Basic HTML Version
8 | The Lion King
Ask the Executive
A
seasoned financial analyst and Chartered Accountant, with extensive experience in audit, finan-
cial control and reporting, mergers and acquisitions, transaction support, strategy, business risk and
decision support analysis; Ugochukwu has sound training in financial modeling, investment analysis,
corporate finance & restructuring, project and general management.
He joined legacy Standard Trust Bank in October 2004 and was engaged in the formulation of strategies
as well as a turnaround plan for Continental Trust Bank. He led the team that conducted pre-merger due
diligence on UBA Plc then. In the new UBA Group, he continued in strategy and performance manage-
ment; engaged in conducting due diligence and sometimes valuations on acquisition targets in Nigeria
and the rest of Africa; prepared competitive bidding documents and designed the integration procedures
for acquired entities. He also served as Group Chief Compliance Officer, during which time he developed
and managed the Group’s compliance program.
In this exclusive interview, Ugochukwu Nwaghodoh who is a Fellow of the Institute of Chartered Account-
ants of Nigeria (FCA), a Fellow of the Institute of Credit Administration of Nigeria (FICA) and an Honorary
Senior Member of the Chartered Institute of Bankers of Nigeria (HCIB) tells us about his life as the Group
Chief Finance Officer and also his thoughts on the future of banking in Nigeria.
Please give us an insight into the
work of the Group Chief Finance
Officer.
The job of a CFO encompasses
those activities and functions
aimed at helping the firm achieve
its financial goals. This can be
summed up as doing things that
increase cash inflows and reduce
cash outflows. The foregoing
implies that the CFO contributes
to strategy, risk management,
business development, relation-
ship management, capital and
balance sheet management, and
also independently reports the
performance and state of affairs
of the company to all stakehold-
ers.
To break it down a little more, I
will say the CFO is responsible for
ensuring that the funding needs
of the firm are met in a balanced
manner at all times, and that such
funds are deployed responsibly
and profitably. The CFO is also
responsible for preparing, analyz-
ing and reporting the financial
statements of the Group in a
timely manner and in accordance
with prescribed reporting and
regulatory standards. In achieving
financial goals, the CFO translates
both corporate and competitive
strategy into action by driving
corporate and individual perfor-
mance to achieve set strategic
objectives. He also ensures a good
tax position is maintained through
an efficient tax strategy and plan-
ning.
Furthermore, the CFO drives the
process of achieving an optimal
balance sheet by ensuring an ef-
ficient mix of assets and liabilities is
maintained at all times (optimal li-
quidity management) with the aim
of enhancing earning on assets,
reducing funding costs and striking
a balanced capital position that
will enable the bank carry on its
business in the face of dynamic
regulatory and operating environ-
ments. The CFO’s responsibility
extends to managing the bank’s
relationship with its key stakehold-
ers, including regulators, investors,
research analysts, rating agencies,
financial partners and external
auditors. This is one crucial aspect
of the role, as these stakeholders
are so important and influential
that there could be significant
franchise risk associated with mis-
managing these relationships.
To summarize it in the words of one
of my predecessors “the CFO is
the pivotal pillar that propels the
institution towards its goals”.
In today’s banking landscape,
what are the biggest challenges
you face as GCFO?
There are quite a few challenges
we face in today’s finance organi-
zations. One of the obvious ones is
striking the right balance between
a profitable business opportunity
and risks associated with it. Some-
times, you wonder why a transac-
tion that seemed so good in the
first instance suddenly turns out
bad. Another challenge is related
to people. Finance is a specialized
field and there are very few tasks
for the unskilled; accordingly, I
continue to seek ways of develop-
ing and motivating finance staff to
deliver the best possible value, this
is really tough to achieve, I must
say. As with any CFO, rationing
scarce resources to extract the
maximum value for shareholders,
keeps me on my toes.
Talking about profitability, how do
you envision the banking sector
reforms with operators divesting
from non-core banking busi-
nesses? How will this affect UBA’s
capacity to make profits?
We need to understand why the
Central Bank of Nigeria (CBN)
came up with this directive. The
apex regulator was seeking to
address the weaknesses identified
with the operation of non-core
banking businesses by some op-
erators in the past. This move will
strengthen the corporate gov-
ernance and risk management
structures in Nigerian Banks. Also, it
affords the CBN good supervisory
coverage of all the activities of the
banks they regulate.
Under the new structure, UBA will
focus on its core business and area
of capability, which is commercial
banking. We do not expect this to
materially impact on our earnings
and profitability. I say this because
the non-core banking businesses
which we are spinning off contrib-
ute less than 5% to Group earn-
ings. Therefore, UBA Plc’s profitabil-
ity as a pure breed commercial
bank will not be whittled down by
the spinoff of non-core banking
businesses.
Is it true that banks find it more
profitable to put their money in
government bonds and treasury