HOW ZENITH BANK STARTED

HOW ZENITH BANK STARTED

Zenith Bank Plc as at December 2021 is the most valued bank in Nigeria at N810.030 billion. Financial experts expects this to remain so for at least another 5 years. But it never looked as if they will get to this height when Jim Ovia started the bank in 1990. But 3 decades after Zenith Bank is also one of the most profitable banks in Nigeria. And going by shareholders fund, Zenith Bank remains the largest bank in Nigeria.

ABOUT THE FOUNDER OF ZENITH BANK NIGERIA PLC

It is a common knowledge that Jim Ovia is the founder of Zenith Bank Plc in Nigeria. His banking colleagues regard him as one of the founders of Africa’s modern banking system. In fact Forbes call him the godfather of Nigeria banking system. In his book “Africa Rise and Shine”, Jim Ovia tells his story of moving from a humble background to starting Zenith Bank with $4 million in shareholders funds. And growing the business to more than $16 billion in assets.

But not many is aware of that humble part of his story and journey to greatness.

Background

Jim Ovia is a native of Agbor, Delta State, Nigeria. He was born on November 4, 1951. But he was just four years old, when his father suffered a massive heart attack and died several weeks later due to inadequate medical facilities. After the burial Jim’s mother set up her own small trading business to take care of her children.

Jim had an elder brother who was almost twenty years his senior. The guy was working in Lagos as at then and according to Jim he would send part of his wages home each month to help Jim’s my school expenses.

Jim Ovia never allowed his background nor the early death of his father to limit him. He pursued he dreams with full determination and today he is not only the founder of Zenith Bank ( the largest bank in Nigeria) and also operating in 5 other countries but also worth an estimated one billion dollars.

Education

He attended Ika Grammar School, Bojiboji-Owa for his secondary education, before going to Lagos to join his elder brother. He didn’t immediately gain admission into the university after his secondary education. Instead Jim started his banking career in 1973 as a clerk at Union Bank, (formerly Barclays Bank).

He was working at the branch at Oba Akran way, Ikeja. He worked for 3 years as a bank clerk before moving to USA for his tertiary education.He obtained his B.sc in Business Administration in Southern University, Louisiana in 1977. And thereafter his M.sc in Business Administration from University of Louisiana in 1979. He is also an alumnus of Lagos Business School.

While growing up, young Jim Ovia always pondered about the career path to choose. Fortunately he had an uncle that could advise him. The uncle encouraged him to study business administration which he did.

An eye for the future

While studying for a degree in business administration, Jim Ovia developed a keen interest in computer science and information technology. He was so serious to the point that he decided to incorporate it into his program.

His uncle was initially against it, believing that it would become a distraction to him. More so, technology was still considered with some skepticism at the time. And not many thought it would amount to the much it is today. But Jim been a man of foresight held on to it.

Even then, he could see that technology would in the coming decades define the way business is done. As student of business administration, he thought it wise to have advance knowledge of technology than being caught unawares in the future.

To further demonstrate how much interest he had for computer technology he decided to pick up a part- time job as computer operator at the defunct Baton Rouge Bank and Trust Company in 1997.

Jim Ovia -Founder of Zenith Bank
Jim Ovia -Founder of Zenith Bank
Beginning of his professional career

After his programme in the US he returned to Nigeria.  He rejoined Union Bank of Nigeria for his National Youth Service Corps. And was posted to the branch at 121 Broadstreet, Victoria Island Lagos.

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After his service year, Ovia joined International Merchant Bank (IMB) in 1980, working his way up from the position of financial analyst to senior manager in 1987.

Jim joined Merchant Bank of Africa in 1987 as Head of Corporate Finance Department. Within his time there from 1987 to 1990 he set up the Lion Bank.

HOW ZENITH BANK STARTED IN NIGERIA 

As at early 1980s the exclusive right to start a commercial bank in Nigeria was held by foreign global financial institutions like Barclays Bank which later became Union Bank. A few others were held by either Federal or State government. No single Nigerian could own a bank.

But all that changed in the late 80s when the deregulation of the banking sector during the military administration of General Ibrahim Babangida tool place.

Jim Ovia was among the first Nigerians to quickly apply for a bankinglicense. He got some investors that made it possible for him to raise the 20 million naira he used to start then.

