New value proposition for customers as Heritage, Enterprise Banks merge

Business man

By Amechi Ogbonna

It was a moment of joy for stakeholders in Heritage Bank when recently the Central Bank of Nigeria (CBN) granted final approval for its merger with Enterprise Bank.

Expectedly, the approval was one of the last hurdles, managers and directors of the bank needed to scale before integration of the two banks’ processes and systems ahead of the great promises the merger sets to unfold to the business community would begin.

The CBN’s nod which was also coming on the heels of a similar approval by a Federal High Court for the scheme of merger for both institutions into a mega institution tht will deliver quality financial services to the Nigerian and international business community.

In its recent letter to the management of Heritage Bank conveying the news, the apex bank noted  “The Management  of the Central Bank of Nigeria  (CBN) has approved  the grant  of Final Merger Approval  to Heritage  Banking Company  Limited and  Enterprise Bank Limited and  the license  of Heritage Bank Limited (the successor).

An elated Managing Director/Chief Executive at Heritage Bank, Mr. Ifie Sekibo said, “We’re pleased with the final approval of the merger of the two institutions. The stage is now set for us to achieve the vision of a bigger and better bank that offers world class banking services designed to help customers to create, preserve and transfer wealth”.

Sekibo added that “With this acquisition, the new Heritage Bank is better positioned to serve its clients spread across over 200 branches, 177 ATMs, 57 Cash Centres and 2000 POS Terminals in 26 states. We shall harness the better of the two worlds combined in terms of our innovative products, bespoke technology and extended branch network manned by a team of tenacious people; as this automatically transforms our bank from a tier-2 player to a strong tier-1 player that is ONE! BIGGER! BETTER!,”.

He further srtated, “as we integrate into a larger bank, we assure our esteemed customers that this strategic stride is ultimately to serve them better. We affirm our commitment to all stakeholders that we will continue to deliver on our promise of creating and preserving wealth across generations through highly personalised service.”

The road to the merger began on October 15, 2014 when Heritage Bank successfully acquired Enterprise Bank in a mega deal estimated at about N56 billion.

It was indeed one transaction that defied the prognosis of many industry observers who had expected the pendulum would swing to the side of bigger banking brands that participated in the bidding process.

But the assessors of the transaction appeared greatly convinced that a Heritage Bank merger with Enterprise Bank would offer shareholders better value proposition than all other contenders with the benefit of hindsight.

For instance, on the score its technology efficiency, the bank had since settled for business to further demonstrate that its snapping of the Enterprise Bank deal was no fluke having identified its areas of core competence including the financing of small and medium enterprises.

Similarly, Federal High Court sitting in Lagos had on July 27, 2015 ordered an Extra-ordinary General Meeting of all the parties to the deal which was eventually held on August 12, 2015.

At that forum, shareholders of the two banks agreed that the merger would create bigger value proposition for them in the long run and wasted no chances in consumating it.

Largely seen by industry analysts as a brand built on a legacy of innovation, Heritage Bank recently achieved the ISO/IEC 27001:2013 certification award in recognition of its commitment to effective and secured financial system, thus becoming the only bank in Nigeria to get that certification in less than three years of operation.

With that certification also the bank joins the league of big players including the Central Bank of Nigeria that have been certified in the banking industry.

“This was reinforced when it received the Payment Card Industry Data Security Standard, PCI DSS certification, in addition to the ISO/IEC 27001:2013 award. The PCI DSS is a proprietary information security standard for organizations that handle branded credit cards from the major card schemes including Visa, MasterCard, American Express, Discovery, and JCB.

The certification was in recognition of the bank’s commitment to effective and secured financial system which has put it in the league of big players in the industry confering internationally-recognised standards on its operations.

The CBN had in December 2012, re-issued SGBN’s banking license, to Heritage Bank Company Limited as a regional bank following which it  reopened for business under a new name on  March 4, 2013.

Under the terms of the CBN license, Heritage Bank is to offer full commercial banking services with a regional bank status, which it flagged off with a validation exercise for account holders of the former Societe Generale Bank (Nig.) Ltd. That exercise however turned out to be a good marketing strategy that guaranteed it a huge stock of loyal customers that enabled it consolidate its customer base as events unfolded.

But not being satisfied with playing on the fringe of Africa’s  largest economy, the bank in October  of 2014, acquired 100 per cent  shareholding in Enterprise Bank, a nationalised financial services provider with over 160 branches and US$1.6 billion in assets so as to enlarge its market share.

