By Stanley Opara

Thursday, 2 Dec 2010

The Group Managing Director and Chief Executive Officer, Skye Bank Plc, Mr. Kehinde Durosinmi-Etti, has said Nigerian banks should seek moral regeneration through their training programmes, policies and processes.

He said this would restore the virtues that attracted young people to the banking profession in the past, noting that insider abuse, fraud, malfeasance, opulent living, neglect of fiduciary duty, among others, should be identified and punished appropriately.

The Skye Bank boss said this while presenting a paper titled, “Raising the Profile of the Banking Profession: Challenges and the Way Forward,” at the 2010 Investiture of Honorary Senior Members of the Chartered Institute of Bankers of Nigeria in Lagos on Tuesday.

He said the first issue that needed to be addressed was the restoration of professionalism or a return to the basic foundation of the profession, which focused on time-tested values and ethics.

“The banking profession has historically been known for executing and promoting the ideals of accountability, conservatism, prudence and equity. These core values must be instilled in our financial system again,” he said.

Stressing that a direct connection existed between ethical practice and business sustainability, Durosinmi-Etti noted that businesses that cut corners and jettison good corporate governance might acquire momentary gains, but would have their frailties shown over time, which would result in major problems.

He said, “Our documented policies, at business, management and board levels should not remain mere documents; rather, they should actually guide our conducts as custodians of financial resources of depositors, and as financial intermediaries to other customers.”

While the board of directors of banks had the responsibility of ensuring that appropriate corporate governance frameworks were constituted, he said the regulator must take greater responsibility for the enforcement of the relevant codes and rules.

The Skye bank GMD urged banks to continue strengthening their risk management practices, and also enforce internal discipline and institute appropriate saction mechanisms that would discourage professional misconduct.

According to him, banks should not continue to groan under the weight of huge operational costs and complain ceaselessly, while refusing to explore alternative initiatives and collaborations that could reduce cost, enhance efficiency and increase competitiveness.

Investments into platforms such as mobile banking, he said, would enable banks to bring the unbanked population (which unfortunately constituted the majority) into the financial system, adding that players should rely less on traditional brick and mortar structures, but rather enhance their investments in electronic channel (virtual) platforms such as Automated Teller Machines, Point of Sales terminals and mobile banking.

Durosinmi-Etti said one of the major causes of the failure of banks in Nigeria was lack of depth in managing credit risk, adding that with a poor documentation culture, it had been difficult to optimally measure credit risks, especially hidden default risks, in certain transactions.

Source: Punch