Hassan Usman is a seasoned and accomplished banker with decades of experience behind him. He is currently the Managing Director/CEO of Jaiz Bank Plc. Hassan is a 1985 first class graduate of Accounting from Ahmadu Bello University, Zaria, and an alumnus of Maastricht School of Management, Netherlands. In this exclusive interview with Bashir Ibrahim Hassan, GM, Northern Operations, BusinessDay, Hassan speaks on his bank’s stellar performance in 2019, which he describes in his own words as the “best since inception”; challenges of operating under Covid-19; and his optimism for a better operating economy in the country and his bank’s ambitious target for the year 2020, amongst others. Excerpts:
How would you rate last year’s performance?
The jury is out there — we thank God Almighty for making the 2019 the best year we have had, We grew more than 50 percent in terms of size. Our deposits and assets grew more than 50 percent and our profit was more than doubled.
On every count, 2019 has been the best year we have had since we started operating in 2012.
How were you able to achieve this success?
All of this is a continuum. I have always said that Islamic financing for non interest banking is new and everything new is like baby — when you give birth to a child, you do not expect the child to start running; it take some time to grow, and business acclimatizes with the world.
When a woman is in labour, you are expected to provide whatever the mother and the child would need to grow, just citing an example.
Unfortunately for the Islamic bank, when it was born some of those infrastructure required to grow it was not there, but, happily, from 2018 the liquidity management product started to come in; so the bank is able balance the portfolio, risk and increase its returns.
And as we grow the branch network and increase customers, as the customers get good services, they also tell others. So you have the words of mouth advertisement, which lead to more customers, and as they grow the profit comes with it.
All of this is underscored by the commitment of the board and the staff of Jaiz bank. The bank has staff that are committed to the system and are ready to sacrifice to make sure the bank grow. Many of our staff left their conventional and other institutions. So they are committed to deliver on the job. They take the job as a way of providing humanity with a need.
How has COVID-19 impacted the bank?
COVID-19 has posed a great challenge for everyone, and to us as well. Our priority has been on how to operate without jeopardizing the health of our staff and customers that are coming.
This was a big challenge; so we had to ask more than half of staff to stay and work from home. At the beginning, movements were restricted, and customers were not able to reach us, as their businesses were also under lock and key.
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Productively, not just for Jaiz bank but nationwide and worldwide, was affected. We still cannot tell you the real impact of COVID-19 on the Nigerian economy. Nobody can tell precisely how it is going to work out, but we pray and hope that as the system is being opened, that we only lost one quarter, and fourth quarter will come in with some growth, so that eventually we don’t go into recession by the end of the year. But, definitely, we are in a new normal, so we are poised to adapt to the new challenges. Our staff and supervisors are getting better with working off location. We have started to recover the level of productivity prior to COVID-19. We have started to re-engage and continue with our financial services to our customers.
For Jaiz, I can say that, for this year, I do not see us doing much less than what we were able to achieve last year, in terms of productivity and all other indicators of our balance sheet. I am very hopeful that we will not see a serious reduction in our performance. Perhaps, we may not see the doubling of our productivity as it was in 2019, but I do not see us doing less.
Talking about the projection of a deeper recession and slower growth in 2021, can you take us through how concerned you are with all these predictions.
IMF have their criteria for making predictions. They don’t always have to come through and we pray they don’t come through for Nigeria. Most of the predictions are tied to government revenues, especially the oil sector revenue, which are significant. But in Nigeria, we look at the composition of agriculture, which the government has been giving much attention. It’s also doing well, but not just the traditional agriculture but the entire sector, with more processing capacity, especially in rice and other products.
That is the area in which we envisage some growth, and if indeed the economy opens up, I hear the government will intervene in critical areas of the economy where the pandemic has beaten hard. I am hoping and believing that the economy will remain stable up till the end of the years and if that happens and if we do not have more serious deterioration in the price of crude — which is around $40 now — if it remains or improves better than that, I’m inclined to hope that we won’t go into a deep recession.
How do you see the future of Islamic banking in Nigeria, considering the pace of growth?
We expect that the Islamic banking by now should have grown more than what it is at present.
Banking is a technical business that requires you dealing with resources belonging to many stakeholders. It is not the speed, but ensuring enhanced maturity level. Just like we see the growth of a child, it takes proper care and nurture for a child to grow. Jaiz have a vision to be the clear leader in Islamic financing in sub-Sahara Africa. To do that, Jaiz will have to grow and become a major player in Sub-Sahara Africa. Virtually, it is the major player in Nigeria and I have no doubt that we are on our way to being the major player in sub-Sahara africa starting with Nigeria.
The road is bumpy but we have a product and model built on fairness and transparency. We hope that the value of this model is seen not only here but across the globe. And because of the value we bring to the table, it is growing at a double-digit pace. If you talk about a system growing double-digt pace, it surpasses any other sector in the economy, except maybe the Fintech, Iin 2015, our balance sheet was about N50billion. By the end of 2019, we are at N150 billion, which means we have tripled the size. By the end of business in June, we were almost getting to N180-N190 billion. Our target is to close this year with N200 billion balance sheet size.
So in five years, if you grow from N50 billion to N150 billion, it means we are growing by at least 50 percent in less than 6 ye. We are doing 3 times what we had.
Growing by this rate, I believe, just give us time we will be there.