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Haroon Ali, The New Boss At BSP Fiji

Haroon Ali, The New Boss At BSP Fiji
Haroon Ali
September 01
10:00 2018

Bank South Pacific Fiji’s new boss has arrived. He wants to make Papua New Guinea’s banking giant the market leader in Fiji.

On August 6, Haroon Ali, 57, took over the reins from veteran banker Kevin McCarthy.

In doing so, Mr Ali became the first Fijian to hold a key leadership position at BSP.

The appointment makes him just the second Fijian leading a locally-based bank, alongside his former colleague Rakesh Ram of HFC Bank.

Despite what he calls a milestone achievement, Mr Ali identifies himself as a “village boy” pointing to his beginnings in Vunimoli, Labasa.

Prior to his appointment, Mr Ali was based in PNG as the BSP Group’s chief risk officer for five years.

With some 60 per cent market share, BSP dominates the PNG market.

In Fiji, ANZ and Westpac are its main competitors.

Other players like Bank of Baroda, HFC Bank and Bred Bank have also made the going tough for BSP.

The bank estimates it holds a 25 per cent market share in the country and Mr Ali believes there is no reason to stop there.

His appointment comes on the back of an announced half-year consolidated group profit after tax of $FJ263.99m, up 12 per cent from 2017.

Mr Ali says BSP Fiji has invested more than $50m over the last five years, particularly to improve its technological capabilities.

Its return on equity has averaged 21.8 per cent in last three years (2015-2017), according bank data.

“We have strong capital and operational support from our parent in PNG which gives us that solid platform to become not only the best but the biggest in Fiji as well,” Mr Ali says.

He assumes office in tricky times.

Liquidity management is proving to be a challenge for banks in Fiji.

The industry has also become intensely competitive, forcing banks to look for innovative solutions or risk losing customers to direct rivals.

In Fiji Sun’s two-part series, Mr Ali outlines some of his plans for the bank, with a notable focus on going digital.

Tell us a bit about yourself?

I have had a very fulfilling banking career now spanning some 38 years.

The most rewarding and enjoyable job was my last role in PNG as BSP’s Group chief risk officer, a role which I held for about five years.

I had the privilege to work with an experienced board of directors, an astute and professional chairman and a most dynamic group chief executive officer Robin Fleming.

I was proud to be the first Fijian to have been appointed to the c-suite of the biggest Bank in the South Pacific.

I have always been very passionate about leading a Bank in Fiji and am extremely grateful to have been given that opportunity by BSP’s Group board.

While it was a tough decision to leave the group role in PNG, I am excited to be back home to lead BSP Fiji branch, following the retirement announcement by the bank’s outgoing country manager Kevin McCarthy.

I entered this industry as a village boy from Vunimoli, Labasa.

I joined Bank of New Zealand (BNZ) in 1980.

In 1990, the ANZ bank acquired BNZ. I’ve always had a dream of running a bank.

I worked with Mr McCarthy for about three years before going across to the head office in PNG.

He is a master strategist who has grown this bank from strength to strength over the last eight years.

From a business that delivered a break even result back in 2011, he has built a bank that delivered net operating results in the order of $40m per year over the last two years.

Mr McCarthy is leaving behind a legacy of great success as he looks forward to a well-earned retirement towards the end of this year.

Meanwhile, he will be working on a few key strategic imperatives and will also undertake a holistic review of the Group’s (Banking, BSP Life and finance) business in Fiji.

We are glad that he will be retiring and remaining in Fiji and will continue to be involved with the business community via a few directorship roles.

My wife and children are the cornerstone of my success not forgetting the support from close families and friends. My wife, Halima is also a seasoned banker who sacrificed her own career to support me succeed right to the top.

She gave up her job and joined me in PNG to support my new challenges in a new environment and travelled frequently to Fiji to see to welfare of the kids.

Halima’s eldest brother Thiphait Hussein and my nephew Mohammed Harun of Classic Paints have been very instrumental to my success as well.

 

What are your plans to grow the business?

BSP Fiji Group is the only financial institution offering the full range of financial services including banking, insurance and asset finance solutions to meet customer needs.

Further, it has the widest network of customer touch points with over 70 service outlets, 115 ATMs, 1,800 EFTPOS terminals and over 150 insurance advisors.

We will continue with our steady growth agenda in 2019/2020 to deliver on the Group Board’s mandate to become the number one Bank in Fiji.

Key strategies will be around quality business growth and disciplined cost containment underpinned by continuous development of our staff.

