Finding banking innovation in the unlikeliest of places

After spending six years as a regional bank, Wema Bank has stepped up to compete at the national level, and not even the current economic crisis can stop it from winning, it seems.

In 1945, as the Second World War grinded to a bitter halt and much of the world struggled with momentous human and economic losses, Nigeria’s first indigenous financial institution, Wema Bank, was formed. The Bank became a symbol of Nigerian Renaissance in a period of global distraught, which would culminate in economic and political independence of the nation 15 years later. Seventy-one years later, Wema Bank is repeating that feat. The financial institution is rising again at a time when everything – the Nigerian economy and the global businesses environment – seem to be going the other way.  It began last year when, after spending seven years as a regional bank, the Bank stepped up to compete at the national level, and it has continued this year as the bank steadily grows in balance sheet size and profitability despite the current economic challenges facing the country.

Wema Bank is Nigeria’s oldest indigenous financial institution. It is also widely reputed as the most resilient Nigerian bank, a reputation that was put to test in the early and mid-2000s as the Bank suffered its worst ever internal crisis. In 2009, Wema began its bounce back. It started with the reconstitution of the Bank’s board, which saw seasoned banker Mr. Segun Oloketuyi take over as the Group Managing Director, and continued in 2011 with the strategic repositioning of the Bank to operate with a regional license covering South-South Nigeria, South-West Nigeria, Lagos and Abuja. Last year the bank consolidated its rebound when it was granted a national license by the Central Bank of Nigeria.

“Six years ago, we took a decision to refocus the Bank’s operations on its areas of strength and build a sustainable institution,” said Mr. Oloketuyi following the Wema bank’s receipt of its national license in 2015. “We took advantage of the new licensing regime and applied for a Regional authorization with a pledge to expand in the near future, once the turnaround project was completed. The Bank’s transformation was implemented in three phases; first to stabilize the Bank, second to prepare the building blocks for growth and third to go for growth. We are now within the third phase of the transformation project,” Mr. Oloketuyi enthused. Thus far, project growth seems to be going great.

In its 2016 half year financials, Wema bank reported an 11 percent rise in profit and a 15 percent rise in turnover. It is the best performance by any Nigerian bank this year (among those who have declared their half year results). The bank delivered an impressive Interest income of N20.2 billion, a 15.2% increase from N17.5 billion in H1 2015, while its fee and commission income rose by 42.3%, from N2.2 billion in H1 2015 to N3.1 billion in H1 2016. The bank also enjoyed a 13.7 percent growth in Total Assets, from N344.64 billion in H1 2015 to N391.76 7690 in H1 2016. Operating expenses only grew by 2.7%, much lower than Year-To-Date inflation rate of 13.26%; a testament to the bank’s disciplined and innovative approach towards keeping cost of doing business low.

“The 2016 financial year has been characterized by deceleration on a number of economic indicators coupled with increasing energy costs, intensified by rising inflation, all within a tough operating environment,” said Mr Oluketuyi following the release of Wema Bank’s half year financials. “In spite of these challenges, Wema Bank has been able to deliver a modest improvement in the first half of the year. We commence the second half of the year with a sense of cautious optimism; well aware that the economic fundamentals point to an economy heading for further slowdown, yet hopeful that additional fiscal initiatives will be implemented to stimulate growth.”

Wema Bank’s growth has not just been in terms of balance sheet size and return on equity. Its branding – a fine blend of aged experience and youthful vigour – is also gaining strength. The bank revitalized its hallmark colour purple, explaining the shade to reflect an organization that is unique, cool, modern and welcoming. And it also has a new logo, a “W” made of intersecting lines, which depicts the continuous connection between the bank and all of its Stakeholders, from the Staff to the Management and Board of Directors, and from the Customers to its Shareholders and all other groups in its business community. As is often the case, these seemingly little things do matter a great deal, as proven by the remarkable success of the bank’s *945# campaign.

From the 14th of July to the 6th of August, Wema Bank ran a 945 game show to promote its USSD banking product, *945#. Unlike most game shows in the country, it was exclusively streamed live on Facebook. It involved any Nigerian who opened a bank account with *945# or existing customers who used the USSD service to purchase airtime, transfer money or to access several other basic banking services. These customers stood a chance to win 90,000, 40,000 or 50,000 if their mobile number was randomly picked up during the 945 game show. Over six dozen customers won the lottery.

It’s a very tough job for any bank to keep up with the digital revolution rapidly transforming the financial service sector, but Wema Bank is gunning for more; it wants to lead the curve. The bank’s growing E-banking platform includes a revamped, feature-loaded and constantly updated mobile banking application, innovative SMS and USSD Banking products which do not require token, mobile data or internet connection to complete transactions and an internet banking platform which gives users real-time access to their account from any internet-enabled computer or device. Wema Bank’s Debit, Credit and Prepaid Cards are also secured with ground-breaking Card Control features to customers, which allows them enable or disable their card anytime, anywhere, via the WemaMobile Banking Suite app or SMS. The latest in Wema Bank’s innovative offerings is BuxMe, an app (currently running only on Android) that allows users to send money to email addresses and phone numbers.

“Strengthening our digital offering and optimizing our value added services across all customer touch points is central to how we will win the 21st century battle in the financial services sector,” enthused Onome Odili, Wema Bank’s head of Brand and Marketing Communications.

Wema’s Winning Model is in many ways built on its experiences from the challenges of the last decade. It is encapsulated in the Bank’s Project LEAP, a growth strategy adopted by the bank which narrows its focus to opportunities that provide great potential for business growth and increased profitability. This month, Chief Financial Officer Tunde Mabawonku said the Bank plans to issue 20 billion naira ($63 million) in bonds. “We expect to open in a couple of weeks. We are awaiting final regulatory approvals and we expect to conclude the process this quarter,” Mr. Mabawonku told Reuters news agency. For industry watchers, the bonds – issued to raise capital for further expansion – is an indication that Wema’s winning model is working. And for bookmakers and history watchers, it is a sign that a serial odds breaker is at it again.