Challenger
AS CEO OF BANK AL ETIHAD, NADIA AL SAEED HAS CHARTED AN AMBITIOUS COURSE FOR THE JORDANIAN LENDER BY PUSHING IT IN NEW DIRECTIONS AS IT LOOKS TO CHALLENGE BIGGER RIVALS.
As CEO of Bank al Etihad, Nadia Al Saeed has charted an ambitious course for the Jordanian lender by pushing it in new directions as it looks to challenge bigger rivals.
These days, if you walk into one of Bank al Etihad's branches in Jordan, you may find it half as busy as it used to be—but that's not because the Amman-headquartered lender is losing customers. “Since we launched our mobile app, the footfall in our branches went down by around 50%,” says Nadia Al Saeed, the bank's long-time CEO.
Many customers are instead banking online, from managing credit cards and paying bills to setting up new accounts, all without stepping foot in a branch location. The lender—the fourth largest in Jordan by total assets—has invested heavily in digital banking operations in the last two years. That includes launching a new app a year ago, which 85% of the bank's clients now use on a daily basis. It's all part of Al Saeed's goal of establishing Bank al Etihad as Jordan's top digital bank in the coming years.
The focus on digital banking is the latest example of how Al Saeed is charting an ambitious course for Bank al Etihad, pushing the lender in new directions as it looks to gain ground in Jordan's financial industry. So far, the moves have helped Bank al Etihad grow in Jordan's crowded financial sector and challenging economic climate. Assets have grown by more than four times on a consolidated basis under Al Saeed, and it's making progress in market share. Bank al Etihad has yet to report 2019 results, but net profits in 2018 rose to $58 million, up 18% from a year prior. Meanwhile, its market share in total customer deposits in Jordan reached 8.8% after enjoying a 12.6% annual growth rate in deposits over the five years prior. “In terms of outcomes, we've grown in a big way,” says Al Saeed.
Since taking over as CEO in 2008, Al Saeed has worked aggressively to diversify the lender, shifting focus away from its roots as a small corporate bank founded in 1978. Corporate clients are still an important part of its business, but Bank al Etihad has also now established a presence in retail banking, with 49 branches and 119 ATMs across Jordan, while broadening its focus to serve as an important partner for small and medium-sized enterprises (SMEs) and entrepreneurs. Al Saeed has also focused on catering to female customers, an underserved market in Jordan, with women now representing 36% of Bank al Etihad's clients.
“They're really looking very holistically at product development, which is very much in line with what we want to achieve as a development bank,” says Heike Harmgart, managing director for the European Bank for Reconstruction and Development [EBRD] in the southern and eastern Mediterranean region. The EBRD has worked closely with Bank al Etihad for years, including extending a $30 million subordinated loan in 2019 to help with its growth plans and lending capacity, with a focus on increasing finance to smaller businesses.
Another key move by Bank al Etihad came in 2017, when it finalized the acquisition of a controlling stake in the Jordan Dubai Islamic Bank, which has since rebranded to Safwa Islamic Bank. It was a natural move for Bank al Etihad as it looks to expand its footprint, especially since geographic expansion isn't easy due to instability in nearby markets. “We knew that this was a good opportunity,” says Al Saeed, who comes in at number 50 on Forbes Middle East's Power Businesswomen ranking.
Yet, Bank al Etihad is still small compared to Jordan's two biggest banking players, Arab Bank and the Housing Bank. And there's plenty of competition in general, with more than two dozen banks working to serve Jordan's population of roughly 9.7 million. “Jordan is really overbanked for its population and for its economic capabilities,” says Al Saeed.
Against that backdrop, the development of digital capabilities is now at the core of what Bank al Etihad is doing, says Al Saeed. This, the thinking goes, will allow them to scale and challenge rivals in a way that was impossible before. Previously, banks had to focus on branch expansion to compete with bigger players, she says, but that's changing as new technologies influence customer expectations and create new ways to grow.
There's evidence to support Al Saeed's approach. Exact numbers are not currently available, but Bank al Etihad's app has at least 100,000 downloads on Android alone—the same as Arab Bank and Housing Bank—while the rest of its local rivals fall below that threshold, according to statistics from the Google Play Store.
Bank al Etihad's digital banking push is a work in progress, but Al Saeed is keen to portray the lender as a disrupter. She repeatedly refers to Bank al Etihad as a “challenger bank,” referencing a financial industry buzzword that describes the wave of innovative startup banks taking on long-established lenders. “I think since the beginning we've been a challenger bank,” says Al Saeed.
She has plenty of experience to draw on. Al Saeed has now led Bank al Etihad for more than a quarter of its existence, firmly entrenching herself as a key player in Jordan's financial industry. But long before becoming
“I think since the beginning we’ve been a challenger bank.”