To secure this deal Heritage Bank paid AMCON about US$$340 million (NGN:56.1 billion), in cash, for the acquisition.  Heritage Investment Services Limited (HISL), the investment arm of Heritage Banking Company Limited (HBCL), was the winning bidder out of 24 Nigerian and International companies that participated in the race for acquisition of Enterprise Bank restructured by the Assets Management Corporation of Nigeria after the 2009 banking crisis.

At the presentation of the ISO/NEC 2700-2013 award on behalf of the British government, to the bank in Lagos on August 5, 2015, the Deputy High Commissioner in Nigeria, Mr. Ray Kyles commended the bank for setting high standard in the financial industry and pledged the continued support of the British government for Nigeria’s financial institutions. “It is not an easy task. This award remains a cornerstone of your reputation,” he said.

While receiving the award, the Managing Director of the bank, Mr. Ifie Sekibo, noted that banking is a business of risks management, from assets to data, adding that it was fundamental that whatever a customer keeps in a bank is in safe custody. “This is a day to beat our chest. Heritage Bank is an idea, not a bank. We are a service company providing banking service; and we are the best in the class of security of our information systems. It means funds kept with us are safe. This award is a validation of our mission to promote high ethical standards, integrity, and good business practices,” he said.

Sekibo stated that innovation is inevitable for the banking industry. This, he said, was due to changing dynamics of the global economy which has penetrated banking. He therefore, reiterated the commitment of his bank to introducing more innovative banking products and services to meet the needs of its customers.

Solomon Edun, Managing Director of Global Infoswift, project consultants explained that the certification is a rigorous exercise that confers internationally recognised standard on the recipient. He added that the award was the most rigorous certification in terms of information, process/data and asset security, assuring it will put Heritage Bank in a good stead to protect customers’ funds and frustrate efforts by fraudsters to access their information and assets.

With growing concerns that substantial part of banks’revenue is being lost to fraud with no single bank being spared, Heritage said it is determined to reinforce safety of customers deposits.

Incidence of Frauds and Forgeries in Banks was put at 8502 between  (January – September 2014 involving about N23.34 billion and an actual loss of  N3.01 billion, the ISO 27000 family of standards helps organizations keep information assets secured. It also helps organizations manage the security of assets such as financial information, intellectual property, employee details or information entrusted to you by third parties.

The ISO/IEC 27001 is regarded as the best-known standard in the family providing requirements for an Information Security Management System, ISMS.

It emanated from the British Standard Institute, BSI an independent, non-governmental organization, the members of which are the standards organization of the 164 member countries.

It is the world’s largest developer of voluntary international standards and facilitates global trade by providing common standards between nations. Nearly 20,000 standards have been set covering everything from manufactured products and technology to food safety, agriculture and healthcare.

Little wonder the bank went for the certification which it hopes would further boost customer confidence in its brand.

To further demonstrate its commitment to entrepreneurship development in league with the Entrepreneurship Development Center of the Pan African University (PAU) recently entered into a  partnership to bring together top chief executive officers to discuss Emerging Horizons for Small and Medium Enterprises in the country.

The Chief Executive Officers who attended among other things discussed with SME operators on a variety of issues during the 9th EDC annual SME conference sponsored by Heritage Bank scheduled to hold next month in Lagos.

Sekibo noted that, “Partnering EDC to organize conferences on entrepreneurship development was part of its efforts to help SMEs get better and bigger, which was also one of the strategic objectives for the  acquisition of Enterprise Bank”..

“We believe that their testimonials will serve as a big boost of inspiration for SME operators that would attend the conference,” he said.

Heritage Bank partnered EDC and other organisations has helped SMEs build competence, access new opportunities and develop necessary leadership skills required for success in the business world. Some of these include the

Heritage Bank SME Clinic, Heritage Governance Model, the Paris Club Credit Scheme and the Enterprise Stories, a radio programme which focuses on stories of successful entrepreneurs. The sponsorship of the Annual EDC’ SME Conference is to complement these initiatives  aimed at promoting SME development in Nigeria.”

Heritage Bank, since inception in 2013, has been at the forefront of promoting SME development in the banking industry.  The bank  designed and offers an array of products and services based on the perceived and expressed needs of SME businesses.

Source : SunOnline

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