The Managing Director and Chief Executive Officer of Fidelity Bank Plc, Nnamdi Okonkwo, has ruled out any inorganic growth plan for the expansion of the Nigerian lender, if the company is to stick to its short-term plan.
Okonkwo said Fidelity Bank Plc has a five-year plan that only consists of organic growth. The disclosure means the company will, most likely, not be involved in any acquisition or merger in the next five years, as consolidation is weighed as a method for inorganic growth in the banking world.
Mr Okonkwo’s statement comes at a time industry players, Access Bank Plc and the now defunct Diamond Bank Plc, just consolidated to form the largest financial institution in Nigeria and Africa by customers.
Okonkwo also announced that Fidelity Bank Plc won’t be expanding beyond Nigeria until 2022. He, however, said there’s room to adjust the five-year plan to accommodate emerging opportunities.
“A company’s strategic initiative for growth may be driven by either organic growth or inorganic growth. Our five-year plan was crafted to be based on organic growth, based on the projections we made.
“We also purposefully decided that we will not expand outside Nigeria until after 2022. So, our plans are based on organic growth.
“We also left a window that allows us to take advantage of emergent opportunities though. When these happen, we will sit down and look at them and go back to our board to see if we need to alter anything to take advantage of such opportunities or to continue on the organic growth path.”
Okonkwo weigh in on payment service banks emergence: The payment service banks pose no threats to traditional banks in Okonkwo’s view. He said the bank has no problem with the telecommunications companies coming into the financial markets.
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However, PSB should be subjected to regulatory conditions, just as the traditional banks ar, Okonkwo added. He said this is important because it concerns the finances of Nigerians.
“You know it has been a prolonged push by the telecommunications companies to come into the banking space. We don’t have a problem with that.
“Let them be subjected to the same regulatory conditions that we have because you are talking about depositors’ money.
“So, once all of us are subject to regulatory control, we will all do banking together. I think the sky is big enough and as banks, we are not sleeping, that is why you see some of us deepening our digital platforms.”
Telecoms companies are entering the financial market: Recall that the Central Bank of Nigeria and the Nigerian Communications Commission (NCC) recently expanded the mobile money service to include telecommunication companies. This decision was made to achieve CBN‘s financial inclusion goal.
Last year, the apex bank requested telecoms companies to make a minimum capital deposit of N5 billion to operate mobile money services. In a report published by NCC, CBN granted the telcos a provisional approval to apply for a Payment Service Bank licence through subsidiary companies.
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