By Yinka Kolawole
Generally referred to as the Grandmaster for his pioneering role in the financial sector, Otunba Subomi Balogun, Chairman of the First City Group, is reputed with the establishment of the first indigenous stock broking firm, issuing house and investment bank in Nigeria. In this media chat, he reflected on how he moved from law into banking, and how he arrived at his succession plan. Excerpts.
Could you please give us an insight into your background?
My background is well documented in my auto-biography, titled: The Cross, The Triumph and The Crown, which was published about 12 years ago. I come from a fairly well-known background in Ijebu-Ode, and interestingly, I’m from a polygamous home.
Both of my parents were educated, my father was one of the pioneer native authority workers in the colonial days, during the reign of late Oba Tunwase who was the Awujale of Ijebu at the onset of colonial rule and I happen to be a descendant of that lineage. My father happened to come from one of the Balogun houses. My mother was the only educated wife of my father, so I had an edge. My mother was rather very helpful in giving me a head-start.
I had a fairly brilliant educational career. Went to Igbobi College and I was one of the first Nigerians that did GCE advanced level in Nigeria, and I passed with Grade 1. My contemporaries were people like Prof. Ayo Banjo, and others. I then decided to go and study law.
Because my father was a court registrar at that time and my father, at over 50 at the time, was being bossed by a young boy who was trained as a lawyer.
So I said I’m going to study law too, so that I can also become a boss. But by the time I was finishing law, the government of the then Western Region gave me a scholarship to be trained as a Parliamentary Counsel, and I was the first Nigerian to be so trained in that field, by the government of Chief Obafemi Awolowo. I think the Eastern Region followed by sending one fellow.
When I came back, I worked with the Western Regional Government, and in 1962 I came to Lagos and became an Assistant Parliamentary Counselor of the Federation. Then it was while I was doing this that the Nigerian Industrial Development Bank (NIDB) was being set up by the World Bank and I applied as a Secretary and became the Company Secretary. That was what opened the vista.
I just found myself becoming prominent as Company Secretary and Legal Adviser of the bank, and at a point, I suggested they should set up a merchant bank – an investment bank, and I wrote all the papers. But when they wanted to select the headship of the bank, I was overlooked and felt cheated. I appealed but it seemed that their minds were already made up, so I resigned.
And I wanted to prove to the world that given the mettle, I could attain a commanding height in the management of a financial institution, by the grace of God. So come 1973-75, I made up my mind that I was going to a set a stock broking firm, and later set up a bank. Some people thought I was crazy, some thought I was over-ambitious. But they forgot God. And it happened. That marked the beginning of City Security Limited (CSL).
Why Grandmaster, and your thoughts on CBN reforms and classification of banks and is FCMB interested in taking over any of the troubled banks?
Some people gave me the title – Grandmaster, may be in recognition of my contributions in the financial sector. All glory to God.
What is happening in the industry is a symptom of some malaise in the system. Rather than say this or that, let us give the CBN and SEC a chance to reform them. The hiccups were as a result of what was going on in the system. For me, as a pioneer, a grandmaster, I feel sad that things are not going on well. Because, apart from South Africa, we were the best in the continent. We need to cooperate with the regulatory authorities to see that whatever has gone wrong be put right.
As for FCMB being interested in anything, I’m not in position to answer that question, I’m retired. I’m only praying that the FCMB of my dreams be improved upon by the managing director there.
There was always the outcry in this country, ‘we don’t want family bank. We don’t want family institutions.’ But all the major banks in the world, major corporations started as family banks and family businesses. The only thing is that things should be done properly.
Yes, FCMB was started by one young man named Subomi Balogun. But after sometime, we invited everybody to be part of it and we became quoted. So it is no longer a family bank. The average Nigerian doesn’t see anything good in something that benefits one or two people. But somebody has to do the thinking. FCMB was not started by a family; it was started by a young man, who just happened to belong to a family.
But then, this is the story of all big companies all over the world. If you talk of the Morgans, Guinness, Cadbury, just like Michael Ibru, etc, they all started as family businesses. And because of that, some of us have suffered. I was assailed over 10 years ago, when I was accused that one of the companies in our group was involved in something that I knew nothing about.
When it comes to the reforms that are being undertaken by the CBN and SEC, I can tell you that I’m in full support. You shouldn’t have a situation where people just do what they like. There must be regulation, there must be corporate governance, and there must be an accepted way of doing things. So I will say that anybody who is interested in the wellbeing of the economy must support the regulatory authorities.
You are right that CSL is the foremost Nigerian stock broking firm. In fact, when I look back now, it is not only the first wholly-owned Nigerian stock broking firm, but also the first Issuing House.
How did you arrive at your succession arrangement?
The successor is an integral part of any success story, like they say there is no success without a successor. However, I did not just pick a successor by myself. It was God who guided me in naming my successor. In any case, who wouldn’t pray that his child succeeds him?
