Publications detailing the review of business processes, technology and people towards competitive advantage attainment in Nigeria.

1. ...advancing business
Enterprations
Weekly
Strategy
Recession
How Banks are
playing strategic choice
game
Nigerian

2. 2
of 7.3 percent.Union Bank of Nigeria Plc also boost profitre we in fact in recession? Nigerians and corporate
from N9.8bn in Q3 2016 to N12.4bn in the same periodestablishments are still struggling to find right
2016.answers to this question. Truly, Nigeria is inAcritical recession, first ever after 1994 financial crisis of MixedstrategygameLate Sanni Abach’s regime. People and businesses started
feeling its impacts when it
is practically impossible to
get foreign currency
(especially dollar) for
i m p o r t a t i o n o f
consumable goods and
m a t e r i a l s f o r
manufacturing finished
products.
C o m m e r c i a l
banks as point of call for
businesses and citizens
when there is a need for
financial activity feel the
impact greatly considering
their critical roles in
stabilizing businesses and
Nigerians. The impacts
range from high non-
performing loan rate to
sharp decline in profits for
the 2015 financial year and
the first quarter of 2016.
Almost all the banks have been playing mixed strategyAccording to the industry experts, the impacts are the off-
game since the recession begun in 2016. With eachshoot of the government's decisions and policies on certain
weighing maximum and minimum benefits of strategyfinancial instruments. These include removal of public
being take. However, in our quest of understanding howsector funds via the Treasury Single Account (TSA),
the game is being played we identified non-cooperativeremoval of COT, the absence or curtailing of Forex
and cooperative game categories. With the non-transactions and declining income from loans/credits,
cooperative game, each bank makes her own decisionassociated with borrowers' failure to repay loan within the
independently. The banks do not discuss which strategiesstipulatedtime.
they will use beforehand, so each bank must thinkTo survive the recession without necessary altering
rationally and choose her strategy based on own besttheir corporate strategies and policies, the old and new
interest. As explained earlier, salary cut, downsizing,generation commercial banks are now playing varied
operating cost reduction, partnering with the governmentstrategic choice games. Late 2016, some of the banks
and businesses remain the most adopted strategies by theclosed unprofitable branches, especially those situated at
banks. These strategies are developed and adopted basedthe hinterland across the country, laying off workers and
on different available information categories perfect andreducing salary, and reduction in lending activities.
imperfect information. All the banks are assumed to haveOutcomes of these strategies depend on which decisions
perfect knowledge of rationale for salary reduction,aremadebyeachplayer.
downsizing, operating cost reduction and partneringIn 2016, a national newspaper reported thatTen out
businesses while few have imperfect knowledge onof 15 quoted banks on the Nigerian Stock Exchange
partnering with the government. This indicates that theysubmitted their unaudited results as of September 2016
are skeptical about what would be the outcomes of havingwhere five out of them recorded increases in both their
alliance with the government. Available data sourced andprofit before tax and after tax.According to the newspaper,
analysed to understand the trend of the game shows thatthe huge profits was as a major boost from the foreign
First Bank is partnering with businesses on 10 points ratingexchange (FX) revaluation gains. The five banks are
while Stanbic IBTC had 20 points which is the highest,GTBank, Zenith Bank, Access Bank, UBA and Union
leading Guaranty Trust Bank, Diamond Bank, FidelityBank. GTBank Plc recorded the highest gain of
Bank and United Bank for Africa, that are on 5 pointsN140.84bn PBTfrom N92.06 in Q3 2015, an increase of 53
rating. The analysis also reveals that all the bank had 1percent. Zenith Bank follows with N121.3bn PBT from
point, 2 points and 3 points rating on salary cut, downsizing104.1 in Q3 2015, an increase of 16.6 percent.Access Bank
and operating cost reduction respectively. None of thealso showed a boost in its PBT from N60bn in Q3 2015 to
banks is partnering with the government, meaning that theyN72bn in Q3 2016 UBA also recorded increase in PBT
areonzeropointrating.from N57.3bn in Q3 2015 to N61.5bn in 2016 an increase
February 2017 Enterprations Weekly Strategy

3. StrategicInsights
Based on the analysis, it could be seen that commercial banks are not engage in strategic alliance with the government
towards her (government) efforts in taking the country out of the recession. This serves no good to the citizens and other
businesses. In line with projection, having Nigeria out of the recession by the end of first quarter in 2017 could only be
realizedwhenthebanksdeploytheirstrategicfinancialtoolsandservicestothecriticalareasoftheeconomy.
About Enterprations
We provide a platform for working class professionals and aspiring entrepreneurs to own their business. Our
focus include;
Providing start-up strategy for different SMEs in Nigeria and Africa.
Tactical measuring and evaluation of business at initial, maturity and decline stage.
Reviewing of business's personnel, marketing and training components for greater output and profitability at
different stages.
Helping aspiring entrepreneurs with feasible business ideas and a workable business plan in the areas of
comprehensive business training programmes, networking activities and technology commercialization.
F15, Lagos City Mall, Onikan, Lagos State
www.enterprations.com
info@enterprations.com
+2348141374490
Contact
3 February 2017 Enterprations Weekly Strategy