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Heritage Bank and its Quintessential Moves in Nigeria’s Banking Landscape in 2014

The singular most attention-grabbing event in the nation’s banking sector in 2014 came in the last quarter of the year. The announcement by the Assets Management Corporation of Nigeria (AMCON) of the fledgling Heritage Bank as the winner of the bid for the acquisition of Enterprise Bank jolted the entire banking industry, as it re-drew the picture and shape of the sector from the hitherto finely delineated stereotypical lines of the recent past.
 
It would have been considered an impossible task for a bank that entered the market less than two years to beat other well established players like Fidelity, Skye, Diamond and others to land the Enterprise Bank that was up for acquisition.  But that was how Heritage Bank impressively capped its innovation-laden foray in 2014. 
 
The Heritage Banking Company Investment Services Limited (HISL), a special purpose vehicle sponsored by Heritage Bank to bid for Enterprise Bank, not only came tops in the bid process but, against all industry predictions, paid the total N65 billion purchase price within the time frame specified by AMCON. 
 
The Enterprise Bank acquisition, according to analysts and watchers of the nation’s banking sector, served a clear signal that Heritage Bank, which entered the market in 2013 with a regional bank status, was focused on transforming into a strong national bank. The acquisition of Enterprise Bank which currently boasts of over 160 branches, over 177 ATMs, 57 Cash Centres and 2000 POS Terminals spread across major markets and commercial centres in the country  will increase Heritage Bank’s points of presence from the current 15 Experience Centers to nearly 200 branches spread all over the country.  This automatically transforms the bank from a tier-2 player to a strong tier-1 player. 
 
However, the acquisition of Enterprise Bank, earth-shaking and record-breaking as it was, happened to be just one of the many strategic, industry-redefining moves Heritage Bank has made, since coming on stream, to justify its fast growing image as an industry game-changer.
 
RIDING ON CLEARLY DEFINED BLUEPRINT…
When Heritage Banking Company Limited rose from the ashes of the defunct Societe Generale Bank of Nigeria (SGBN) in early 2013, the thinking of some industry watchers then was that of a bank whose soul lies in uncertainty. They were not sure if the new banking experiment would turn-out a success story or not. But the new management was optimistic and determined to ignite heritage of banking success. Immediately they got a regional banking license from the Central Bank of Nigeria (CBN) in 2013 to start Heritage Bank, they hit the ground running with a unique philosophy to Create, Preserve and Transfer Wealth to its teeming Customers. 
 
Guided by passion and a brand architecture that exudes quality service, performance, respect, integrity, innovation, tenacity and excellence as core values, the promoters of the new quintessential bank were driven by African world view of wealth creation. This reflects in the naming protocol of the bank’s strategic divisions; Ivory, Manila, Cowry and Coral Banking. The unique naming of its branches as Experience Centres to the minutest simplification of banking Service offering also gave a strong hint that the bank’s brand differentiation was well thought-out.
 
The Bank, which found itself in a fiercely competitive environment, was quick to deploy its arsenal as a catalyst for growth in the Nigerian financial sector and a dedicated ambassador for showcasing the global quality that Nigeria possesses. The Heritage Bank blueprint clearly showed that it was birthed to occupy an unusual niche in the area of Small and Medium Enterprises (SME) re-vitalization, high-value project financing, catering uniquely for the unbanked and many more modern banking offerings.
 
Mr. Ifie Sekibo, the bank’s Managing Director, at inception did state the way the Bank wanted to go. According to him, “We re-capitalized to the tune of N12 billion, took up all liabilities and assets of the defunct SGBN and found some form of accommodation for depositors whose money has been trapped for over 10 years. Our vision is simple and clear; today, we might look quite new in the market, but our idea of what this bank should be is clear from day one. We want to be a bank that people will believe and we want to lead in the knowledge that generation banking is the way to go”. 
 
