BY OYENIYI JAMES

AROMOKEYE

Formally known as Nigerian Intercontinental Merchant Bank Limited,

Intercontinental Bank started as a merchant bank in 1989 and became a

commercial bank in 1999. Its size became bigger when it merged with 3

other banks namely Equity Bank of Nigeria, Gateway Bank and Global

Bank.

The bank was believed to be one of strongest Nigerian banks until year

2009, shortly after there was a change in the leadership of the regulatory body overseeing the activities of all Nigerian banks, The Central Bank of

Nigeria (CBN). The leadership of the apex bank was headed Malam

Lamido Sanusi, a risk management expert who made a swift action of

digging into the books of all the banks in the country through the use of

external auditors. The result of the audit exercise led to a shocking

discovery that of the 24 banks, nine banks including Intercontinental were in critical situation. The Management of Intercontinental were sacked

immediately and new management team were appointed to carry out a

four point agenda that will create an irreversible change to the once respectable Nigerian

Intercontinental Bank was a commercial bank with a hybrid structure; a

functional, product and geographic structure. It has over 300 branches

spread across the country. These branches were geographically

structured in regions (10 regions). Lagos, the commercial nerve of Nigeria

has the international headquarters of the bank with two regions and the

rest of country regarded as “Up-country regions” share the rest eight

region. The bank conducts independent banking businesses in the United

Kingdom, Sierra Leone and Ghana which are regarded as subsidiaries.

It also has subsidiaries that were into specific products such Insurance,

Real estate and Print press.

Structure Cont.

Organizational Culture The cultural aspect of Intercontinental Bank would first be viewed

from three perspectives established by Dr. Bligh (Laureate Education, n.d.).

Artifacts

Believes and Values

Assumptions

1. Artifacts: As commercial bank, Access Bank has a formal environment, with dress code for

every member of staff and by their functions. The bank maintain same building exterior

design in almost all their branches nationwide.

2. Believes and Values: Intercontinental bank was popular for its slogan “Happy Customer

Happy Bank”. This form the basis of how promotions and customer services stories are

viewed. It has a reward based system to its staff and most financial reward given to its staff

are performance based. Value is placed on respect for age differences and cadre. A lower

cadre or aged person is expected to pay respect to older and senior colleagues. They also

have a saying among the management concerning staff development which states “if you

don’t train them, don’t blame them” The bank therefore puts so much importance in staff

development and career progression.

3. Assumptions: Many outsiders see the bank as the highest paying banking institution in the

country and an employer of choice for many young university graduate; a major reason

why recruitment exercise in the bank can be daunting. Because of Chief executive officer

unofficially tendencies towards his Christian religion, many see the bank as a Christian bank.

Change Encountered

After the special audit of all Nigerian banks in late 2009, the Central Bank of Nigeria CBN, which was under a new management, found Intercontinental bank and eight others to be distressed. The Nigerian government made capital injection into the troubled banks while the bank partnered with the CBN to seek new investors so as help the bank engage in businesses. In the course of these events, the existing management of the bank was sacked and new team of management was appointed by the CBN while its functional nature was retained.

Due to panic withdrawals customers and relocations of business by its creditors, the bank started to operate on a lean budget that changed the nature of expenditures of the bank. This resulted in mass sack of bank staff and costing cutting measures were applied in business units of the bank.

Subsequently, in 2011, a “smaller” (in terms of size), local bank called Access Bank emerged the best investor for the bank, as deemed fit by the new management and the CBN. Access Bank bought into 75% of Intercontinental Bank’s stake and therefore a swift takeover of the bank happened almost immediately.

Resistance to Change

The moment the rumors of Access Bank Plc, to be the new owners of Intercontinental Bank Plc was heard, they were panics and insinuations by members of staff bank wide. This reaction is not unconnected to the perceived aggressive goal chasing nature of the acquiring bank. Thereafter when the acquisitions process was completed and the new management of Access Bank took over with detailed programs leading to a merger of both banks.

The fears of Intercontinental Bank staff were heightened when their place in the process was not detailed in the integration program. Earlier, the previous management had promised comfortable future for all but the present reality seemed uncertain. Among the reasons for skepticism was the need for all Intercontinental staff to write a fresh engagement examination in which failure would lead to loss of job. Also, an aggressive bank-wide marketing effort tagged “Operation Just Case” to bring in fresh deposits was assigned to all staff in form of targets. Those who could not meet their individual assigned target against the deadline were sacked. This exercise led to an instant disengagement of 1, 500 employees.

The environment became tensed and resistance to the merger cause began on a strong note than anticipated by the investors. There were widespread lack of commitment and productivity among staff. While some willingly resigned their appointment so as not suffer similar fate experienced by their ousted colleagues, some remained despites their non-commitment. As opined by Okafor, E. E. (2009), it was a way of coping with the dehumanizing nature of their job.