We shall employ effective strategies and policies in achieving our objectives, always keeping the best interest of our customers, staff, shareholders and communities in the forefront.

We take our conduct risk seriously and as mandated by the group board, we will always strive to be a responsible bank delivering innovative products and services.

The launch of our best in the market banking app on July 27, BSP Online Plus, is a testimony of that commitment and will address the growing need for self-service banking solutions to our customers.

The economic outlook is very positive as well, providing opportunity to investors to grow their business.

Recently, Standard and Poor’s Global Ratings have given its ‘B+’ long-term and ‘B’ short term sovereign credit ratings for Fiji.

S&P explained that the long term rating outlook was stable while its transfer and convertibility assessment on Fiji was B+.

The stable outlook reflects S&Ps expectation that Fiji’s economy will continue to grow over the next 12

months.

BSP is in a strong position to support Fiji’s economic development prospects, especially in the strong

growing tourism and retail sectors.

We will be employing simple and disciplined strategies focussed on customers’ needs and retention.

What are some major investments BSP has undertaken in recent years?

Over the last five years, BSP Fiji has invested more than $50m in improving its technological capabilities

that includes about $20m in the upgrade of its core banking system and associated infrastructure. We

have invested about $10m in branch refurbishments as well during this period and have plans for a new

and modern branch in 2019 plus refurbishment of existing branches.

BSP will continue to invest in its digital banking capabilities to provide customers the comfort of banking

without coming to the Bank.

Following the launch of our new digital banking app, which was an investment of $5.5m, we are

currently focussed on on-boarding customers to use this state of the art app as the most convenience

way of doing daily banking.

To mention a few highlights, app users can do mobile top up from any mobile network and the

enhanced securities features will safe guard the customer’s privacy.

We also encourage customers to use EFTPOS services for acquiring goods and services plus obtaining

cash from our EFTPOS merchants instead of the ATMs.

 

The customer will save on the ATM fees and the merchant will have less cash to manage from a security

and banking perspective.

That will be a focus for us in the year ahead.

I was very happy to see one particular supermarket doing that. Every cashier you go to will as the

customers if they would like to have some cash back.

So instead of putting more ATMs, although we will be installing 20 new ones now, we are encouraging

customers to go down that path.

The review of merchant fees is currently under consideration with the key objective of encouraging the

use of EFTPOS for lower valued goods.

The proposed plan underpins Reserve Bank’s strategy to reduce cash circulation in the market for

liquidity management.

In addition to our on-going investments in premises, IT and equipment, we are committed to giving back

to our people.

We are a socially responsible corporate citizen and have invested over F$8m back in the local

communities since 2010 via our various community projects.

In what direction would you like to steer BSP?

Since I took over as the Bank’s head, many people have asked me about “what will change under my

leadership.” As we know, the banking industry has become so competitive.

And then when you look at the findings of the Prudential Inquiry in Australia, we should expect constant

change to adopt sound banking practices to meet the expectations from our customers, communities

and our regulators. Customers want a Bank that is Trustworthy, Ethical and Strong.

That would be our key focus going forward.

We have strong Capital and Operational support from our parent in PNG which gives us that solid

platform to become not only the best but the biggest in Fiji as well.

BSP is seen as a local bank in Fiji with work permit holders reducing to only one in the short term.

Furthermore, Fiji’s own Super Fund, Fiji National Provident Fund [FNPF], has a significant investment in

BSP.   FNPF’s current BSP shareholding sits at just under 5.0% of total BSP shares.

By dollar amount, FNPF’s investment in BSP is much larger than its investments in any other financial

institution.

For example, FNPF’s BSP investment is over three [3] times the value of its investment in another Fiji

bank and BSP’s return on equity [FY 2017 – 30 per cent] is superior as well.

 

Accordingly, BSP is very much a local Bank that is delivering benefits to thousands of Fijians via its annual

dividend yields that have been in excess of 10% in recent years [11.6% in FY17].  In addition, Fijian

investors have benefited from their participation in BSP Convertible Notes (Fiji) Limited shares.

The latter, coupled with FNPF’s investment in BSP clearly demonstrates that BSP is very much a Fijian

bank and part of the wider banking group in the Pacific.

I am blessed to lead a great management team and very talented staff in BSP Fiji. Together, we shall

strive to provide “consistent and reliable services” to all our customers.

Next Week: Part two

 

Feedback:  sheldon.chanel@fijisun.com.fj

 

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