Jim Ovia is the chairman of Zenith Bank Plc and the pioneer chief executive officer of the new generation bank born in the late 1980s. His bank has overtaken the big players that had been in the business long before it was conceived. Zenith Bank is Nigeria’s second largest bank by the size of the balance sheet, which was in excess of N4 trillion at the end of 2015. It took over the leadership of the banking industry by profit in 2012 and has since held the position.
How the Agbor-born banker and corporate strategist came into the Nigerian banking industry that was close to a century old before he entered and conquered it in 20 years is indeed a classical model of corporate success in the modern world. It is on record that Ovia did not grow Zenith Bank by a single business acquisition. He launched direct competitive attacks in the market front and seized the business from competitors.
Ovia brought a number of revolutionary changes in banking service delivery that disorganized the existing market structure and redistributed market share in his favour. The introduction of technology in the front office was his first shot in the market space that announced his coming into the business to the banking public and the rest of the operators.
While the leading banks were yet priding themselves in computerizing banking operations in the back office, Ovia launched computers in the banking halls, which empowered bank tellers and reduced turnaround time in customer service. The significantly increased service efficiency drew customers to the bank, which was further reinforced by an aggressive marketing drive the industry had ever known.
A new level of service efficiency backed by technology provided adequate capacity to serve a rapidly growing customer base. With that, the bank maintained a growth rate well ahead of the industry. That growth swelled the top line while the internal service efficiency limited operating cost. This is how Ovia created a bank that has the size and market share of the old generation bank but a lean operating cost structure of a new generation bank.
The beauty of this admixture is illuminated in the income statement how the bank that is the second largest on revenue is a distant first on profit. The bank has consistently maintained one of the least operating cost margins in the banking industry, an efficiency market well above the records of even the smallest banks. Conversely, it has also maintained one of the highest profit margins in the business. No other bank in the system combines the advantages of high volume with high profit margin that Ovia configured in Zenith Bank.
A key element of the strategy that underlies the bank’s exceptional performance is its low risk exposure. The bank has operated with a significantly clean balance sheet with one of the lowest credit losses imaginable in the business of lending. This has not let impairment charges choke off the flow of revenue into the bottom line.
Besides that, the bank makes provisions for risk asset losses far above what is required. By the time the banking industry suffered massive credit losses during the financial crisis, Zenith Bank had sufficient reserve to throw off toxic asset without hurting current revenue significantly. That explains why it suffered only a profit decline at the peak of the risk asset losses while most other banks sank into huge losses or major profit drops.
Banking is a business that has faced a difficult operating terrain from the removal of entry restrictions in the mid 1980s, excessive competition, the resulting financial distress and massive liquidations that followed through the challenges of consolidation to the devastating aftermath of financial crisis. The ability of Ovia to create a bank out of such a terrain in which even acclaimed bankers failed along the way and lead it to become an industry leader is no doubt exceptional.
Beyond banking, Ovia has business interests in telecommunications, real estate among others.
March 15, 2016 ZENITH BANK PLC Proposed Dividend 155 kobo per share ( Total 180k) Proposed Bonus Nil Closure Date 29th March, 2016 AGM Date 6th April, 2016 Payment Date 6th April, 2016 AGM Venue Banquet Hall Civic Centre, Ozumba Mbadiwe Victoria Island, Lagos