''

The regulations guiding the business, according to Chibundu, are not too different from what obtains in Nigeria making it easy for them to adapt to the operations quickly. "The opportunity is there, the climate is good, the environment is friendly and the regulators are also willing to assist and make it easier for people to perform,'' said he. 

Chibundu described The Gambia as a politically stable co
untry with a performing economy, which records a relatively high Gross Domestic Product (GDP) annually. 

In 2007, the GDP growth was about seven percent. "For us as Bank PHB, we believe that taking a position in The Gambia is our first outpost in the regional expansion drive. 

"Although Gambia is a small economy with a population of over 1.5 million people business has improved but it could be better... Better in the sense that The Gambia economy also feeds other countries like Senegal, Mali, Guinea Bissau, and Guinea Conakry.''

"Export is what keeps Gambia going, because most of the products that feed these countries come through The Gambia. However, the lull in business in 2009 and the world economy reduced export business considerably and it also affected the business of the bank.''

Grateful that the country and its citizens have accepted the bank and supported its operations in the last one year, he revealed the overall mission of the bank as contributing to economic growth.

"We are looking at expanding the economy of the citizens of The Gambia rather than looking at what is obtainable as it is. Other potential investible areas include Agriculture and culture and tourism. Real estate is coming up. 

"The Nigerian banks that are coming in are also bringing in investors with them to look at these opportunities. We, on our own part, are also supporting their coming in to ensure that the economy of The Gambia grows beyond what it is.''

With an initial focus on the export business, which=2
0is the mainstay of the country's economy and the desire to nurture small business, Chibundu informed that the bank had set out to "weave so many products around this small businesses to ensure that we provide some sustainable capacity for these businesses because they are the ones that are actually the catalyst.

"The tourism sector is another area of concern for the bank as effort is being made to develop a special package for it. "Before October (hopefully in September) before the tourism season starts, we are going to introduce into The Gambia the use of Visa and Mastercards through our ATM so that the tourists can access funds directly through their ATM, which is what has been lacking in this industry to date.''

These products, he said, would boost the inflow of tourists to the country and rekindle the confidence of the visitors. "I am sure that it would also boost the inflow of tourists into the country because the complaint is that they can't carry cash with them. So if they come they can use their cards.

The good thing is that we are not only limiting it to visa card as most of the other banks do but we are also extending it to master card as well.''

The real estate sector is another area that the bank MD says they are focusing on too. With the PHB Mortgage, a subsidiary of the group, he says it is easier for them to fund any package that Nigerians may be interested in The Gambia.

"What we are trying to do is that for our customers who want to do real estat
e here, we would collaborate with our Nigeria mortgage arm to ensure that if you are coming from Nigeria, we would do the package here."

Chibundu also revealed the bank's plan to collaborate with TAF Holding Limited, the country's leading real estate firm in maximizing investment in the sector.





AS A Nigerian Bank In The Gambia, We Faced Crisis Of Confidence, By GTB 

ANDREW IRO OKUNGBOWA, who visited The Gambia recently, spoke with Managing Director of GTB, Gambia, Mr. Olalekan Sanusi, In this exclusive interview, Sanusi, whose bank was the first to establish operations in the country (over seven years ago), speaks on the business opportunities and challenges for the 'foraging' Nigerian banks. Excerpts:

What is special about banking business The Gambia?

We are the first Nigerian bank to enter The Gambia. 2002 was when we opened shops. When a number of Nigerian banks had not seen what you would call the value in The Gambia, we saw it quite early. Because, as soon as we started in Nigeria, we knew where we were going; we wanted to be a Pan-African bank - truly an African institution. 

We tried going to Ghana but we ran into difficulties for political reasons. But The Gambia was quite welcoming, and as soon as we came, we did the 

evaluation and we saw what the future held. 

How have you fared?

When we came in 2002, you could liken The Gambia banking industry and the market to what Nigeria banking industry (which you are familiar with) used to be in the 1960s and201970s, where bankers are like lords; and of course customers were at their mercy.

But when we came, we changed the psyche, emphasizing the fact that customers are actually the kings while the banks go out and woo the customers. We came with one novel idea, which was to make sure that our teller points don't have cages, which was very novel in this market then. But we faced a lot of resistance both from the regulators and other banks who queried why a bank would open with a teller who is not inside a cage.

The mentality is that when a teller is inside a cage, he feels that he is in prison. Again, the customer would have to scream and shout via the glass wall before the teller can hear or understand what the customer is saying. Also, we met a market where bankers were more or less in uniform and we thought that was totally strange. 

So, we changed that as well; but there was more resistance from the people that we met on ground, especially the very older ones who felt they would not give us a chance to survive. 