Fortunately Jim Ovia he could either afford or improvise for all the necessary requirements. Those requirements includes:

1. Having a Chief Executive with at least 10 years banking experience,

2. Raising the required capital

3. Setting up the required physical structure

4. Setting up the required governance structure.

Obviously Jim didn’t have enough money to build his own physical structure. And as at 1990 there were not many buildings specifically designed for commercial or corporate purposes even in Lagos. So Zenith Bank had to start at a residential building which they shared with a young couple on one wing, with the bank on the other wing.

As Jim would later recall, they converted the garage to a customer service unit, and then made teller points out of the rooms, to create the first branch at Ajose Adeogun street, Victoria Island, Lagos. In time, the couple could no longer cope with the nuisance that came with being neighbours to a bank, and they moved out, giving the bank more space to operate.

Why is Zenith Bank Colour Red?

Among other things, the bank had to choose its colours and logo before commencing operations. Jim Ovia went for red but it didn’t sit well with many.

Zenith Bank
Zenith Bank

“Some of my colleagues said we can’t use red for a bank because it signifies danger, or war. Many other banks at the time were using cooler colours like blue. But no bank ever used red before us. But I insisted because for me red signifies power,” he would later explain.

In addition to his personal conviction about the significance of red, he had also noticed that most developed countries and world powers, like USA, UK, Japan had red as one of the colours on their national flags. So he insisted that there must be something right about it. And that was how Zenith Bank Nigeria came about their famous red colour.

ZENITH BANK NIGERIA’S COMPETITIVE ADVANTAGE- TECHNOLOGY 

As the years went by, some banks which started off at the same time were forced to merge or sell out. But Zenith Bank Nigeria stayed strong. Ovia’s peculiar interest in technology was a strong factor in favour of the bank, as he was way ahead of the others in that regard.

His early interest in technology was the reason Zenith Bank Nigeria became the first Nigerian company to have a functional website in 1995. And the bank was able to smoothly migrate its operations from the analogue times to a technological era.

When Jim Ovia along other investors co-founded Zenith Bank in 1990, banking in Nigeria was at the rudimentary level. Operations and services were manually driven, and as a result customers were subjected to delays and stress.

Speaking of these times, Ovia said, “When we started Zenith in 1990, it was extremely difficult as the necessary resources and infrastructure to do business, particularly banking, were not in place. There were no ATMs, no mobile phones and ICT was a rarely known concept in the business space,” he says.

Notwithstanding this barriers,  Jim decided to make Zenith Bank an information technology driven bank in Nigeria.  This is reflected in the bank’s tagline which is, “People Technology and Service”.

As a result,  Zenith Bank, under Jim Ovia’s leadership  blazed the trail in digital banking in Nigeria. The bank was scoring firsts upon firsts in the deployment of Information and Communication Technology (ICT) infrastructure to create innovative products that meet the needs of its teeming customers. The bank is obviously a leader in the deployment of various channels of banking technology. And the Zenith brand has become synonymous with the deployment of state-of-the-art technologies in banking.

GOING PUBLIC

14 years after Zenith Bank was founded in nigeia the bank has grown in all aspect. The customer base was increasing. Public trust and confidence was on all-time high. Jim Ovia noticed that and immediately leveraged on that to lead the Zenith Bank through an Initial Public Offering (IPO). That offer was oversubscribed. And it helped the bank survived the consolidation exercise of 2004.

EXPANSION TO OTHER COUNTRIES

This was followed massive branch expansion across the country, and establishment of subsidiaries in other African countries. Presently Zenith Bank Plc has over 500 branches in Nigeria with subsidiaries in Ghana, Sierra Leone Gambia, United Kingdom, and Peoples Republic of China.

RECOGNITION AND AWARDS FOR ZENITH BANK

The contributions and influence of Zenith Bank in the Nigerian banking landscape is reflected in the strings of awards and recognition from local and international bodies.

The Banker Magazine, a publication of the Financial Times of London in a 2013 survey, rates Zenith as the Biggest bank in Nigeria by tier-1 capital.