In fact, the inspiration to start my own company came through my then eight-year-old son. I always sought the face of God in whatever I do. My family and I were in the chapel in my house praying to God for the way forward after I was cheated out of the investment bank I helped start for NIDB, when my son said ‘why are you worrying yourself on being a boss of another person’s business, why not start your own?
I didn’t just say ‘oh, you are the eldest, or you are the youngest’. Every step I took was through the guidance of God.
Where do you expect FCMB at 50?
If wishes were horses beggars would ride. The young man at the helm of affairs at the bank now says he wants the bank to be among the best five in the next five years.
We started FCMB with certain values, ideals and culture that I want the present management to continue, so that they can attain maximum height. I want the present management to surpass what we have achieved.
I would like an FCMB that is highly professional, that is respected for its service delivery, successful for its returns to shareholders. I would like an FCMB that will be seen as the bank of first choice.
When FCMB started in 1982, it was the number 5 investment bank in the country. But today, some of the ones that were in existence then are now dead, but FCMB is waxing stronger, to the glory of God, and the values that have been built which I would want to see continue, and even improved upon.
I insisted that my staff must be smartly dressed in dark suits. Before then, bankers could just wear shirts and ties. But today, every banker dresses smartly.
How achievable is Vision 20:20:20 and are banks funding the real sector adequately?
Very much achievable with the resources that we are endowed with in the country. We have what it takes, and even have the intellect to diversify. What we need is effective management – the ability to organize and coordinate things.
Banks have tried to support the real sector, though the support may not have been sufficient. But this is not down to the banks alone, but a whole gamut of factors such as infrastructure, macro and micro economic policies, etc. There are other challenges, like the lack of long-term funds. But we will get there. Rome was not built in a day.
What are your contributions to national development outside financial sector?
At over 76, going to 77 years, if beyond banking I haven’t done to improve the welfare of my people; my life would not have been worth it.
Besides what you hear on banking, one of the greatest hallmarks of my life is that I show concern to the welfare of my neighbour. I funded a purpose-built children’s hospital – Otunba Tunwase Specialist National Paediatric Centre, Ijebu-Remo, probably the biggest of its kind in West Africa, if not in the whole of sub-Saharan Africa. It is not just a primary health institution, but a referral hospital.
Before then, about 20 years ago, I adopted and endowed the Children’s wing of the University Teaching Hospital (UCH) Ibadan, which is named after me. Also, before my 60th birthday, I built a 40-bed children’s hospital named after my mother in Ijebu and donated to the government.
Then sometime in life, the late Prof. Olikoye Ransome-Kuti encouraged me to build a referral institution patterned after the Great Ormond Street Hospital in London, whereby cases involving children can be treated, whereby they can do research, and difficult cases concerning children can be referred.
That informed my decision to build the Paediatric Centre and, by the grace of God, I have spent over N2 billion of my own personal resources on the project, and secured the services of one of the best paediatricians, Prof. Adenike Grange, former Minister of Health, who is the Provost and Chief Executive. The facility is not only for taking care of children but I’m ensuring that no child in Nigeria shall die of any curable disease, and also ensuring that no nursing mother dies of any communicable disease.
We are also embarking on neo-natal treatment for children born pre-maturely. The Centre has over 10 incubators, and with one of the best laboratory services around. The only problem is that it is located on the express road in Ogun State, but it is now being recognised.
All these are giving me some satisfaction that the good Lord has blessed me in my chosen career. It is my way of giving back to the society.
What advice do you have for the leadership of Nigeria at 50?
Let us pray that God will give us men or leaders, those that can lead us to the promised land. Men who have the interest of the common man and the country at heart. Men who will subsume their personal interests to national interest. We need selfless, public-spirited leadership. People who will look closely at the problems of the country and face them squarely, with the fear of God. Men who will regard the survival of the nation as an entity in which poverty, ethnicity and hatred are things of the past.
My view on Nigeria at 50 is a mixed bag. I wouldn’t be so pessimistic to say that we have not achieved anything. There is human development, intellectual development, also capacity development, development of resources. But management had been at a discount. What this economy and nation lack is good management; people who will subsume their personal interests to national interest. We now need God-fearing leadership.
Leaders should not focus on zones and regions, but how to build a Nigeria where people can walk on the streets anywhere in the country without being afraid of armed robbers. There so many people who aspire for public offices just to loot, rather than looking for possible ways of improving the country.
How do you unwind?
I am active in church and spend a lot of time talking to my God. I also spend time in my swimming pool or going in my boat. Also, I travel a lot; I read and watch international news. I have a large expanse of land in my Ijebu-Ode home – 50 acres – and I just walk around, or sometimes I go round my farm, in the orchards picking fruits.