Strategic Media & Development Communications Unit MAINTAINING PRESENCE IN A DYNAMIC FINANCIAL SERVICES MARKET The dynamics of financial expansion in a post conflict environment are varied by the mix of leadership and resilience within top level management available under such constraining circumstances. The flight of capital and manpower that characterizes conflict and economic upheaval creates its own difficulties in efforts to maintain presence under such harsh conditions. As Sierra Leone’s civil war loomed, it is significant to note that only one of the banking institutions made the decision to leave. Barclays Bank Plc made their decision to pull out of the war ravaged economy at a time when flight of human resources and capital seemed to spell doom for the very fabric of this society. The resultant exit was made on terms that were congenial to say the least. The Bank offered its facilities, assets and liabilities to the Government of Sierra Leone for the asking price of a nominal one Pound Sterling. Many would question why a management buy-out was not put in place or why a shareholder take-over was not considered. The main reasons may not be unconnected with the fact that by then, the bank’s main shareholders were British based and hence the pull-out impacted adversely on the bank, nor was it possible to effect a management buy-out because those at the helm at the time considered that they could not bear the brunt of the heavy burden on personal financial standing if the gamble to turn the bank around did not pay off. So it was that the management opted to go under the supervision of the Government of Sierra Leone as partners with a 51% holding, at least to avoid the incidence of a run on the bank due to customer uncertainty. The Bank that evolved, Rokel Commercial Bank has over the years remained a robust financial institution but not without its own internal challenges and external reactions to a phenomenal growth in the financial and banking sectors after the war. Most pundits would never have predicted that the outcome of war in Sierra Leone would have led to the rapid growth in financial services and banking sectors that this country has experienced since. The banking sector grew from around four commercial banks in 1992 to well over eight in 2012, an increase of 400 percent in just around ten years. Such rapid growth would necessarily yield to expansion in financial services, a growth in the domestic environment through internal rationalization for example by reducing the proportion of the un-banked or through influx of capital, investment and remittances to resettle and combat the post war conflict environment. It is not unusual for post war reconstruction to attract such voluminous inflow of funds, conducing to a widened financial services sector, with increased demand for banking services. This scenario would have been responsible for this expansion but would necessarily have brought with it the need for existing institutions to rationalize their client services portfolio, the need to fight for every customer’s Leone becomes intensely competitive and the instinct for survival more conditioned on the caliber and quality of leadership. Rokel Commercial Bank exhibited that astuteness in maintaining robust financial prudence and a sustaining aspiration for growth within a competitive environment. The Bank easily came under pressure to innovate in a generic manner and benefit from internal mobilization of resource and skill sets whilst acting in a manner befitting a Government owned institution. The Board of Directors appointed by Government is invariably not grounded in the nuances of the financial services sector and that may have had its own concomitant effect on the value attached to leadership and creative thinking within the institution. The essence of a viable commercial banking sector depends to a large extent on the degree of central banking supervision and lateral thinking within the financial services sector generally. Expanding financial products, widening effective use of insurance market and e dynamic stocks bonds and shares market are all financial products that enhance services and sector growth in banking. The Central bank would be seen to be weak or disengaged from its core functions if there is a tendency for general failures within the commercial banking sector or otherwise for such lapses as excess authority and acts of unbridled recklessness in maintaining sound probity and strict codes of lending practice. Measures to retain customer assurances of sound decision making would have to be jettisoned in order for any lapses in the services sector to occur with any likelihood of impunity. Whilst there are no conclusive evidence that this was the case, the central bank had to deal with emerging issues around commercial banking regulations specifically with respect to soporific issues that engulfed the Sierra Leone Commercial Bank and the Rokel Commercial Bank in recent past. These incidents should not indict the residual management teams at these institutions as much as it should focus on how robust central bank control and oversight may have avoided such disparaging views of general banking practice. Rokel Commercial Bank has indeed come a long way in maintaining customer assurances that theirs is a strong foundation built on excellent banking pedigree. The bank enjoys a tremendous amount of goodwill. It is widely seen as a strong financial institution, run by mainly competent bankers and holding sway to a significant proportion of all banking transactions in this country as evident by their corporate returns at the Central Bank. Such a standing exudes that level of public confidence that comes from high customer satisfaction and a professional attitude and approach to all their dealings. As one of the leading Commercial Banks in Sierra Leone, the management at Rokel Commercial Bank has been assisted greatly by their attention to detail and the will of a determined middle to upper level management team that has demonstrated the confidence to take the bank to the next level. That the mistakes of the past would not impact on the bank’s current performance is not to be disputed, hence the bank reporting a loss in the financial year ending 2013. The bank has nonetheless raised its profile within the sector as its transitional leadership moved swiftly to secure customer confidence on its activities. Despite the high profile sacking of its erstwhile Managing Director, the Bank’s leading role in the sector assured it of a firm support within its customer base and has started on a drive to recover some of the bad loans inherited by the transitional team. The duty to retain the bank’s profile in a positive light must not be lost on the current management team and the expansion of new products and services should demonstrate that the bank itself has not lost the desire to be innovative and dynamic. The bank has so far responded fairly well to the concerns of its large customer base and the fact that there has not been a mass exodus or a run on the bank must signify that something is being done right. Rokel Commercial Bank has every reason to trumpet their resilience in such a dynamic and intractable financial services sector in Sierra Leone. It has held its position as a high performance institution within an expanded market and improved services to its client and stakeholder groups. The bank has managed to hold on to its market share with a view to improving on its signal position through introduction of automated banking services, electronic banking products, safe and secure handling of its transactions and services. On such assurances, Rokel Commercial Bank is well poised to continue on the trajectory of safe, secure growth, managing the change process necessary within their operational environment and always being responsive to customer concerns and aspirations. This is an example of transitional leadership that steadies the boat in such raging seas and ravaging waters.
Posted on: Thu, 17 Jul 2014 17:34:34 +0000
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