It is the most advanced Management program out, coordinated by some of the finest business operators and thought-leaders. I invite you to beat our early bird and join Tekedia Mini-MBA. Check out our full curriculum and register here.

Today, the most aggressive banking institution when it comes to growth in Africa is Access Bank Plc Nigeria, the continent’s biggest bank by customer base. The bank is acquiring anything on its path as it scales its mission across the continent. Yet, despite the high octane activities, the bank has not returned superb values to investors. Using Nigeria as a case study, FCMB returned 80%, Zenith bank (33%) and UBA (21%); Access lost 16% of its value in 2020.

In the Nigerian Stock Exchange, Access Bank is worth N325 billion; GTB remains the leader at N974 billion.  UBA is priced at 297 billion. So, two things are happening here:

• (1) the largest bank in Africa by customer base (Access Bank) has not translated the huge customer volume into a great valuation,
• (2) the largest Nigerian bank on geographical footprint (UBA) is yet to unlock great value on that playbook.

So, what can we learn from these cases on how Nigerian investors think?

Personally, I do believe that investors want to see profitability above everything in Nigeria. Your absolute revenue while great does not provide confidence to most investors; they want to see that you are making money because if you are profitable, you will live long as a business.

Another thing is cost: the most valued banks in the nation – GTBank, Zenith Bank – have superior cost-to-income ratios; those give investors confidence that management is well ahead on cost containment. Zenith Bank has a market cap of N832 billion in Lagos.

There is a big lesson here: few technology companies in Nigerian Stock Exchange (NSE) have done well. If you look carefully, most of those firms do not have superior profit margins. Profits provide the basis for dividends and with the share values muted for over a decade, most investors have been capturing marginal values via dividends. This is why I think modern startups may struggle in NSE as most investors expect a very low gestation period to profitability, and when companies do not deliver that, they are punished by pushing their stocks down.

The gestation period to profitability in a typical Nigerian startup is long. That long gestation is also the reason why many startups or small businesses collapse few years of founding. Typically, one way to deal with this is to raise capital, ramp up market entry to grow fast enough to attain profitability. But in our extreme volatile economy, if the timing is off by months, the company can collapse. You just run out of cash.

Access Bank has size now via customer base, Zenith Bank has profitability and GTBank has its cutting-edge technology with profitability. FCMB looks promising with the versatility in its product offering. UBA gives you the continental spread. But if you check everything, Nigerian investors are really interested in cost efficiency and profitability. If you can deliver both at the same time, your numbers will rise.

Tekedia Institute is excited to welcome Innovative Data Solutions Ltd to Tekedia Mini-MBA. IDS is an innovative marketing research and business consulting firm driven by innovative minded professionals who are poised to provide innovative solutions to clients in African markets. The Founder is businessman and philanthropist Jayden Robinson.

IDS helps companies to build brands and design the future through superior insights on market systems. From all of us at Tekedia Institute, we look into that promise of co-learning with this amazing marketing and business consulting firm.

Welcome to Tekedia Institute.

Tekedia Mini-MBA Edition 4

He is an IAM Engineer (Identity and Access Management Engineer) and holds  a PhD in Computer Science with focus on Network and Information Security from Universidade do Porto. He had earned an MSc in Computer Security and Forensics from the University of Bedfordshire. He is part of our Cybersecurity and Digital Forensics Faculty.

Dr Francis Nwebonyi works in one of the finest emergent companies in Europe where they write the next generation software systems for the BMW Group’s future driving machines. Part of his job is to secure the integrity of autonomous vehicles.

In his course, besides the videos, he did what PhDs do: he has a written material on information security and digital forensics, structured for business managers and operators who want to have a management-level understanding of the domain. If the world of business is moving online, digital security is no more just an IT person’s job: managers have roles to play.

This course is designed for managers and business operators, not necessarily for techies. Our program is a business school, not an IT school. So, everyone is invited.

To register for Tekedia Mini-MBA, begin here.

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