For five years, HASSAN USMAN has been steering the affairs of Jaiz Bank Plc, the premier non-interest bank in Nigeria as managing director/CEO. In this interview with BusinessDay’s BASHIR IBRAHIM HASSAN, GM, Northern Operations, Usman explains how the bank sustained and grew profit during the COVID-19 pandemic, while also giving credit to his predecessors. Excerpts:
How did you fare last year during the COVID-19 pandemic, in terms of operations, achievements and challenges?
Last year (2020) was a challenging year for the world and for Nigeria in particular. It was the year we had the impact of COVID-19 play out, with the lockdown and social unrest. We also had ENDSARS, economic and security challenges, which affected the economy of which nobody was exempted.
Nevertheless, we thank God, year 2020 was one of our good years. We had significant growth; our revenue grew almost 40 percent. Our balance sheet also grew significantly, Profit After Tax also grew almost 50 percent over 2019. So, we can say that although challenging, we came out with very good results. We paid dividends as we did in 2019; and overall, all our stakeholders were very happy with what we were able to achieve during that period. We are hoping that 2021 will even be better by God’s grace.
Read Also: Jaiz Bank grows profit by most in six years on higher income
Looking back as the first MD under whose leadership the Bank sustains profit making and paid dividend to shareholders, how do you feel?
We have been making profit since 2014. We started paying dividend last year on top of 2019 performance and we also paid dividend this year on top of 2020 performance.
You are right on payment of dividend. By the grace of God, it was during my period that we started to pay dividend. As a new organisation, it wasn’t possible for the previous CEOs, even with profitability, to start to pay dividend. This is because you need some accretion of your retention to further grow the business. You need to get to a point where you pay the dividend so that the shareholders will be happy. We started with a modest one last year, and this year we paid almost N900 million in dividend. So, if you combine the dividend paid for the two years, it is almost 1.7 billion which is just the beginning by God’s grace.
So much effort had been put in place by previous CEOs, but history has it that it’s under your leadership that dividend were paid and there must be some credits to you.
The credit will go to so many people. First, the shareholders, who for almost 20 years since 2003 committed their hard-earned money – you have to give them credit because without them, the institution will not be set. Then, Mallam Mustapha Bintube, the pioneer CEO, who left an ED position in a running bank to pick the project. He was even being favoured to be MD of the then FSB, but he left that and took over a project, which he ran until 2013. Then Mr. Muhammad Nurul-Islam, the second substantive MD who also came and, worked day and night to make sure that we broke even. It was during his period that we broke even and started to make profit. And, of course, all of this couldn’t have been done by them alone. We have all the staff of the bank – from the driver to the general managers – that have really worked very hard to generate the business that saw us to break even and being able to pay dividend.
Read Also: Jaiz Bank reaffirms commitment to financing MSMEs
There are now other banks that pledge non-interest services, how do you feel in terms of competition?
In Jaiz Bank, we pioneered an industry that was not there; creating the interest and confidence for other people to come in; and we believe that we have done that very well. We have been growing since 2016/2017 at more than 30 percent per annum in terms of our balance sheet.
Our profitability has been growing significantly. If you remember, last year, we won the Most Improved Islamic Bank Award in the world. We welcome more and more participants into this ecosystem. We cannot, alone, satisfy the Nigerian market for Islamic finance. We cannot also achieve sustainability running alone, because the banking system requires an ecosystem of participants and players that compete and collaborate. So, we will compete and collaborate with whoever comes on board. Many more players are welcome, not just one or two.
When only one-player is in an industry, people will believe that the industry does not have prospect or promise. And the general public will be wary about coming in. So, as more licences are given, it’s an indication of more confidence in the system, an indication of better support by regulators; it is also an indication that the system now provides a field for collaboration and healthy competition to provide better services to the general public. We are happy that they are here, because it reinforces our belief that this is a sub-sector that is worth venturing into.
How has this year been so far? Can you tell us some of the targets?
This year has been good. Like I mentioned earlier, we have met all our targets for the half year.
We just published our six months’ financials. On our revenue target, we achieved a growth of 40 percent over the corresponding period of last year. Our PBT also grew by 70 percent over the previous period of last year, and we have met our budget for the half year. We are happy and confident that we will be able to maintain this momentum till the year ends.
What about your Hajj Saving Schemes? With no Hajj this year, did it affect you?
The Hajj Saving Scheme is not a product for one year, but a strategic product to make Hajj more efficient and also enable many aspiring pilgrims to have a scheme that will help them do Hajj without tears. And they need one to do so in an orderly manner without crashing either their businesses or their savings. They can continue to maintain a healthy activity in their business, and at the same time, gradually save towards attaining their objective for Hajj. So, yes, we are sad that we didn’t go for Hajj this year, but this is what the COVID situation has brought. The Saudis were being careful and I think the first thing is to look after the health of people, which is also important. We wished some measures were taken to allow it, if not the usual100,000 Nigerians, at least allowing half to go for Hajj, but it didn’t happen.
We cannot, alone, satisfy the Nigerian market for Islamic finance. We cannot also achieve sustainability running alone, because the banking system requires an ecosystem of participants and players that compete
We pray that Hajj will be a reality next year. We have continued to enroll customers into the Hajj Savings platform.
Can you tell us what this scheme is about?
It is a target-saving scheme like the name suggests. An aspiring pilgrim who wants to save under this scheme can save for the number of years that he targets to get to Hajj, depending on his savings. So, you can start saving with N1000 or, you can start saving with N500,000 or even more depending on your capacity, and the target date to go to Hajj. So, you can save for 5, 10 years, or even more. And as you save, the money is not idle; it is working for you and the profit that we generate is distributed according to the size of your savings. So as you’re saving, profit is added, it accelerates your capacity to get to the target amount and the target date for going to Hajj.
And this is open to all Nigerian Muslims, children, women, Adult, old people, every Muslim can initiate the process either by coming to the branch, or going to the Hajj office in their local government or state, or using the link on our website, or using our mobile app. You can enrol using any of these channels.
Despite economic difficulties occasioned by the pandemic and others, your bank is doing well, how are you able to achieve this?
When you set a target, you look at your capability, the market and the situation. If you set a realistic target, you also motivate your people to follow the target to a logical conclusion, because that also energizes everybody in the system. In 2019 and 2020, we achieved those growths. We ensured that our staff are motivated.
In 2015, Nigeria was number one in Africa in terms of FDI and this has gone down to almost 80 percent, how concerned are you about this?
There is no gainsaying that Nigeria is challenged economically. But one has to be optimistic, to have the belief that these are trying times but will not last forever. By God’s grace, we will turn around and deal with these issues. You also have to know that even within these difficulties, there are some fundamental things that are happening within the system that will give us long term resilience; in areas of infrastructure, addressing transport and power issues.
This government is committed to bringing on stream the Mambilla project, which will bring additional power and renewable energy source; to diversify the basket of renewable energy sources to ensure that the SMEs and other economic units have a source to develop and grow their businesses.
What motivates you to work?
I consider my type of work a ‘win win’ because I look at work and worship as the same. I believe that whatever I put here and is touching the lives of people is rewarded in this world and in the next. So I know that I don’t have anything to lose. Either way, putting 18 hours to work doesn’t bother me, because I believe it is going to be rewarded.
CBN has urged banks to provide foreign exchange to those that need them, how prepared are you? Can anybody walk into Jaiz Bank and get it?
If you have any request right now, you will get it. If your documentation is right and complete, you will not go out of the bank without getting the dollar.
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