HIGH RISK

Nigeria 2018 | FINANCE | COLUMN

TBY talks to Vivien Shobo, CEO, Agusto&Co, on the sector.

Vivien Shobo

What have been some of your major achievements?

We started in 1992 as a research company, much of whose focus was on the country's industry and companies within it. At the time, there were 120 banks in Nigeria, each with varying degrees of risk. The market needed a way of differentiating risk in the market because many of the banks carried high risk. We thus created a market rating of all 120 banks. We did that for five years in the mid-1990s when there was a high level of distress in the banking system, and several banks' with high-risk ratings had gone into distress. As a result, the market started to take our opinion seriously. We converted from non-solicited to solicited ratings, which is what we have been doing ever since, expanding into other sectors such as non-bank financial institutions, sector corporations, insurance companies, and fund managers.

How do you compete with other rating agencies in the market?

Nothing beats local knowledge and having analysts on the ground. We know the people who run these companies and can anticipate things before they show up in the numbers. This gives us a competitive advantage. We understand the implications of certain actions they take long before they are reflected in the numbers.