By Babajide Komolafe

The conventional wisdom suggests that banks cannot survive and make profit without charging Commission on Turnover (CoT). CoT is a service charge for every transaction that occurs in a current account. Some banks even impose this charge on savings accounts. The charge presently ranges from N1 to N5 per N1000. It looks small but it has yielded billions of revenue for banks. In fact in 2012 one of the big banks earned N27 billion from CoT charge.

The impact of this huge outflow from customers accounts, have led to calls for the abolition of CoT charge. The argument is that with the mega profit made by banks, they should spare customers the agony of CoT charge. It is in response to this calls that the Central Bank of Nigeria, CBN, introduced a timeline which ends in 2016 for the complete abolition of CoT charge in the industry.  This should be a source of concern for a new entrant into the industry. It is a big challenge to enter the intensely competitive banking industry at a time the industry is been denied a major source of revenue.

But for the management of Heritage Bank, the newest bank, so to speak, has decided to view it as an opportunity to prove that a bank can indeed make profit and thrive without charging CoT. And to prove this, the bank has introduced zero CoT charge, effective last week Monday.

According to Ifie Sekibo, Managing Director/Chief Executive of the Bank, “it is a demonstration of our commitment to our customers, an indication of our readiness to render qualitative service with minimal cost to them.”  By offering zero CoT to customers, Heritage Bank though new, signifies its readiness to redefine service standard and compete favourably in the banking industry.

The bank took off with the banking license of former Societe Generale Bank, and inherited its deposit liabilities.  Though it commenced operations in March, Heritage Bank had earlier conducted a verification exercise of the account holders of the old SGBN, offering to pay them back their money locked up in SGBN. The exercise which commenced on January 29 lasted for four weeks.

The unprecedented offer endeared the bank to the heart of the SGBN customers. Rather than collecting their money about 95 per cent of the customers left their money with the bank, choosing to maintain relationship with the new bank.

To reinforce its readiness to serve members of the banking public across the country, shortly after it commenced operations, Heritage bank opened two branches in Marina, Lagos state, and Dugbe, Ibadan Oyo state.

The opening of the two branches, according to Sekibo, signifies “the dawn of a new day in the banking industry as we make history with the full establishment of Heritage Bank. It is a new day that births our offering of trans-generational significance as we commit to helping Nigerians create, nurture and transfer wealth to the significant others in their lives.

“With the inauguration of our operational branches, we have signed up to the charter of establishing a bank that is tuned to the discipline of global best practices and the passion of delivering transformational experiences for everyone that honours us with their custom.

“Our commitment will always be to harness what you have and grow it into what it can be with you and your generations’ security in view.”

Sekibo equally pledged the bank’s determination to work with each customer to create a name and heritage for the present and future generations.

He said, “At Heritage Bank, each guest is unique in all respects and our pledge is to bring you into a world of financial services designed with a deep understanding of your needs and wants.

“Our people have signed up to the charter of getting knitted to the personal lifestyle of each individual and we are wired with the passion of delivering five-star experience and exposure at every point of contact with our clients.

“For all classes of our customers, either at the individual or institutional level, we present a pledge to surpass expectations. We have simplified banking and with our innovative financial products, your money can perform at its maximum potential”.

He said more branches, which the bank would call ‘Experience Centers,’ would be opened in Abuja and Port Harcourt, and other parts of the country soon.

The banking industry in Nigeria is fiercely competitive, and highly oligopolistics. More than fifty per cent is controlled by just five of the 18 banks.  But Heritage Bank is demonstrating ability to make its mark by surpassing customers’ expectations and win the hearts of members of the banking public.

It started with the seamless verification of SGBN customers. Now it’s offering to customers free CoT services, two years ahead of regulatory timeline and against conventional wisdom, and by so doing, redefining possibility in the banking industry.