In an industry where scale often determines survival, Tatum Bank is pursuing a different path. Rather than competing head-on with Nigeria’s largest lenders for mass-market customers, the one-year-old regional bank is building what it repeatedly describes as a “defensible” banking model, one anchored on digital delivery, disciplined lending, strong governance, and deep relationships with SMEs, corporates, and sub-national institutions.
The strategy appears to be gaining traction. Having achieved profitability in its first year of operations and strengthened its capital base, the bank is now entering a new phase focused on expanding its loan book, deepening transaction flows within key business ecosystems, and proving that rapid growth can coexist with prudent risk management.
In this exclusive interview, Niyi Adeseun, managing director of Tatum Bank, discusses the market gap the bank identified, its plans for growth over the next three years, how it intends to compete with larger banks and fintechs, and why maintaining credit discipline remains central to its ambitions. BusinessDay’s Chinwe Michael brings excerpts.
Many new banks struggle to establish a clear identity. What market gap did Tatum Bank identify, and has the first year validated that thesis?
Our central thesis was that SMEs and mid-sized corporates wanted faster, more digital, and less relationship-dependent banking services.
The first year has largely validated that assumption.
We have established strategic relationships with several SME operators and sub-national entities, and those relationships have begun generating meaningful transaction flows.
The larger question now is scalability. Moving from a handful of anchor customers to over 500+ active SME relationships while maintaining service quality is a very different challenge.
Likewise, maintaining credit quality as the loan book expands 2-3x by year three will be a major test. Years two and three will therefore be focused on scaling responsibly while preserving operational excellence.
Is Tatum Bank’s long-term ambition purely domestic, or are you already considering regional and international expansion, particularly within Africa’s cross-border payments and trade finance ecosystem?
Our priority for the next two to three years is proving that the domestic model works at scale.
If we successfully grow assets to between N250 billion and N450 billion while maintaining strong asset quality, then an upgrade to a national banking licence and selective African partnerships may become realistic possibilities within four to five years.
For now, our ambition is focused squarely on building market share within Nigeria.
Tatum Bank has completed the N50 billion recapitalisation threshold within just a year of launching operations. What gave investors the confidence to back a new entrant in Nigeria’s highly competitive banking sector at this scale?
Investor confidence was built around four key pillars: governance, regulatory compliance, strategic focus, and leadership credibility.
From inception, we positioned Tatum Bank as a governance-led institution with strong compliance structures and a clear strategic focus on digital banking, SME financing, and corporate banking. Our board composition also played an important role in strengthening market confidence.
Having a Senior Advocate of Nigeria serving as chairman of the board signalled our commitment to corporate governance and institutional discipline. More importantly, achieving the regulatory capital threshold in less than a year after launching operations in May 2025 demonstrated execution capacity.
Investors wanted evidence that management could not only raise capital but also preserve and deploy it responsibly. Reaching the N50 billion threshold quickly provided that assurance.
It is important to note that most of those funds went to large banks seeking between N200 billion and N500 billion in additional capital.
As a newly established regional bank, we had to convince investors that we would not be squeezed out by larger competitors. We needed to demonstrate that our market niche was defensible, our strategy was differentiated, and our leadership team had the capability to execute.
The speed at which we achieved the capital raise suggests that investors bought into that proposition.
Capital adequacy is one thing, deploying capital effectively is another. How does Tatum Bank plan to utilise the N50 billion fresh capital?
The recapitalisation exercise was ultimately designed to strengthen banks’ ability to support productive sectors of the economy, including agriculture, manufacturing, infrastructure and SMEs.
Our deployment strategy aligns with that broader objective.
We are not pursuing a mass-retail banking model, nor are we planning aggressive nationwide branch expansion. Instead, we are building a digital-first institution focused on SME and corporate lending, supported by strong governance and risk management.
Capital deployment will therefore be concentrated in four major areas.
The first is lending growth, particularly to SMEs and corporate customers operating within sectors where we possess strong underwriting capabilities.
The second is investment in digital infrastructure to support customer acquisition, transaction processing, and service delivery.
The third is strengthening risk management, compliance systems, and operational resilience.
The fourth is measured regional expansion within our core operating markets in South-West, South-South, and North-West Nigeria.