An innovative spirit and American experience are helping create a potential world-beater

Tayo Aderinokun Deputy Managing Director, Guaranty Trust Bank

INNOVATION and a pioneering outlook have been key elements in the extraordinary success of one of the youngest members of Nigeria’s banking community, and have made the Guaranty Trust Bank one of the country’s top six banks.

Last year, Guaranty Trust made more profits than its main rival, Citibank, according to Deputy Managing
Director, Tayo Aderinokun. “We consider our major competitor to be Citibank because they do business the way we do,” he says.

“There are many local banks that claim they are our competitors. They may be about our size, but we believe that our business practices are totally different from most of these banks.

Guaranty trust aims to meet the challenge from South Africa by creating a regional network based on its established branches

“Our target for the last ten years has been to supersede our competitor Citibank. Before we knew it our figures were up and we had made it. We overtook Citibank in profits last year, and achieved our target.”
Mr. Aderinokun, who previously worked for an American bank in New York, created Guaranty Trust in 1990 with a former associate from another American-affiliated bank. “We wanted to change the face of banking here,” he says.

“We were lucky in that we were among the few professionals that were issued with a banking license, because at that time licenses were only given to either top military officers or big businessmen who had government contacts.

Although Nigerian banking has had to wrestle with its image, new members of the banking community are now managing to raise the standards for the whole industry

“We felt that we owed this country a duty. Given our experience, we could bring Nigeria a lot of the things that were seen as standard practice abroad.
“Realtime online banking was among the innovations that Guaranty Trust introduced – completely different to anything existing in Nigeria in the 90s,” says Mr. Aderinokun. The design of the 33 branches of Guaranty Trust banks have been made more customer friendly, and staff were trained to provide quality service.

“Our desire to have extraordinary customer service, meant that everyone in the bank worked behind the counter, from the managing director to the most junior person. Everybody had their days behind the counter in rotation. This was something that was well-received,” he says.

“And 13 years on, some of the things we pioneered are now standard. It makes us proud that we have managed to raise the standards for the whole industry.”
Over the years, Guaranty Trust has become synonymous with good service, and the bank’s performance has attracted international interest to become the first Nigerian firm to be the focus of a Harvard Business School case study.

Mr. Aderinokun says it would take years to grow to the size of First Bank, for example, which has 350 branches. But he says it would be interesting to combine forces with one or two medium-sized banks.
“I think size is going to be important to go forward,” he says. “We would not be averse to combining with like-minded organizations to create maybe the second or third-largest bank in the country. If we get to that size, with our innovative spirit and entrepreneurial culture, I think we could create a world-beater.”

Guaranty Trust has also established branches in Gambia and Sierra Leone, and there are hopes of opening in Ghana. “We want to try and create a regional network before the South Africans come and swallow us up. It would give us something credible with which we can meet their challenge,” says Mr. Aderinokun.
The Nigerian banking sector has often faced criticism. Insufficient capital and inefficiency have damaged its image. “What we have done, is challenge our own people to find innovative, creative ways to achieve the same objectives, within a regulated framework,” says Mr. Aderinokun.

Several banks have been closed down on account of illegal foreign exchange transactions. Guaranty Trust’s Managing Director says: “What these people failed to realize is that there is plenty of business to be acquired in legal foreign exchange operations.

“Today, we are one of the big four banks in both local and foreign currency trading, and we do it legally.”
“Although there are many banks in Lagos pursuing the same businesses, there is still the rest of the country to explore,” he says. “A lot of these banks are just tiny outfits without enough capital or the size to do anything really serious.

“If we consolidated those banks into 20 reasonably sized banks, then we would probably have a much better financial services environment: the banks would do better business, and the regulators would have a manageable number of banks to deal with.”