After I chose the CEO/GMD of Access Bank, Herbert Wigwe, as my Businessperson of the Year, many had written, making a case that CEO/GMD of GTBank, Segun Agbaje, would have been a better choice. Largely, as I noted, all the CEOs won because anyone that saw its institution from Jan to Dec in Nigeria is a winner – our market remains extremely unpredictable that anything can happen.
Yet, despite the strong shareholder value GTBank has created over the years, 2018 was not necessarily superb in that institution. But because it was light years ahead of others, we did not notice. GTbank lost 15% of shareholder value in 2018 even though it accounted for 26% of all banking market value in Nigeria, as at Dec 31 2018. On technology, GTBank has lost grounds to competitors, and Agusto & Co actually ranked it 5th on the Best Digital Bank in Nigeria.
As you can see, I am doing everything to explain why I did not choose GTBank even though it was clearly a category-king in Nigeria. Though it has built the best shareholder value in the last few years, last year was not great. Its technology supremacy is cracking that it came 5th in a ranking. Sure – it remains the best but 2018 was not super-great.
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But when compared with Access Bank, it moved from #3 to #1 (post-deal closure) on asset. It added millions of new customers and it got a good deal on Diamond Bank. Less than 5 years ago, Diamond Bank was worth excess of $400 million; Access is paying $200 million (N62 billion). In short, if Access decides to sell all the real estate of Diamond Bank, it would have extra change on that N62 billion it is paying [I get it; many would throw digital bombs on that last line].
In summary, Herbert has to unlock great value in Diamond Bank to justify this deal. My thesis is that he is a visionary leader to have done this deal. That does not mean that he has added value just by doing it. The Nobel Prize committee gave Obama the Nobel Peace Prize hoping that he would make the world a prepaid paradise. That did not happen, as Obama deployed more hellfire grenades and bombs to protect his nation. I do hope that Herbert will execute.
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