CEO, she had already established an impressive resume.
Al Saeed actually began her career at Bank al Etihad—then known as Union Bank—starting out as a relationship manager back when it was focused on corporate banking. Although born in Kuwait in 1965, she had grown up in Amman and studied economics and business administration at the University of Jordan (later receiving an MBA from the American University of Cairo in 1992).
While joining the bank, Al Saeed was still considering other career paths; she simultaneously worked, briefly, for a startup incubator. But still, she gradually worked her way up the ranks at Union Bank, eventually becoming head of corporate banking.
Then, her career took a turn. Al Saeed made the jump to the public sector, serving as secretary general for Jordan's Ministry of Information and Communications Technology. She made an impression, leading to her own appointment as ICT minister in 2004. Al Saeed looks back on her time in government as a valuable experience. “It allowed me to see things from both sides,” she says. “It allowed me to see the bigger picture.”
Al Saeed served as ICT minister until 2006, after which she became director of the Dead Sea Institute, a development think tank. She then returned to Bank al Etihad as a strategy advisor, working with the global consulting firm McKinsey for one year to develop a new growth strategy for the bank. A year later—and on the eve of the global financial crisis—she became its CEO.
As the newly minted CEO, she was immediately tasked with leading an expansion into retail banking. Corporate banking on its own offered limited growth prospects, with relatively few big corporations in Jordan. Simultaneously, Al Saeed oversaw the rebrand to Bank al Etihad, rolling out the new name, slogan and corporate image in 2011.
Along with the retail push, the bank eyed underserved segments in the Jordanian market, where Al Saeed saw an opportunity to develop financial products and services aimed at women. Although Jordan has a highly-educated female population, the economic contribution of women in the country is low. “That in itself is a great opportunity,” says Al Saeed. Access to financial services is a problem in general; only 27% of women in Jordan have access to a bank account, compared to 53% of men, according to a USAID report.
As a result, in 2014 Bank al Etihad launched Shorouq, a first of its kind financial inclusion program offering specialized products and services for women. It includes everything from savings accounts and startup loans to networking events aimed at women. “We are the go-to bank in terms of women banking,” says Al Saeed.
Simultaneously, Al Saeed has led an effort to work with local SMEs and entrepreneurs. These firms struggle to access finance, despite accounting for 95% of active businesses in Jordan and providing 70% of private sector employment, according to the EBRD. The London-based institution has been a key partner here, including providing a $20 million credit line to Bank al Etihad in 2015 intended for lending to micro, small and medium-sized enterprises. Bank al Etihad has also launched a program to co-invest in entrepreneurs by partnering with the Innovative Startups and SMEs Fund, targeting investments averaging between $100,000 to $500,000.
The CEO has worked to diversify her team, putting an emphasis on hiring female employees. Today, 45% of her employees are women, including her top deputy. “I think that the culture of the bank, it has always been 100% merit-based and transparent and one that offers equal opportunity to everyone,” says Al Saeed.
Meanwhile, as new technologies began to influence the banking industry globally, Al Saeed took note. “Banks need to understand that they have new competition,” says Al Saeed, pointing to how big global technology firms and telecoms are encroaching on the financial industry.
On her watch, Bank al Etihad has been proactive in embracing innovations in Jordan. In 2015, it took part in a $5 million funding round into the Jordanian financial technology startup MadfooatCom, along with Cairo Amman Bank and the Capital Bank of Jordan. MadfooatCom operates an online billing platform, which plays an important role in facilitating electronic bill payments in Jordan.
The same year, Bank al Etihad invested in Liwwa, a Jordanian peer-to-peer lending platform, in a funding round alongside regional venture capitalists. Ahmed Moor, Liwwa's CEO, says as a shareholder Bank al Etihad has gone out of its way to support his business, which he co-founded in 2013. “Nadia's leadership comes through at all levels,” says Moor. “Their openness to new ideas, the speed at which they move, it's really been a rewarding experience for the past few years.”
Bank al Etihad also brought in Amer Abulaila, a co-founder of the Jordanian e-commerce firm MarkaVIP, as its Chief Technology Officer in 2016 (many of the bank's Jordanian competitors don't even list a CTO position on their corporate websites). Still, the bank's rivals aren't ignoring digital banking and new technology developments. Case in point, in 2018 Arab Bank created a startup accelerator focused on financial technology development.
It won't be easy, but Al Saeed is banking on her team developing digital capabilities that can serve as a launchpad for successful new products and improved customer service—and in the process, hopefully, give Bank al Etihad an edge. The app is just the beginning, says Al Saeed. “The way you grow, the way you scale, is totally different than before.”