STERLING BANK : UNEASY CALM OVER THE RETURN OF YEMI ADEOLA
If all an organization needs to gain a competitive advantage over its competitors and convince its investors that it has what it takes to deliver the best value for money were ambitious statements of purpose and vision ,then Sterling Bank Plc would have ranked a world-class corporate entity .
The bank’s statement of purpose on why it is doing what it is doing , why the organization is existing and why it is serving a higher purpose indicated a well articulated ambition as it prides itself in its purpose to ‘Enrich Lives ; even its vision statement on what it will achieve in the future, the results it wants to reach for, the measurable impact it wants to make is clear enough to inspire any investor as its overall business aspirations in its vision is to ‘be the financial institution of choice‘
However ,the above are far from the expectations of corporate stakeholders ;they look beyond these two statements . No matter the degree of glamour around statements of purpose and vision or how beautiful and ambitious such statements may be , no stakeholder take them seriously without some element of fear. To the corporate stakeholders ,particularly investors. the belief is that it is easier to talk the talk than to walk the walk .
What matters to the stakeholders is whether this bank has been able to enriched lives and become the financial institution of choice in the true sense of those statements . Unfortunately , Sterling Bank, when bench marked with its peers in the industry , has remained a corporate laggard .Good for those with that skepticism, a bank like Sterling confirms their fear .
This lacuna is raising questions .Is Sterling Bank Plc under any jinx to remain on treadmill perpetually ? From its inception as a product of the banking consolidation, the bank, an amalgam weaklings saved from extinction by the regulatory authorities, has continued to be uninspiring .The takeover of the distressed Equatorial Trust Bank by it did not help its case . Till today , the inability to turn it around for better competitive value creation has continued to raise serious concerns among its stakeholders. And the blame for this is put on the door step of its successive leaders at the driver seat of the bank that failed to discover the right joker for a much needed turnaround
Its stunted growth profile , miserable non dividend or capital gains delivered to its investors which could be pinned down to its inability to control costs and risk are all the manifestations of its laggard status restricted its progress when bench-marked with its peers and a best in class entity .The unimpressive fate of this bank is .particularly raising deep concerns .
To some observers the ugly fate of Sterling Bank could be traced to its its poor beginning as a bank consummated from four entities regarded as mere weaklings ; but to the others, its uninspiring profile is more a leadership question than any other factor .
Both sides have their reasons . To the former ,the bank was dead on arrival; Sterling Bank truly was poor in resources . But to the latter observers, the blame should be placed squarely on its past leaders who were believed to lack the expected capabilities to deploy the available resources appropriately and gain competitive advantage for the bank .
In fact , in some analysts views ,those in the leadership position of this bank were adjudged to have exhausted themselves of better idea or fast asleep at the switch before they were dropped . Sequel to this , to translate the above vision to reality and create competitive values for its stakeholders has become more difficult .
To those holding the past leaders for its uninspiring history , the excuse of Sterling Bank’s poor beginning is irrational , after all , there so many examples of companies that overcame seemingly insuperable handicaps and built positions of global leadership when they were under better leadership .At the domestic level ,Tony Elumelu achieved this feat by waking up a dead bank and renamed it Standard Trust which took over the old UBA.
For this , the claim of Sterling’s poor begginnig may not be farfetched . Relative to other resources at the disposal of any organization , people ,no doubt , are at the heart of strategy .The knowledge and experience of people can be the key factors enabling the success of strategies , tbut hey can also hinder success too .
For this reason, investors as well as other stakeholders are usually hyper mindful of those who are behind the wheels of the company they are interested in.
Unfortunately ,Sterling Bank has not been lucky to have a strategic leader with the sterling traits enough to deliver the above vision ; even though it needs this more than others going by its peculiar foundation , none of its past CEOs has demonstrated he could change its current uninspiring status quo .
Sequel to the above fact and fear , the recent appointment of Mr Yemi Adeola as the chairman of the Board of Directors of Sterling Bank Plc has been generating heated controversy, albeit a la subterranean .To some analysts , the second coming of Mr Adeola sounded more incredible when judged by his lethargic tenure as the Chief Executive Officer of the same between 2007 and 2018. The grouse is that since the merger was consummated the bank has remained on a treadmill particularly under Yemi Adeola who was in the saddle for more than a decade .
