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Jaiz Bank MD Says NPL within Tolerable Limits

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Vivian Ikwuamaeze

As the incidences of Non-Performing Loan (NPL) continue to dog bank’s in Nigeria, Jaiz bank plc Wednesday disclosed that its exposure to NPLs in the short to medium term was within tolerable limits.

Mr. Hassan Usman , Managing Director of the bank, said in Abuja on Wednesday that Jaiz bank was not heavily or significantly exposed to the oil sector, but the bank’s exposure is to real estate.

Hassan Usman added that Jaiz bank has limited exposure because Forex: is important because “we do not have the exposure that other banks have because we do not borrow or invest in dollars.”

Speaking on the foreign exchange situation in the country now, Usman noted that Jaiz bank “makes money from selling Forex and our counterparts/customers depend on forex for various reasons. If they don’t get dollars on time our exposure to them is intertwined.”

Hassan Usman also justified listing of the bank’s shares in the Nigerian Stock Exchange (NSE) on twins reasons of enhancing transparency and openness in the  bank’s activities.

Usman said the gesture of listing Jaiz’ shares “fulfilled the bank’s pledge in 2012 at its Initial Public Offerings (IPOs), that its shares would be publicly listed at the Exchange to create additional values for its shareholders.”

The Jaiz MD was optimistic that the bank’s outlook for 2017 will be much better than 2016, stressing that “if current policies on forex and infrastructure provision is maintained, 2017 will be a good year.”

Jaiz bank he said has challenges like any growing institution. One of such challenges he said has to do with perception. According to him, “this product is not a religious product it is a mode of financing that tries to provide goods and services to people who cannot afford to buy such goods and services directly.”

Usman lamented that the most important challenge facing the bank “is awareness by all stakeholders but this is being overcome. Islamic banking is not about the creed. There are issues about specifics. Even those clamouring did not fully know or understand what Islamic banking was all about. They thought it was charity, when they found out, that they had to pay for services there was a rude shock, we normally try to explain this. It is an Organization set up to make profit, create value and be sustainable.” Other challenges he pointed out are the enabling environment like infrastructure for non-interest banking like liquidity instruments. The Ministry of finance he said “had promised us last year that by the first quarter of this year, there will be sukuk. Another challenge is the limited number of qualified trained manpower to manage Islamic banking.”

In spite of these challenges, Hassan Usman noted that “the product (Jaiz bank) has proved itself to be sustainable. We now have national franchise branches in South West and South-South and we are opening more branches in other parts of the country.”

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