The chief executive officer, Globus bank limited, Mr. Elias Igbinakenzua has said the financial institution mobile app is the best rate in the country’s banking sector. The lender last week clocked three months and team from Nigerian NewsDirect, KAYODE TOKEDE and SUSAN ONI interviewed the CEO on what the bank has to offer customers differently.
Globus Bank limited last week clocks three months operating as a commercial bank. What has been the success stories recorded so far?
Well, Globus bank is a commercial bank and came into operating November 6, 2019 after Central Bank of Nigeria’s (CBN) official licensing in July.
We have operated for 90 days and I will say it has been a wonderful experience. We’ve opened our doors in the face of very high skepticism- a new bank at this time.
Today, we have what you might say is the highest rated mobile app in the market. You can actually go online with our app, start and finish account opening process without stepping into our banking hall- It is fully digital. We say from day one that we are Phydigital – 20 per cent brick & mortar and 80 per cent digital.
Most of the things we do here are purely digitalized. Digital environment brings efficiency into businesses and we say we want to ensure that customers get that experience that has been lacking in the banking sector. Ours is to sale the experience and we are actually encouraged by the level of response in the last 90days.
What has been Globus bank selling point in the last 90 days?
Today, Globus bank is the best rated mobile app in the market. In terms of confidence of using mobile app, we are the preferred bank today in Nigeria. You can open account within two minutes and you’re on the run with the account- that is something different in the market. Today, a customer can upload all details online without asking where is the bank to operate?.
We open our doors 90 days ago and today, we are in two states fully operational. We are Port Harcourt in Rivers State and Awka Ibom.
As I speak with you, we are working on Ikeja office and another branch in Apapa and Lekki. We will have in no long distance future 20 branches fully operational in Lagos.
We are probably expecting the CBN to announce new capital base in the banking sector. How is Globus bank going to adapt to increased capital base going forward?
Banking as you probably know, it’s a capital gain. We are not waiting on CBN to announce increased capital base. When we came out in November as a commercial bank, we went to CBN with N10 billion for license. We didn’t intend to play a regional game. As at today, we have N25 billion plus capital base.
So, we have moved from N10 to N25 today which makes us national bank. We are not stopping there since we know that banking is a capital game. It is all about the risk that you take that determines your capital base.
So, if you are taking a big risk, then you must have large capital. And if you’re taking a small risk, you consider having a small capital base
What are ways Globus Bank supported the FG and CBN real sector amidst decline in rate?
What CBN has been doing is to reduce interest rates and make the funds more affordable to real sector.
Today, you will see banks lending at much lower rates. We are lending between 12 to 16 per cent maximum to the real sector. This time last year, we were probably lending between 23 to 24 per cent. So you’ve got to look at retail lending- those that need short time loan at a very low interest rate.
We are supporting the federal government and CBN policies in driving the real sector and creating jobs. For the creative industry, the entire banking sector is doing a great thing in that sector. If we find an individual and corporate that needs support, we are ready to support. We are open to any sector and not only physical cash but provide advisory services.
How is Globus Bank coping with existing banks in the country?
For the big banks, I call them the big brothers. They have been there and continue to operate.
I’ve been here for the last 27 years in the industry and some of our shareholders have been around too for a long period of time.
We know what the issues are and we know how to collaborate with our big brothers. Am not here to say the big banks should go and rest. We are working together and there is enough room for everybody. It is when you get greedy that things go soar. Craft you niche and mindful of the risk in the market. There is enough room for everybody to grow.
Operating 80 per cent digital, don’t you think Globus Bank is operating in the Fintech space?
We are not a Fintech but commercial bank. That is why I mentioned Phydigital ; we are both physical and digital. Our customers will see us with branches but not like big banks operating across in the country with big branches. We are not going to have many bank branches but few ones in a strategic location across the country and the market will feel its significant impact.
Today, banking is on the palm. Having a physical branch is a sign that we exist. If you travel to the UK, banking is purely digital but in Africa, we are not quite there yet. Hence, we are combined the both.
The MPC voted to increase CRR to 27.5 per cent. What has been the impact on the banking sector?
The increase in CRR to 27.5 per cent from 22.5 per cent is a pinpoint for banking sector, most especially for us a very young bank. What the increase actually means is that, if I take from a customer N100,000 as a deposit, I can only lend out that amount less N27,500 and I must lend that money out to recover my overheads and make money out of it. That actually makes the burden of high cost go back to the borrowers. If I wanted to lend that money collected from customers, N27,500 has been quarantined and I have to lend the balance at the rate that will cover my cost. CBN’s MPC members know the reason behind the decision but that decision is pin point to the banking sector.