Mr Adeola is not the only issue raising deep seated concerns within and outside Sterling Bank . The removal of Abubakar Suleiman , the immediate former CEO of the bank who came in 2018 and the appointment of Mr Yemi Odubiyi, as the new Group Managing Director/Chief Executive Officer is another issue raising heated storms among its stakeholders
With the above recent development ,the fear is that its future still remains very bleak. The despair could be strictly pinned down to the lack of confidence on the new leadership . Adeola is believed to have exhausted himself . This more so as the bank is believed to have become competitively enfeebled under him ;the fear is that his return signals the continuation of lethargy ,convention and myopia that have become much more real and much more the substantial enemies of the bank’s turnaround .
Analysts believed the bank needs a new leadership with the capability to turn the bank around , and this , in their opinion is not Adeola ,not even in the new capacity as the board chairman regarded as the corporate think tank .
Though his CV is impressive with vast experience and exposure, despite these , sadly his performance which was not only unimpressive but also at variance with those credentials going by the facts and figures available in the bank’s audited accounts between 2007 and 2018 .
Figures from the bank’s financial statements confirmed this view during the tenure of Mr Adeola between 2007 and 2018 . Though he started well with a supersonic growth of the.
bank’s profit from N621m at the end 2007 financial year to N6.5b in the same period in 2008 . But the bank could not sustain this momentum till he left the bank as its CEO in 2018 . Its profitability became stunted in the first five years under him with a loss N6b in 2009 ; it backtracked in 2010 to N4b compared to 2008 before its to six N6.6b in 2011, perhaps with the acquisition and integration of Equatorial Trust Bank.
Between 2012 and 2016 , the pace followed the same trend , growing in a snail speed from approximately N7b to N8.3b,N9b and N10.3 before it backtracked steeply N5.2b. The bank under Adeola sustained its roller coaster attitude between 2017 with N13.5b profit in 2017 and N9b in 2018 before he exited the bank and Abubakar Suleiman took over from him.
The most worrisome issue about the bank is that it was when its profitability was seemingly waking up from its slumber that Suleiman was removed. Under him the bank experienced an unusual growth from N15b in 2021 to N19.3b in 2022 , the biggest jump ever in profitability ; yet the man was unseated as the CEO.
The above uninspiring trend in any organization could be pinned down to certain attitudes that are associated with a corporate laggard . First ,when the leadership of a corporate entity is less than fully in control of its company’s future; when what it knows today , the knowledge and experience that justify their position in the corporate pecking order is irrelevant or wrong-headed for the future, this trend is not unexpected
.This could be more so when such a leadership is more of a maintenance engineer working on the present than an architect designing the future ; when the percentage of its advantage-building efforts focuses more on catching up with competitors as against building advantages new to the industry; when a leadership is better at improving operational efficiency than creating fundamentally new businesses and when what is occupying senior management’s attention are more about restructuring and re engineering rather regenerating its core strategies .
The corporate attitude of Sterling Bank is not different from the above . Looking at this bank , the high-profile initiatives that have been launched recently ,issues that are preoccupying its senior management, criteria and benchmarks by which progress is being measured ,track record of new business creation ,dreams and fears on the faces of employees as well s the company’s ability to shape that future and regenerate success again and again in the years and decades to come , all are a semblance of a company more deep neck at preserving the past than competing for the future.
Truly ,this bank’s current circumstance goes beyond what could be handled either by dillittantes or by a leader that is merely intellectually curious.
Sterling Bank , indeed, needs a leader that is not content to follow, the one who desire to rewrite the rules of the game ,unafraid of orthodoxy, more inclined to build than to cut , more concerned to make the difference than making career and one who absolutely committed to staking out the future first that can change the story of Sterling Bank .
From all indications , in the recent years what the bank embark on more than other things are restructuring and re engineering .Though these are important, but a company must be capable of fundamentally re conceiving itself, of regenerating its core strategies and of reinventing its industry and capable of getting different.
.The question now is: does the new CEO brought to replace Abubakar have the capability to outperform his immediate predecessor and turn the bank around ? Time will tell .