Again, the Nigerian factor came into play, because along the west coast, Nigerians are perceived with certain amount of suspicion; and banking is a game of confidence.

The early years were quite turbulent and the slogan was 'don't go and give your money to that Nigerian bank, because they would disappear with your money.' So, the first three years were quite rough and turbulent. In the first year, we made a loss and we were not ashamed of it, we de
clared it and wrote it off.

By the second year, we made a little profit but by the third year we were able to stabilise and, of course, people started seeing the fact that truly this is a professional institution, which has at the heart of its business what you can call customer service. 

Because we built everything around the customer, words started going round that these people appeared to be serious. One other thing that helped us was that when we came, we didn't rent our office. We took time to build it and people saw the investment in that regard that if somebody should come and put up this kind of edifice, they must be serious. In fact, when the building was completed, people were coming from far and near to appreciate it. 

By our third year we had stabilized. The kind of returns we are making now is so impressive that we have become a force to reckon with even in the GTB (Nigeria) books.

So, The Gambia has become so successful; even the Group in Lagos has to wait for Gambia figures to know what the number is.

In 2005, in Dalais (The Gambia dollars) terms, we made 14 million, which was about 500, 000 US dollars at the exchange rate then. By 2006, we made $100000, which means we doubled our profit; and by 2007, we did about 150 percent, because we moved to about $2.5 million in terms of Profit Before Tax.

So, The Gambia became very important for Lagos office to consolidate. Of course, the success in Gambia drove Sierra Leone business, because as we wer
e establishing in The Gambia we saw opportunity in Sierra Leone. So within few months in 2002, Sierra Leone opened; and, of course, Ghana followed. After Ghana, UK opened; then, Liberia.

Now we are prospecting for license in French speaking countries.

Market target 

To choose which market to play in would have to be a function of the environment. If you are running in a market of about 150 million people, you have a lot of options. But when you are running in a market of about 1.5 million people, your options are limited. 

When we started, our focus was on corporate and commercial banking - top-earn companies. We used to have Shell (now Galp) in this market but unfortunately, Shell was into oil marketing and not oil prospecting.

We also have Total and CFAO. So, there are companies operating in Nigeria, which are in this market, and we had to start from familiar ground. 

We concentrated on these corporate and commercial areas, but by 2006, we sat down again to review our strategy and we realized that if we continue to play in the elitist market, chances are that margins would be getting thinner and thinner. So, we had to develop what you can call a very strong retail culture. 

It was that retail culture that transformed us from a five-branch bank to a 13-branch bank today. We have two additional branches under construction. Obviously, if you want to run retail as a banker, you need a very strong branch network. And don't forget the fact that The Gambia as an economy is
 doing well in West Africa when compared to other countries in the region.

Although it is a small country, it is doing well, in terms of growth rate when you even compare it to countries like Sierra Leone or even Nigeria. If a country's GDP is growing at an average of 67 per cent yearly, I mean it presents good opportunities. 

Again, the economy is being modeled to follow what developed countries are doing by leaving it in the hands of market forces to determine prices. If we begin by looking at the foreign exchange market, for instance, which presents a very good opportunity once you are a good trader and know how to move from currency to currency. The market is totally deregulated, unlike the situation we are familiar with in Nigeria, where Central Bank comes in on weekly basis or every two weeks to sell currencies to banks and then banks sell to customers to make profit.

But in The Gambia you will sweat, your skill and competency will have to come into play, because the central bank will not come into the market to sell. You have to accumulate your sources of foreign currencies as a bank.

You have to know customers who can generate foreign currency for you. Then, you have to identify customers too who can buy foreign currencies. One of the customers who can generate foreign currencies is TAF (Mr. Mustapha Njie, the Managing Director of TAF Holdings Limited, a real estate firm, which is in partnership with the bank) and that is why I chase him everywhere.

When he sells20a property and the customer pays in dollars, the money comes to GTB, for instance. If you look at NGOs, international organizations, embassies to enable them meet with their capital and current expenditures they have to bring in foreign currencies. So, that is how we operate here. 

When I look at my colleagues in Nigeria, they are in heaven because on a weekly basis they go to Central Bank to bid for foreign currencies but here nobody is going to sell foreign currencies to me. So, if I am going to have foreign currency to sell to a customer, I must generate it through another customer.

This means I must put incentives in place for him to bring the foreign currency to me. There isn't what you can call official or central bank rate; so, I have to bargain with him and agree at mutually agreeable rate where he would see value and the bank has to put margin on it in order to be able to sell to another person.

It is tough but if you have the skill and competency you can make money.

What is the character of competition in the banking market?

