Perhaps, until 2006, the concept of de-marketing, described by the Central Bank of Nigeria, CBN as an unethical and unprofessional practice of de-marketing colleagues/other banks in the industry by spreading false rumours, was almost alien in Nigeria banking sector.
But by 2008/9, the concept assumed a near alarming dimension during the last days of the regime of Prof. Charles Chukwuma Soludo, the erudite Governor of CBN.
At that time, two major banks, one, a leading financial empire, still in existence and the other, now consumed in a policy induced merger and acquisition policy of Soludo’s successor, Sanusi Lamido Sanusi, current Emir of the ancient city of Kano, were at the centerstage of serious de-marketing that almost destabilise the entire banking sector.
The crisis became so pronounced that the CBN had to issue stern circulars to warn industry operators to desist from such unethical practice or risk severe sanctions.
In one of the circulars, the CBN stated, “All banks’ Chief Executive Officers are advised to immediately address all their staff to heed this warning as any proven case of de-marketing by any means and spreading false rumours or negative comments against other banks, will henceforth be sanctioned as follows:
“The bank officer(s) involved in the exercise will be dismissed and blacklisted for unethical and unprofessional behaviour, and The banks’ MD/CEO will be issued with a letter of warming by the Governor of the CBN and the letter will be made public, while a re-occurrence could also lead to such CEOs receiving a stiffer sanction,” the CBN warned in a circular dated 2006, and signed by the then Director of Banking Supervision, Ignatious Imala.
Furthermore in a similar circular dated October 21st, 2008, the CBN threatened to impose N10 million fine on any bank involved in demarketing.
However, recent scenarios seem to indicate that the industry appears to have suddenly forgotten these regulatory warnings and may have returned to the dark era.
Leveraging on recent developments in the industry, some operators have resorted to demarking, assaulting their competitors with false information about their financial conditions.
Recently, for example, following the CBN intervention in Skye Bank which led to the sack of the management and board, the industry became awashed again, alleging that some banks were in distress and that the apex bank would give them the Skye Bank treatment.
The rumour, which was fast gaining ground, obviously prompted the CBN to issue a circular on July 8, 2016 dismissing such rumours.
“The attention of the CBN has been drawn to malicious rumours and unfounded speculations that some banks in the country may have gone or may be going distressed. The CBN wishes to reiterate in the strongest terms that these rumours and speculations are untrue and do not reflect the actual health of the individual banks and, indeed, the entire industry,” the apex bank stated.
Unfortunately, the circular has proven very ineffectual in dousing the assault of de-marketing, unlike it did in 2008.
Ironically, the effectiveness of the circular was undermined by the CBN itself as a result of the way it handled the issue of the N2 billion NNPC funds in the care of the banks.
Despite the fact that some aspect of the Treasury Single Account, TSA directive absolves the banks of any wrong doing, as well as the fact that the issue was a case of dollar shortage to meet repayment scheduled, the CBN conveyed the impression that suggested that the banks concealed the NNPC funds and thus provided new ammunition for demarketing.
Most recent demarketing assault had been against some Tier 2 banks, namely Skye Bank, Diamond Bank, Fidelity Bank, Sterling Bank, and Heritage Bank.
In the case of Heritage Bank for instance, those engaged in de-marketing the bank appear not even bothered about its outstanding 2015 financial statements which indicated a profit of N1.1 billion, Gross Earnings of N24 billion and total assets of N483.4 billion.
The unscrupulous banking operators and politicians have falsely labelled Heritage bank as distressed, and next in line for regulatory action.
In July, the CBN in partnership with Heritage Bank commenced the pilot phase of the N3 billion Youth Entrepreneurship Development Programme (YEDP). Out of over 20 banks in the country, the apex bank appointed Heritage Bank for the pilot phase of this project, which involves disbursement of loans to 1, 500 youths. Also last month, African Import Export Bank (Afrexim) invested $150 million in Heritage Bank.
The investment is designed to support the growth of the bank. That Heritage Bank is considered for such partnership and investment from the regulatory body and a regional development bank indicate that Heritage Bank is financially healthy contrary to the claims of the de-marketers.
Beyond the assault on its financial health, demarketers have also assaulted its image, claiming it is “a Saraki Bank”, with the intent of giving its ownership a political colouration. Yet, even at inception in 2013, Saraki’s family has less than 10 percent in Heritage Bank. More so now that the ownership is more diluted due to additional capital from new investors.
Interestingly, the main cause of this wave of de-marketing assault on Heritage Bank is its ‘Blitzkrieg’ success in catapulting itself into the ‘Tier 2’ category of banks in the country.
This started with its daring entry into the industry in 2013, emerging from the ashes of the defunct Societe Generale Bank. Despite the pessimism about its viability and ability to compete in a fiercely competitive industry, the bank commenced with a verification exercise and payment of about N21 billion to depositors of the defunct SGBN. A feat considered impossible by most industry watchers.
And while the industry was still grappling with the fact of its emergence in the industry, Heritage Bank made a daring bid for the former Enterprise Bank. In addition to wining the bid, the bank made the payment for the acquisition in record time, while the management successfully integrated the two banks without any crisis or rancour.
Added to these is the bank’s innovative deployment of technology to render banking services in unprecedented style as reflected by its ‘Experience Centers’. Heritage Bank has also succeeded in carving a niche as an ‘SME Friendly bank’ due to its success in promoting and supporting micro, small and medium (MSMEs) businesses, a space largely neglected by the existing banks. The above are the realities which the de-marketers of Heritage Bank are trying to hide from the banking public.
However, despite this “Pull Him Down Syndrome,” the bank appears unperturbed, as its has shown significant signs that going forward, it would continue to take the banking industry by storm.
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