‘Demutualisation of NSE will create swift changes in economy’
Chief Executive Officer of Rand Merchant Bank Nigeria Limited (RMBN), Michael Larbie, in this interview with BENJAMIN ALADE, speaks about the significance of NSE’s demutualisation and its prospects among leading stock markets.
Given regulatory requirements and the macro environment, what new investment strategies have you put in place to meet the expectations of clients and stakeholders, especially in the COVID-19 environment?
Despite the current economic headwinds, we believe the long-term thinking by the government on growing the economy through a renewed focus on the real sector economy and the coordinated and sustained interventions by both the monetary and fiscal authorities will continue to boost the economy and present significant long-term opportunities for RMBN and FirstRand. We are confident that our client acquisition strategy and innovative transactional banking platform will enable us to further entrench ourselves and increase our share of our wallet.
We remain optimistic about the economy and we expect to see an uptick in business activities as the impact of the COVID-19 pandemic decreases on the back of the ongoing efforts to combat the virus and the various stimulus interventions being deployed by the government.
Given the significant part RMBN undertook with the NSE’s demutualisation process and its recent completion, what does it signify for Nigeria?
It is a big milestone for the NSE as it joins other exchanges worldwide that have been demutualised. But more importantly, it allows the NSE to further pursue its strategic thrust of becoming one of the globally recognised platforms. Demutualisation allows the NSE to modernise and entrench its corporate governance processes that should help with decision making and assist in making the NSE platform more attractive.
Typically, demutualised exchanges often tend to be more transparent and efficient; they attract more stocks to trade on their platform. The demutualisation is the first step in a journey of the exchange becoming publicly traded and have a more public-oriented board that allows them to be nimble and react quickly to changes in the economy.
Could you give us an overview of what corporate/investment banking at Rand Merchant Bank Nigeria is, and what has been your experience in the past eight years?
Rand Merchant Bank Nigeria is a subsidiary of the FirstRand Group, the largest listed financial services group (by market capitalisation) in Africa. As part of the Corporate & Investment Banking division of the Group, RMB leverages a market-leading origination franchise to deliver an integrated value proposition to corporate and institutional clients across Africa. Our deal footprint spans several African jurisdictions and ranges from the funding of key infrastructure, oil & gas, telecoms & technology projects, manufacturing, healthcare & pharmaceuticals and renewable energy projects. We have also led and executed several mergers and acquisitions, debt and equity issuances. We provide trade finance and transactional service offering to our corporate clients and a leading global markets business. RMB has representative offices and subsidiaries in 10 other African countries, the UK, India and China.
Since we commenced operations in Nigeria in 2013, we have consistently demonstrated our commitment to the market through the transactions we have initiated and participated in and by our unwavering through-the-cycle support for our clients. We have established a reputation as an innovative and client-centric bank.
In recognition of these achievements, last year, we were named the Best Merchant Bank in Nigeria for the third consecutive year (2018, 2019, 2020) and Debt Arranger of the Year by BusinessDay for the second consecutive year (2019, 2020). We also received a Great Place to Work certification in 2019. In terms of market rankings, we moved up from 6th position to 4th position in FX trading, 7th position to 6th position in FX derivatives trading and we were among the Top 5 Capital Importation Banks in 2019. The Bank’s current ratings of ‘Aa-‘ and ‘A+’ from Agusto and GCR were maintained during the June 2020 review. The ratings were accorded in consideration of the bank’s improved competitive profile in terms of profitability and market share as well as its strong asset quality with nil impaired loans from inception to date.
Over the last year, we have concluded landmark deals for Celplas, Emzor, Bank of Industry, Africa Finance Corporation, Dangote, BUA, Seplat, Indorama, Enyo, NSE Demutualisation and several of our other clients.
In which sectors of the economy do you have your major investments?
Our client base cuts across all sectors of the Nigerian economy from FMCG, Manufacturing, Technology, Media and Telecoms, Oil & Gas, Agro-Processing, Healthcare & Pharmaceuticals, Services and Infrastructure. RMBN’s client base also reflects the government’s drive to turbocharge the real sector, diversify the Nigerian economy and reduce dependence on crude oil. Although our primary focus remains the non-oil sector, we will look at bankable oil and gas transactions as the opportunities arise. Our award-winning global markets team provides innovative solutions to our portfolio of Institutional Clients – Banks, Insurance, PFAs, Private Equity and Asset Managers.
What is your major strength in the industry? How have you handled competition and what are you doing differently?
We pride ourselves on our problem-solving approach to serving our clients. Our focus on meeting their needs requires us to be creative and resilient as we challenge the status-quo. We embrace the power of our collective and work as a team to entrench ourselves with our clients and stakeholders. Over the past seven years, we have created a core client base of local corporates, multinationals and financial sponsors. Using a targeted approach, we have supported our clients through varying economic cycles, and they know they can rely on us to be in their corner.
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