At the just concluded IMF/World Bank Annual Meetings in Washingto, Mr. Bisi Onansanya, Group Managing Director, First Bank Plc, had a brief chat with Nigerian journalists who attended this year’s meeting of global financial egg heads. Omoh Gabriel, Business Editor was there and captured the brief chat. Excerpts of the discussions.

The major focus at the World Bank/International Monetary Fund meetings this year is how countries can effectively manage the ongoing global financial recovery process. As we prepare for the 2011 election, what in your opinion should be Nigeria’s focus in terms of good governance and growth-oriented policies?

These are two key questions that must be addressed separately. In terms of good governance, we can only hold leaders accountable if they are elected into office.

So the key to good governance is to ensure that you have a transparent electoral process that also ensures that only those who win elections get into positions of power.

The expectations are very high. I like to believe that the outcome of that experiment will be very positive; but we can only wait and see.
In terms of turning around the Nigerian economy, you need to also be sure that the ongoing reforms in the banking sector are concluded, and on time too. I’m not sure whether you are aware that there has been a conviction. That is the beginning.

No economy can survive and grow to its maximum potential unless it has a vibrant banking sector. I like to believe that the ongoing reforms by the Central Bank of Nigeria are on the right path and I also believe that by the time we conclude these reforms, Nigeria will have a strong banking sector.

Do you think that the recent judgment against the former Group Managing Director of Oceanic Bank International Plc, Mrs. Cecilia Ibru, will serve as a deterrent for other CEOs in the banking sector as regards reckless management of funds and poor corporate governance?
Let me say that good governance is key to the survival of any corporate organisation and that it is also not negotiable that you exhibit good corporate governance.
If you attempt to side-track good corporate governance, it will always tell in the end. I do not like to be making comments on individuals. It is regrettable; nobody is happy seeing his colleague go to jail. But I also believe that it was not coerced.

I understand that she pleaded guilty and so, there is nothing more to add. It is a lesson for us all. But I can assure you that in First Bank, we have always lived above board and we will continue to do so.

Yes, it should be a deterrent and we have no apologies for anybody that is caught in that process, provided that person goes through a fair trial. I think it is good for the industry and it sends the right signal to everybody that one day, you will be caught, just do not do it.

From the figures being rolled out, banks are back to profitability. But this has not translated into increased lending in the economy. When should the public expect banks to begin the kind of lending that can aid economic growth?
That is contradictory. Banks can only make money when they lend. The mere fact that banks are back to profitability means definitely that there are lending activities.

Lending can be to the private sector and it can also be to the public sector. So, I think linking the two is not appropriate. About lending, I can confirm to you that First Bank is lending and the records are there. By the time I release my fourth quarter result, which will be in the next couple of weeks, you will see a significant growth in my loan portfolio.

But let me now relate that to the expectations of the public. You should understand that the funds that banks lend to the public are depositors’ funds. So, banks are not allowed to take excessive risks on those funds because we have no excuses to the depositors.

With what is happening in the Nigerian economy today, banks are very careful with the kind of parties that they advance credit to. We can only give loans to organisations that make profit and can pay back those loans. Banks are not in the business of charity; banks are not in the business of giving grants to businesses.
The challenge today is that a lot of businesses today have challenges of cost, which make them almost unprofitable.
Only a very few Nigerian businesses are actually profitable because of the challenges of infrastructure. Every Nigerian organisation today is almost a local government on its own.
They generate their own electricity at very expensive costs and in some organisations, costs of generating electricity and providing other infrastructure are in excess of 30 per cent of the total cost of production.

These are the challenges that we need to deal with. Until we deal with them and we reduce the cost of doing business in Nigeria, and by extension, the cost of production, businesses will continue to struggle to survive and banks will find it extremely difficult to give loans to businesses that are struggling.

But beyond that, we are not saying that all Nigerian businesses are not doing well. A large number of businesses are doing extremely well and today, I can assure you that most banks will increase their loan portfolio and will meet the minimum percentage that we have set for ourselves.