How Resistance Was Tackled For

Change SuccessWhile in operation, a, “Integration Committee” was

instituted and comprised of members of staff from both

Intercontinental and Access Bank. Their main objective

to review the businesses of the bank and where

changes needs to made. At the end, an “agenda” was

established which will ultimately lead to a merger of

both banks.

The growing concern of non-commitment of the staff

led the management to close down some branch

service outlets. At this point, the Human Resources Head

advised all considering resignation to do so quickly. This

was greeted by protest and public outcry by a coalition

of disengaged staff. Among their demand was failure of

Access Bank to pay their entitlements. Though the

closure of branches help the bank from security risks yet

it was not generally an effective strategy to the issue at

hand.

Change Sustenance

After the merger process was hurriedly concluded, in order to institutionalize change, the bank re-introduced “Early Morning Sessions (EMS)”. EMS is a daily 15 minute service review meeting among service staff before banking hours in the morning. Every service failure or success is being discussed in relation to bank’s policy. The bank also made available Standard Operations Procedure (SOP) for all staff functions. It provided a platform for audit of activities. (Beach, L. R, 2006).

Old staff of Access bank took the lead in ensuring new comers buy-in into the culture of the organization. Consequently, measures were taken to ensure compliance with organizations policies and culture pattern. The “mystery shopper” system was also re-introduced with mean penalties for defaulters. Post-merger activities included rebranding and uniformity of Access Bank buildings bank-wide. This provided a comfort for customers and sense of belonging. Earlier, one of their questions was if the new management wanted to run two parallel bank owing to paucity of information at their disposal. There was seamless integration of the products of both banks and their information technology especially customer records.

Generally, aside the exited staff from the defunct Intercontinental Bank and shareholders who lost out in the process, the merger was adjudged the fastest successful merger ever in Nigeria

What Could Have Done Differently

One major achievement of the management of Access Bank was the sense of urgency it created in its workforce. (Bligh, M., Laureate Education, n.d.). This helped in reaching their merger timelines faster than earlier drawn. Another effective measure was that the management team was seen in most branch operations to see the challenges encountered and find immediate solution instead of following procedures and protocols. They led by example in attending to urgent situations witch cushioned the pressure in attending to the needs of already fretful customers.

However good the end of the story was, communication was poorly done before and during the merger process. Carrying stakeholder along in their plans may not have posed any security or legal challenge. The dynamism showed by the new management team is evidence of their aggressive business style.

What the bank could have done differently is to help the staff of defunct bank buy-in into the merger process. Their experience and knowledge of the customer base really counts.

Innovation

Access Bank’s response to the resistance and criticisms from stakeholders

coupled with pace with which the merger process was concluded showed

how innovative the bank is.

It has a corporate mission statement that goes by “Setting standards for

sustainable business practices that unleash the talents of our employees,

deliver superior value to our customers and provide innovative solutions for the

markets and communities we serve.” The mission is in agreement with how the

bank remained in steady growth since the merger.

Another good innovative approach by Access Bank was their ability to adopt

and improve products from Intercontinental Bank. With this, many customers

were able continue business with them.

References1. Afolabi, A. (2014). Hostile take-over: The story of the merger of Intercontinental Bank and Access Bank

Nigeria plc. [Article]. Retrieved from www.slideshare.net/mobile/adetunjiAfolabi/wk7-assgnafolabia1

2. Adebusuyi, A. (2015). Interview on merger and acquisition of Intercontinent Bank Plc. [Verbal conversation].

3. Unknown Author, (2012). Access Bank sacks 1,500 Intercontinental employees, shuts branches. [Article]. Retrieved from http://www.punchng.com/business/access-bank-sacks-1500-intercontinental-employees-shuts-branches-2/

4. Beach, L. R. (2013). Leadership and the Art of Change: A Practical Guide to Organizational Transformation. (Laureate Education Inc., custom ed.). Thousand Oaks, CA: Sage Publications, Inc. p. 113-114.

5. Emejo, J. (2013). Access Bank Explains Acquisition of Intercontinental. [Article]. Retrieved from http://www.thisdaylive.com/articles/access-bank-explains-acquisition-of-intercontinental/159595/

6. Okafor, E. E. (2009). Post-consolidation Challenges and Strategies for Managing Employees’ Resistance to Change in the Banking Sector in Nigeria. [Article]. Retrieved from http://www.krepublishers.com/02-Journals/JSS/JSS-19-0-000-09-Web/JSS-19-2-000-09-Abst-PDF/JSS-19-2-129-2009-694-Okafor-E-E/JSS-19-2-129-2009-694-Okafor-E-E-Tt.pdf

7. Schermerhorn, J. R., Hunt, J. G. & Osborne, R. N. (2008). Strategic Capabilities and Organizational Design: How to Compete in the 21st Century. Organizational Behavior. John Wiley & Sons Inc. pp. 414-439.