Chike-Obi
Mustafa Chike-Obi’s appointment as the chairman of Fidelity Bank’s board of directors has continued to generate excitement and expectations. Chike-Obi’s wealth of experience in the financial industry stands him in good stead. Being the pioneer managing director and chief executive officer of the Asset Management Corporation of Nigeria (AMCON), where he won accolades and admiration from stakeholders in Nigeria’s banking and financial services industry, expectations of him are even higher, writes Lanre Alfred
If his dreams last, Mustafa Chike-Obi, the current chairman of the board of directors of Fidelity Bank, will turn the age to gold. He will challenge resolve and stretch the boundaries of motive till he chances on glory at the crossroads where wildest fantasies mesh with reality. He will also turn Fidelity Bank to the number one in every market they serve, and for every branded product they offer while making financial services easy and accessible to its customers.
From afar, he cuts the picture of a man that seems too tightly packed up inside. Some would say he is chock-full of ideas and flights of imagination that are too densely cast to be undone. Unfastening Chike-Obi, thus, presents a tasking exercise.
A Chip off the Old Block
The son of legendary mathematician and politician, Prof. Chike Obi, still widely revered for solving a 150-year-old mathematical equation, the Chike-Obis are originally Igbo from Anambra State. But Mustafa and his brother, Balogun, were given Muslim/Arabic and Yoruba names, respectively. Mustafa was named after the Turkey Prime Minister during and after the First World War while Balogun was given a Yoruba name because his father was a student of Yoruba history.
“He believed that the Yoruba are the most organised among the ethnic groups in the south because of their war-like capabilities. There was a time the Fulani wanted to conquer Yorubaland, but they were stopped in Osogbo by the Yoruba army. Balogun was a war chief in the Yorubaland, and that was why he named my brother Balogun. He liked the name,” explained Chike-Obi.
He continued, “My father named me Mustafa for almost the same reason. Mustafa Kemal Ataturk was a Prime Minister of Turkey during and after the First World War. Mustafa took Turkey from the primitive age to the modern age, and as a result, the country went from a Muslim state to a modern secular state. My father liked the way he helped the Turkish nationalists against the imperialists. So, for almost the same reasons, he named me Mustafa.”
A visiting professor to the University of Rhode Island, USA; the University of Jos, and the Chinese Academy of Science, the older Chike-Obi, who retired as a Professor of Mathematics at the University of Lagos, died in 2008.
Like his father, who the African Mathematics Union suggests was the first Nigerian to hold a doctorate in mathematics; Mustafa is a First Class graduate of Mathematics from the University of Lagos. He later bagged a Master’s degree from the Stanford University Graduate School of Business.
Charting His Own Path
But while the old man chose to blaze a trail in academia and politics, Mustafa opted for the financial industry and began his career at the Chase Merchant Bank where he worked from 1980 – 1982 as Head of Treasury Department. Instructively, he is reputed to have created the Treasury Department concept in Nigerian banking, which is now a critical part of the industry. Later, he moved to Goldman Sachs where he worked as Co-Head Trading, Mortgage-Backed Securities; and Bear Stearns & Co as Co-Head Emerging Markets Trading from 1992 to 1995.
After that, he founded Madison Park Advisors, a financial service advisory and consulting firm specialising in hedge fund and private equity investment – located in New Jersey, U.S.A. He was also Managing Director of Shoreline Group from 2001 – 2006; and served as an economic adviser to former Vice President Atiku Abubakar.
The Road to AMCON
The Asset Management Corporation of Nigeria was set up in 2010 following the Central Bank of Nigeria’s banking sector intervention, with the objectives of buying up non-performing loans from the banks, recapitalising them and finding buyers to run them transparently.
With his verifiable body of work in investment banking and the financial services sector; exposure, experience, and education; not forgetting his high level of achievements and accomplishments in the global financial industry. It beggared no surprise or shock that he was spotlighted as the man to lead the agency from inception and help it achieve its major objective to be a key stabilising and re-vitalising tool to revive the financial system by efficiently resolving the non-performing loan assets of Nigerian banks.
In 2010, Chike-Obi was appointed the first MD/CEO of AMCON by former President Goodluck Jonathan.
Achievements at AMCON
During his five-year tenure at AMCON, Chike-Obi stuck to the corporation’s three cardinal objectives: acquiring the toxic loans, managing them, and disposing of the acquired assets at a profit.
He also succeeded in setting the national tone for fiscal responsibility, accountability, and efficiency and credited with ensuring that the banking crisis was resolved in a commendable manner with the lowest possible loss of depositors’ money and at no cost to the national treasury.
Indeed, the laudable achievements of AMCON and the stabilisation of the banking sector could be largely credited to the careful consideration and steady implementation of its mandate by Chike-Obi.
He stated, “AMCON was set up to stabilise, rather than bail out the financial system. There are four major stakeholders in each bank: the shareholders, the management, the staff, and the depositors. Those bailed out were the depositors and the staff. The depositors got all of their money back, and most of the staff were retained.
“Management was completely wiped out, so they were not bailed out, and all of the existing management was removed. The shareholders lost, in many cases, over 90 percent of their investment, and so they were not bailed out. They were left with a nominal amount.”
Under Chike-Obi, banks were fully capitalised up to regulatory standards, and AMCON has ensured that the processes of doing all of these were at the minimum possible cost. That requires maximising recoveries, minimising expenses and maximising disposal of assets acquired.
AMCON has restructured over 50 per cent of NPLs it got in terms of value, with the implied recovery rate of the restructured loans at over 100 per cent.
Speaking of one of his success stories in the corporation, he said, “There were three banks that were bridged in 2011, although it was never part of the plan to bridge those banks when AMCON came into existence. Even though we had a mandate to recapitalise institutions, we never expected recapitalising to 100 per cent.
“Those three banks came about because they could not find any buyers at the time, and we knew that we had to divest as soon as was practical, then stabilise and recapitalise the bank; doing so made it divestible.
We thought that we would recover 20 per cent of our investment in those banks, but we ended up recovering close to 30 per cent, so we did better than we expected.”
Exceeding expectations remains one of the strengths of Chike-Obi. After his tenure at AMCON in 2015, he returned to Alpha African Advisory Limited. This financial advisory firm provides a range of first-in-class service offerings to support clients in achieving their desired objectives, as executive chairman. That was in 2015.
Unbeknownst to him, he would be tapped to join Fidelity Bank to help it achieve its set objectives. Dr. Patrick Modilim, a senior partner at Patrick Modilim and Co, a financial, business and management consulting services provider, described Chike-Obi as a good choice for the job.
His belief is based on Chike-Obi’s track record, especially his ability to manage bad loans at AMCON successfully, an ingenuity he expects him to replicate in his new office.
He said, “Managing bad loans is the most difficult aspect of banking. Anybody that can do that successfully is a very good hand. So I expect him to replicate that kind of ingenuity in heading the board of Fidelity Bank. The bank should perform better than it is doing having started operation even before some of the leading tier 1 banking brands in the country today.”
No comments :
Post a Comment