Experts Advocate PR Solutions to Banks’ Image Crisis

The banks used to have such large images they were seen as the money machines of the economy. This reflected in their dominance of almost every aspect of the economy including real estate, maritime, oil and gas, the stock market and asset management, just to name a few. But all the glitter suddenly seemed to disappear, courtesy of a reform programme that has unveiled the sham foundations of some of the banks. In a desperate bid to re-launch their battered image, some rescued banks have embarked on deliberate public relations campaigns to get Nigerians to trust them again. Joseph Ekeng reports.

A few years ago, it was the fashionable to buy bank shares. The bank stocks were particularly very attractive for their impressive returns. People sold priced assets to obtain facilities to partake in the largesse, while others invested their retirement benefits in hopes of quick returns. Outside the stock market, banks flaunted massive wealth – paying fantastic salaries, putting up posh edifices and running lavish advert/promotional campaigns.
Bank employees drove the latest cars and lived like movies stars. The 2004 consolidations had jerked bank’s assets base, creating so much liquidity in the financial system that it seemed bank chiefs were practically overwhelmed. Banking became synonymous with wealth. Femi Adeniran, Head Corporate Affairs, GTBank recalls that “there was too much money in the system such that the banks no longer exercised prudence.”
But the fiscal squeeze that came with the global economic meltdown soon swept away the gains of the consolidation. The banks managed to keep the crisis from the public and continued flaunting their opulence, even though they were sinking. The deceit was exposed when Lamido Sanusi Lamido, on assumption of office as Central Bank Governor, blew the lid off, kicking out eight top bank CEOs and their executive management.
The eight banks affected are Intercontinental Bank, Oceanic Bank International, Finbank, Afribank Nigeria, Equitorial Trust Bank, Bank PHB, Spring Bank and Union Bank of Nigeria . Sequel to the shoddy revelations that trail the reforms, the reputation of banks as a safe haven for public money has been badly damaged. Many customers and shareholders remain appalled at the extent of recklessness attributed to the sacked bank chiefs. Despite assurances by government and the CBN that the banks are safe following the fresh injection of funds, customers remain skeptical.
When Transparency International published its Corruption Index for 2008 last September, it ranked Nigeria the 121st most corrupt country in the world out of 180 countries rated blaming the countries fate on corruption in Nigerian banks. The subsequent media bashings and publications of damning cases of fraud and deceit further tarnished the reputation of the banks. But while the reforms have brought some level of sanity into the system, depositors are still wary of the health of the rescued banks, particularly as more than a trillion naira was posted as losses in the balance sheets of the affected banks declared last year. Analysts express shock at the decline of Union Bank for instance, hitherto considered a conservative bank. So the natural respect the bank commanded before has been largely eroded.
So, while the well lubricated PR machines of the banks portrayed them as public friendly, the revelations brought about by Sanusi’s reforms seem to have proved otherwise. Analysts note that the outcome of the reforms exposed the banks as exploitative, provoking unprecedented bad press and poor public perception of the financial institutions.
With the damage, analysts are suggesting many ways to combat the problems now staring the banks in the face. Some opine that the change has brought in a new reality in the system and the banks must reposition to meet up with the new realities in the industry. Vincent Moreno, the Geographic Unit Managing Director for Spain at Accenture, points out that “the banks need to restructure internally and lay structures for operational efficiency.” He insists that banks have to “redefine their boundaries and decide whether to remain in the regional market or remain a local player.”
Moreno’s admonition is coming against the backdrop of the rush by some Nigerian banks to open off-shore branches even when their operations in Nigeria remain far from efficient. In the same vein, Toluwaleke Adenmosun, Head of Financial Services at Accenture, agrees that banks have to be more focused. According to her, “the efforts they have made at cutting costs have to be sustained over the long term. The challenge will be to balance tactical approaches and long term measures at system efficiency.” Perhaps her most instructive admonition is for the banks to be more flexible in their cost behaviour.
Indeed, many of the banks have already begun making changes especially the bailed out ones who have carried out far-reaching purges that resulted in thousands of job losses. M2 investigations reveal that many of the banks have employed staff with risk management background and are focusing on retail businesses that can quickly add value. They are also renegotiating public sector liabilities to reduce costs.
While these changes continue within the walls of the banks, not much has been done in terms of effectively communicating them to the public. That is why most Nigerians are still wary of the state of health of the bailed out banks. Experts have stressed the need for banks to take reputation management more seriously. Muyiwa Moyela, a PR Consultant, while applauding the level of restructuring going on in the system, noted that the reorganization is not far-reaching enough because it has left out the critical unit of the banks which has the responsibility of communicating the changes and carrying the public along.
Moyela’s concerns seem hinged on the fact that some of the newly appointed managing directors appear to be displaying a lack of understanding of the strategic importance of PR. M2 investigations show that in Bank PHB, there is a disconnect between the corporate affairs department and the management. A source recently told M2 that Cyril Chukwuma the new Managing Director, since his appointment, runs the bank in a manner suggesting that he regards the image building and management department as less important.
The source points out that many of the proposals from the department remain ignored by Chukwuma. Even the unit’s annual budget has been ridiculously trimmed. The CEO is also nonchalant about reputation management, thereby constituting himself into a source of image crisis for the bank. A case in hand is the way he recently pocketed $120, 000 as vacation allowance barely three months after his appointment. Critics say his action, coming shortly after the bank declared huge losses and is struggling to survive, further undermines any chance of early stability and erodes public confidence.
Indeed some other banks realize the need to properly manage their image and have reached out to PR companies for help. A case in point is Skye bank, where the management seems to be sparing no cost to ensure proper reputation management. Even in the midst of crisis, the bank has managed to keep out of bad press.
While its colleagues were roundly criticized for the mass sacks that bedevilled the sector recently, a source within the bank told M2 that Skye Bank pro-actively reached out to the media to explain its reasons, before engaging on in-house cleansing. So while UBA, First Bank, Oceanic Bank, Intercontinental Bank, Diamond Bank and others got bad press, Skye Bank remained unscathed for the same action.
Moyela hails such moves as appropriate but insists that more attention should paid to improving the lot of the PR departments of banks and properly equipping them to discharge their duties. Maintaining that good PR is not about lies, he counsels that “banks should give out real stories about what is happening inside their organizations,” charging the PR departments to be more proactive than before.
Some analysts believe that in trying to get the public to understand what is going on in the banks, the information managers of the institutions must communicate with the media on a daily basis. At this point in time, analysts also insists that banks, which hitherto used to be the biggest advert spenders, should shift focus from advert and focus on PR. “Ads give you image and recognition. What PR does is give you respect and reputation,” Moleya explains. Another PR practitioner, Tayo Olatoye, an Associate Analyst at the Quadrant Co, notes that for this to be achieved there should be constant interaction between bank PR agents and major stakeholders. He is disgusted at the usual practice whereby banks secure front page pictures for their CEOs. “That is not PR,” he insists. He wants to see Nigerian banks investing in human capital development for their corporate affairs requirements as a way to effectively position them to communicate as financial brands.