Heritage Bank’s thirst for unique customer satisfaction, not only financially but in other ways, started shortly after its operations began. This became evident as it commenced a zero COT offering to its numerous clients from April 15, 2013. The Bank’s offering of zero COT implies there shall be no hidden charges in transactions. Consequently, this huge selling point would boost the bank’s goodwill, customer trust and consequently, deposit base in 2014 as it warmed up to serve its customers more goodies.
As part of the financial inclusion strategy, Heritage Bank set a standard when it launched its pilot ‘Corner Shop’ to cater to traders and artisans of the Gbagada plank market, located at Gbagada Estate of Lagos State as a foretaste of its Agent Banking Scheme. The shop is aimed at giving traders the opportunity to enjoy financial services without the risk and stress of walking kilometers in order to visit a bank branch.
 
To further prove its trend-setting profile, Heritage Bank, for the first time in the history of banking in Nigeria, also introduced Nigeria's pioneer portable POS solution christened "PortaPOS" to ride on the mPOS revolution, which is fast gaining acceptance worldwide. That was yet another first the Bank recorded in 2014.
 
According to the Bank, “Today, small businesses and large retailers are turning to mobile point of sale (mPOS) to increase sales and broaden their customer base. Existing large retailers are also adopting mobile POS solutions and integrating them into their current point of sales environment to enhance payment methods. The Nigerian retail and corporate market is undergoing a massive transformation in a battle for digital consumers who shop through a variety of channels, and as such expect a more integrated payment experience that is quick, seamless, convenient, and most importantly secure”.
 
The Heritage PortaPOS which is free to all Heritage customers has several distinct features including ability to accept all EMV Chip & PIN cards, MasterCard, Verve, and Visa cards. It is portable and light (@ 120g only, as light as a regular mobile handset); it has long-lasting and rechargeable Li-Ion battery and syncs to phone and printer via Bluetooth technology.
 
STRONG, DIVERSIFIED ECONOMIC INTERVENTION PORTFOLIO…
Heritage Bank’s sponsorship commitment in the areas of Small and Medium Enterprise (SME) development, sports, entertainment, charity and advocacy also stands out.
 
Through its unique SME Support Platform, the Bank, in 2014, raised the bar in the efforts to deepen the SME Culture in the country. Its Micro Small and Medium Enterprises (MSME) Clinic radically emerged as a unique platform set up to offer a holistic bailout strategy for SMEs in the country through an amalgam of services such as business diagnostics, advisory services, financial literacy and entrepreneurship development, customized product development for each customer and market knowledge development. This scheme is backed up by the innovative Heritage Bank Micro Small and Medium Enterprises (MSME) Investment Protection Fund; a non-collateralized funding option with embedded insurance for the default risk inherent in the SME scheme to assist the growth and rejuvenation of the sector. This remains a strong differentiating indicator of the Heritage Bank approach to SME funding in the country.
 
For example, under this scheme, Heritage Bank, through a groundbreaking partnership with Dbanj, the Koko Master, offered support for KOKO AGROPRENEUR, Dbanj’s initiative under the banner of the national agricultural renewal project being championed by the Ministry of Agriculture.
 
Remarkably, Heritage Bank’s support for KOKO AGROPRENEUR spans the entire scope of idea fine-tuning, advisory, set-up, financials and customized product development in order to enhance the initiative’s MSME capacities and strengthen its business management skills, in addition to offering support programmes aimed at developing its survival and growth capabilities.
According to Bayo Ogunnusi, Group Head, SME Banking at Heritage Bank, “We at Heritage Bank are pleased to partner with Dbanj in the ‘Nagropreneur’ (Nigeria Agricultural Entrepreneur) initiative. As a bank whose ideology is to create, preserve and transfer wealth across generations, this initiative falls right within our purview”.
 
Also worthy of note is the fact that since its foray into the Nigerian financial sector, Heritage Bank has continued to play a pivotal and leading role in the equity and project financing market. In 2014, the Bank arranged in excess of $2 billion of debt facilities either as lead or sole financier or financial adviser. The field of engagement has equally been diversified; covering economic sectors such as MSME, Entertainment & Arts, Education, Oil & Gas, Aviation & Haulage and Public Sector.
 
The successful finance of Forte Oil Plc’s acquisition of 100 brand new Mercedes Benz product delivery trucks for haulage, logistics and product transportation across the Country as well as the Project Finance Facility to PIPP LVI GENCO to set up a 6.5MegaWatts Captive Power Generating Plant and a 25km Distribution Network to power Public Utilities in Lekki, V/I and Ikoyi, all in 2014, represent giant strides by the relatively young Heritage Bank in the area of business empowerment. Among other notable interventions, Heritage Bank in 2014 financed a host of projects in Port Harcourt and Abuja in deals worth several billions of Naira. 
 