  • Forbes & CNBC Africa ranks Zenith bank as the 3rd biggest company in West Africa;
  • Capital Finance International (CFI) adjudged the bank the Best Commercial Bank in Africa.
  • World Finance voted the bank as the Best Nigerian Bank in Corporate Governance.
  • KPMG rated Zenith bank as the Best Customer-Focused Bank in Nigeria.
  • In 2012, Zenith Bank was recognized as one of the 30 Outstanding Global Brands making sustainable impact on their operating environment. This recognition was prelude to the United Nations Development Programme’s (UNDP) Conference on Sustainable Development (Rio+20) which held in Rio de Janeiro, Brazil in June 2012.
  • In 2007, the bank bagged the African Bank of the Year; awarded by African Investor Magazine,
  • Quoted Company of the Year; awarded by Nigerian Stock Exchange and
  • Socially Responsible Bank of the Year awarded by African Banker Magazine.
  • For three consecutive years, Zenith won the Web-Jurist award conducted by the website rating arm of Phillips Consulting.

TIMELINE OF ZENITH BANK GROWTH AND DEVELOPMENT 

  • Founded-  May, 1990
  • Started Operations – July 1990
  • Became first Nigerian bank to have a functional website – 1995
  • Became a Public Limited Company – June, 2004
  • Fitch Credit Rating Agency rated Zenith credit as AA – Jul,y 2004
  • Listed in Nigeria Stock Exchange (NSE) – October, 2004
  • Incorporated Zenith Bank (Ghana) Limited – April, 2005
  • Started Operation in Sierra Leone – September 2008
  • Incorporated Zenith Bank (Gambia) – October, 2008
  • Became the first Nigerian bank in 25 years to be licensed by the UK Financial Services Authority (FSA), giving rise to Zenith Bank UK Limited – April 2007
  • Listed on London Stock Exchange – 2013

ROLLCALL OF MDs OF ZENITH BANK FROM INCEPTION TILL DATE

  • Jim Ovia 1990 – 2010
  • Godwin Emefiele 2010 – 2014
  • Peter Amangbo 2014 – 2019
  • Ebenezer Onyeagwu 2019 – date

ADVICE TO EMERGING ENTREPRENEURS 

As one of the leading entrepreneurs and self made billionaires in Nigeria Jim Ovia has this advice for emerging Nigeria entrepreneurs:

‘First, I will tell them not to allow whatever challenges they might be facing presently to dissuade them’. Just as he narrated how he founded a bank with N20 million in 1990, despite the uncertain business environment during the military era.

‘Secondly, I want to encourage them to be responsive to opportunities lurking around’. Jim is of the opinion that Africa is a land of so much opportunities. He believes that if the youth look around they will see opportunities better than Zenith Bank Nigeria Plc. According to Ovia, just as he saw opportunities in the banking sector at the time Zenith Bank was set up, there were other opportunities that some other persons had in other industries. “It was a matter of time and chance,” he insisted.
“Time and chance at that time because at that time, many people were scared to invest in Nigeria. We are talking about late 80s and to be precise, in 1990. Many international investors were scared to invest in Nigeria then, simply because we were under military rule. So, you could imagine the tremendous opportunities that existed in Nigeria and some other African countries”.

And for foreign investors…

Jim Ovia also has some piece of advice for foreign investors wishing to invest in Africa.

He advised them not to be deterred by the negative news and commentaries about Africa. He explained: “We started the business with N20 million at an exchange rate of N5 to a dollar. So, we actually started the business with $4 million in 1990, and it now blossoms.
“We now have a total asset base of $16 billion. If you look at the arithmetic, there have been over 1000 per cent growth. You can’t get that anywhere. Even in the best economies in the world, you are not going to get that type of benefit.
“So, that is the kind of risk entrepreneurs, businesses or international investors must take in Nigeria or any other African countries. And I assure you they will reap tremendously in terms of quantum growth in their business.”

WHERE IS ZENITH BANK TODAY?

There is no argument – Zenith Bank Plc is at the zenith of Nigerian banking today. When it released her 2021 full-year audited financial statement it reported a profit after tax of 244.5 billion naira. That is the highest on record. And it reflects a 6.07% increase year on year.

Zenith Bank Nigeria Plc rose from $4 million in shareholders funds in 1990 and in less than 3 decades grew to more than $16 billion in assets as at 2016.

Zenith Bank is Nigeria’s most profitable bank and the largest listed financial services group on the Nigerian Stock Exchange.

Today Zenith Bank is rated among the top 10 biggest financial institutions in Africa.

It is Nigeria’s biggest bank by tier -1 capital.

It currently has over 500 branches and over 7,000 staff.

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