Jim Ovia is the founder and pioneer chief executive officer of Zenith Bank Plc – a new generation bank he set up in July 1990. Oviabegan his banking career in 1973 and worked his way up the ranks from a junior clerical officer to chief executive. He speaks of his passion for the profession and the hard work he put into it. He studied Business Administration at first and second degree levels and he is also an Alumnus of Harvard Business School.
His bank came into the market when competition headed to its climax but he went in with a superior strength to compete and with a firm determination to win. He found an entry niche in customer service delivery with a new speed that reduced the turnaround time to a fraction of what the industry had to offer.
He brought about a number of revolutionary changes in banking services delivery that have transformed the business beyond recognition. While the existing banks were yet flashing their credentials of back office computerization, Ovia moved the computer to the front office. With that, he started a competitive race in which he held a comfortable lead from the start. Before the industry giants woke up to the reality of a changed market, one small bank was already well ahead on a new path they must follow.
It was a skilful union of banking expertise and cutting-edge technology that created products and services in a waiting market. Ovia deployed a robust IT infrastructure and a range of digital products, a step that brought technology to the fore of Nigerian banking.
While the whole thing was still looking like a dream to the industry leaders, they began to lose customers to the new banker in town. Ovia mounted his competitive strategy on a tripod of people, technology and service. He got people, which other banks also had; he empowered them with technology, which other bank’s didn’t have and then produced a superior service the banking public had never known.
Having got the people, technology and good service, Ovia launched the most aggressive competitive attacks the banking services marketplace has ever seen in its history. That proved to be a successful competitive ambush, which broke up existing competitive structures in the banking industry and redistributed market share almost overnight. The result was a galloping growth in market share that gave Zenith Bank some of the highest growth rates imaginable in the world of banking.
Ovia’s Zenith bank is an embodiment of the spirit of new generational banking that changed the business culture from the one-size fit all mentality to customer centred new products engineering. The effort and the strategy have paid off. In just a quarter of a century, Zenith Bank arrived at the topmost circle of Nigeria’s banking industry leadership. In 2012, the then 21-year old Zenith Bank took over the banking industry leadership by profit volume and has since held it. The bank has now narrowed the gap in industry leadership by the size of the balance sheet and is presently on the verge of becoming Nigeria’s largest banking institution by asset base.
Growth has followed a strategically defined path of attaining the size and market share of an old generation bank but maintaining an efficient structure of a new generation bank. The great accomplishments have come out of a difficult terrain that Nigerian banking has followed since the 1980s – excessive competition, financial distress and massive bank closures, consolidation and financial crisis.
His ability to create a bank out of such a terrain in which even acclaimed bankers fell along the way and nurture it to attain industry leadership is an exceptional contribution that Ovia has made to the growth and transformation of Nigerian banking. 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.
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 a direct competitive push in the market front and pressed hard and long until he seized the business from competitors.
Like a stream channeled to a new course, the Nigerian banking public was largely redirected to flow into the Zenith heights. Improved customer service efficiency backed by technology provided adequate capacity for the bank to serve a rapidly growing customer base. With that, the bank maintained a growth rate well ahead of the industry – a confirmation of rapidly growing market share.
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. This titration has created the biggest profit capacity in the Nigerian banking industry.
The bank’s income statement illuminates the beauty of this combination. While it is the second largest by revenue, it is a distant first by profit. Zenith Bank has consistently maintained one of the least operating cost margins in the banking industry, a mark of efficiency 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 Nigeria combines the advantages of high volume of transactions with the leading profit margin that Ovia has 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 maintained a significantly clean balance sheet over the years and consequently one of the lowest credit losses imaginable in the business of lending. This has not let credit losses hurt earning assets, which has equally prevented impairment charges from choking off the flow of revenue into the bottom line.
Besides that, the bank makes provisions for risk asset losses far above regulatory requirement. By the time the banking industry suffered massive credit losses during the financial crisis, Zenith Bank had sufficient reserve to throw off all toxic assets 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 and lead it to become an industry leader in less than a quarter of a century is reckoned as one of the landmark contribution to the development on Nigerian banking.
Beyond being a dominant player in the Nigerian banking industry, Zenith Bank is a global brand with strong presence in the West African coast as well as in Europe, Asia and South Africa.