Pera

A Nigerian banking license in the 90s was 20 million Naira. Setting up a cheap branch then was about 340k Naira. I know this because I was actively involved in developing the business plan and obtaining the Oceanic Bank license. How could a 34-year-old manager at one of the biggest banks in the country at the time (All States Trust Bank) raise 20 million Naira? You need to be able to use your imagination to realize that things were not only much easier to do at the time, but that relationships built over your career also mattered. There were two main gigs at heavily deregulated period of Nigerian financial services: 1. Building your own finance house with a lesser license or... 2. Building a bank with very little capital. Many finance houses and banks were established, but many didn't survive, as they were only vehicles for FX round-tripping at a time when the gap between the official and parallel exchange rates was wide, due to the economic chaos created by the Structural Adjustment Program (SAP). Some of my family members started KMC (Keneth Michael and Co), a finance house that failed, and later learned from that experience that it was better to acquire a bank. They boldly went for the biggest, as the government was also divesting from the banking sector, as mandated by the foreign lenders. They acquired UBA with around $12m Dollars raised in private placements. Others followed other paths. Jim Ovia started one from scratch using the same fundraising mechanism others used in an era of market frothiness, when fortunes were being made from FX trading. Tony Elumelu chose to acquire a smaller bank that was almost insolvent and undercapitalized. He turned it around, and it became the fastest-growing bank in Nigeria's history. They went after the segment most people ignored, the young and the poor. While account opening balances at other banks were high, they went lower. They practically owned the student market and were growing fast. Fast forward to an era in which deregulation was halted due to high failure rates among banks and finance houses. There was a forced consolidation of banks, and it was a game of being bought or buying others. UBA faced significant internal turmoil, and the Central Bank removed the Chairman. Standard Trust Bank moved in to merge with UBA in a strategic acquisition move that was unheard of in the industry. I still remember a 10-hour closed-door meeting with stakeholders before the deal was sealed. One person most people have forgotten about, who was the architect of this deal, was the late Albert Egba Okumagba, the CEO of BGL Securities at the time. He was the architect of Tony's first and second acquisitions. The Capital market and the financial services sector were much more intertwined at the time. Young men like the late Egba Okumagba and late Osaze Osifo shaped much of what we now know as today's behemoths through brilliant financial engineering and collaborative relationships. It is better for you to look for what you can build, like they did today, instead of peddling rumors on Twitter.