Whether the market is there, or not, would be a function of judgment both from our own end, as a player, and from the end of other players who are coming in. From our own end, we see the opportunity. We saw the opportunity years ago and we still believe that the opportunity is there.

For those that are coming in, one factor that drove their entry is GTB success. What the Nigerian banks saw was that relative to the capi
tal investment, GTB was turning out a good profit. 

Whenever you look at our subsidiaries, GTB Gambia's returns are always the highest. I am sure that information on this would have gone out and that is why most of the banks have come in. 

But does the market have the capacity to absorb the growing number of players? 

My answer would be yes, because I know that I am established already. I will only wait for competitors to come and fight and because I am ready for the spoil; what would only be required of me is maybe to donate some money back to the market, which I have made to protect our market share.

If you look at the market today, GTB is controlling between 12 and 15 percent of the market - either in terms of total assets or deposit liabilities - and those are proportions that I want to keep. 

For as long as The Gambia GDP is growing, I will hold onto that proportion. In 2005, our share of the market was just eight per cent, but today, if you are talking of a share of 15 per cent, it means that we have really grown.

Some of these banks that are coming in from Nigeria in particular, we know them. We have competed with them in Nigeria and we know their strengths and weaknesses. The important thing for any operator is to learn what are your strength and weaknesses. We have seen what our strengths and weaknesses are in Nigeria.

We have seen the factors that placed us at a level in Nigeria and we have also seen the factors that worked agains
t us in Nigeria and some of those things we are correcting in this market. It will be very unusual if GTB is going to run the same way to have 16 branches in The Gambia but we are even going to 18.

It is also a proven fact in Africa that the bank that would be there is the bank that is physically there. If you start talking about Internet or GSM banking, African mentality is not yet attuned to that.

If you have a branch next to a man's house, he finds it convenient. He comes into your bank and does his business. But if you go and say, 'no, I have Internet banking and that is what the man would use' and then there is another bank branch next door to him, definitely you are wasting your time. So we believe that bricks and mortars would make the difference.

For a 16-branch bank in The Gambia of a population of 1.5 million, that is an average of one branch per hundred thousand people. We still want to do more. The strategy is that you shouldn't travel more than 15 minutes before you get to a branch of GTB and we are also rolling out ATMs. For people that are coming in, the stake is very high.

Financing Real Estate In The Gambia

What drives an investment is the safety of the environment. The Gambia is very safe, that alone should encourage any interested investor. If you are talking about financing, and you are a professional with a steady income, we have an office in Nigeria that can do assessment for us.

On the basis of cash flow in Nigeria, we
 can lend money to you here. We have done that for a number of people, and we are always willing to do that. We are a member of the same group. So, the only requirement is that our group member in either Sierra Leone or Ghana or Nigeria would do assessment for us telling us how good and reliable the customer has been to them and recommend him.

Then, on the basis of the account opening documentation in Nigeria, we open an account for you here and then we advance money. But they could also advance money in Nigeria and then we do the monitoring here. Either way, getting finances should not be a problem for those that are really qualified.

We will then take whatever you are investing in here, maybe a property because you have put in some equity contribution as security. So it is a straightforward transaction. We have done it in the past and will do it now. 

Even if you are not a customer of GTB Plc but you are a customer of GTB mortgage, it is the same process.

Investment by banks in other sectors

The banking law in The Gambia - although similar to that in Nigeria - is relatively restrictive, as banks are not allowed to invest in other sectors of the economy directly. The only thing that we can do is probably finance people who want to invest in property. We have a number of them in our portfolio.

When people say property market has crashed, I laugh, because I know a number of people who are making a lot of money from property either from sales or ren
tals. A number of factors drive the property market in The Gambia, but some of them are not local to The Gambians.

The Gambia is a tourist destination and is known for that in European countries. A number of Europeans have chosen in some cases to even abandon Europe, buy a property in The Gambia and settle here. 

These are the people that drive the property market and, because every year, the country keeps on pumping money to promote tourism, especially to this segment of the market that core demand continues to exist and that is what is driving demand for property in The Gambia.

A number of his (TAF Holding Limited) tenants in Brufut Garden Estate are foreigners and retirees from the UK, Belgium, Germany and other countries in Europe that have visited The Gambia and found out that this is a safe place to live in and decided to settle down here.

Mortgage business in Nigeria started about five, or six, years ago when commercial banks started having subsidiaries as mortgage banks. It is a new idea and a new concept because they feel that they had money after the re-capitalization and felt that something should happen or be done.

If we are going to do that in The Gambia, for instance, we need a GTB subsidiary that will be involved in such a business; but looking at what I have seen as a professional and as a person, property business in The Gambia is good.

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