In a testimonial, Group Chief Executive Officer, Forte Oil Plc, Akin Akinfemiwa lauded Heritage Bank on its project financing portfolio. According to him, “We appreciate the strategic role of Heritage Bank in financing the acquisition of our latest 100 world-class product delivery trucks which, to us, is a very strategic investment that will substantially increase our capacity to grow our revenue and profitability and ultimately maximize value for our stakeholders”.
 
STRONG CSR BACKBONE FOR ENTERTAINMENT AND SPORTS…
 In a clime where corporate organizations are been routinely admonished to deploy part of their profits to social value investments, Heritage Bank in its less than two years of operations has performed considerably well in the area of Corporate Social Responsibilities (CSR).
 
For instance, as one of the key supporters of the Lagos State Security Trust Fund (LSSTF), Heritage Bank, early in 2014, donated security logistics and motor vehicles worth millions of naira to aid efforts of the State government in crime fighting.
Remarkably, Heritage Bank midwived over USD100 Million in funding for a variety of transactions in the film and entertainment industry from 2013 to 2014. These include Bloomberg TV Africa (the Pan African TV by Bloomberg LLP), Free-to-Air TV Broadcast Rights in Nigeria for the 2014 FIFA World Cup, HIP TV (a Pan African TV Music Channel broadcast on satellite TV which was funded from scratch) and a variety of other investments spanning content, platforms and production.
 
The huge interest of the Bank in the entertainment business was brought to fore on January 1st, 2015 with the successful sponsorship of the well-attended top-class comedy concert organized by Nigeria’s Comedy King, Ali-Baba. The Concert was the first exquisitely packaged comedy concert that will parade 24 Comedians in one night to display their prowess. 
 
The Heritage sponsored Comedy event wasn’t all just about fun as some notable Nigerian icons were recognized under THE FIRST AWARDS christened- The Zakilo. Some of the first sets of beneficiaries were the Doyen of Accounting profession in Nigeria, Chief Akintola Williams; First female Judge of the Supreme Court of Nigeria, Mrs. Aloma Mariam Muhktar and Founder of Globacom Telecommunication, Chief Mike Adenuga among others.  
 
Like the entertainment industry, like Sports. 
Heritage Bank’s sponsorship interest in the entertainment sector has been replicated in sports development. This was echoed during the recently sponsored Port Harcourt Amateur Golf Tournament now known as Heritage Cup Golf Tournament.
 
Justifying the bank’s commitment to the Golf Tournament, the Managing Director of Heritage Bank, Mr. Ifie Sekibo noted “a player of golf  must be tenacious and have a drive, these are part of Heritage Bank’s DNA. We are tenacious people. So, being an historical game and Heritage is a bank that wants to create and transfer wealth from generation to generation, golf seems to be one sport we should identify with. That is why we chose to identify with Port Harcourt Golf Club.”  The bank, he said,  is more concerned about the equity values in the sponsorship of the game beyond the profitability aspect of it.
 
WHAT 2015 PORTENDS…
As 2015 unfolds, Heritage Bank looks set to continue the trend of blazing positive trails in the banking sector. With the on-going process of integration of both Heritage and Enterprise banks expected to produce a formidable entity, what the industry stands to gain can be predicted from the following words of Ifie Sekibo, the Heritage Bank CEO, at a media briefing in Lagos in the closing days of 2014: “Having secured all relevant regulatory approvals, we are pleased to announce the beginning of a seamless integration of both entities – Heritage Bank and Enterprise Bank – into a bigger and stronger financial institution that is positioned to play a big role in the much envisaged transformation of the nation’s financial sector in line with the country’s stature as Africa’s largest economy”.
 
As an integrity-driven business, Mr. Sekibo promises that the bank remains firmly committed to its continuous quest for quintessential banking service delivery by harnessing the best of the two worlds combined in terms of its innovative products, bespoke technology and expanded branch network manned by a team of tenacious people.