By Walt WilliamsGrowing up in Pakistan in the 1980s, Saleem Iqbal says there were four professions everyone suggested he pursue: doctor, engineer, CPA and banker. He decided on the latter, although the choice didn’t impress the head of the university where he wanted to study.
“The principal of the college said you should apply for pre-med—‘Look at your scores, you aced everything,’” Iqbal recalls. “I said no, I want to study commerce. He said, ‘Look, that is the bottom of the pile.’”
HAB itself is not what many picture as a traditional community bank. Aside from being headquartered in Manhattan, HAB does not have a large consumer business. Its two core businesses are commercial real estate and correspondent banking, with a niche carved out in the 1980s of providing banking services to South Asian garment importers in the tri-state area. Its correspondent banking division now has bank clients in 20 countries outside the U.S.
New York may be a different environment from those that most community banks operate in, but Iqbal understands how important the institutions are to the cities and regions they serve, and the obstacles they face no matter the business model.
“Endless regulation and a lot of new regulation is making it challenging for those banks,” Iqbal says. “Communities already know the roles that they play—they play positive roles. Work needs to be done to explain and convince legislators and regulators” of that fact.
Iqbal was his own taskmaster growing up. Being from a small family, the CEO says he pushed himself to get the best scores in whatever classroom setting he was in and took it personally when he fell short. “If I was in second position in my class or school or wherever—or third—that was like a compromise because I should be number one in class all the time. So that was my mindset and I maintained it throughout school and college,” he says.
Iqbal decided at an early age he wanted to pursue a career in commerce. That decision came in large part because of an uncle who was a senior banker, a position that the young Iqbal viewed as a very glamorous job. “I realized later that community banking and commercial banking are not at all glamourous. It’s hard, hard work,” he says. But the younger Iqbal had made up his mind, “and I feel fortunate that dream continues to come true.”
After earning a master’s degree from Quaid-e-Azam University in Islamabad, Iqbal moved to the United Arab Emirates to pursue a career in banking. The country was a young nation at the time, founded in 1971, and was building up its banking industry. “The objective was to be in banking,” he says of his early career. “It didn’t matter which bank where, just as long as it was a bank.”
Iqbal would later work for Habib Bank AG Zurich in Oman before moving to Los Angles in the late 1990s. He moved to New York in 2000 to join HAB as COO. He was appointed CEO in 2008, joking that wasn’t the best year to become the top executive of a financial institution given it was the height of the financial crisis.
HAB was in the trade finance business at the time, which was shrinking. The revenue-driving products that other community banks rely on—such as residential mortgages, auto loans and credits—really were not an option for HAB because of its location. “I said we had to become a commercial real estate lending because that is the only thing that will fit in the markets where we operated. We have a branch in Long Island, we have one in New Jersey, we have one in Queens County [New York], and we have two in greater Los Angeles—we cannot have a critical mass in any of these markets. There were so many banks, and every bank was larger than us.”
Correspondent banking is the other main business for HAB, with the bank providing services for roughly 140 banks in multiple countries. Nearly a third of HAB’s 45 correspondent banking staff focus on compliance, according to Iqbal. “We always wanted to be the darling of the regulators. Regulators should be completely satisfied in what we do and how we do it, and then we’ll worry about growth or earnings.”
That dual focus on CRE and correspondent banking helped HAB grow from $140 million in assets when Iqbal first joined in 2000 to $2.1 billion today. “Everything we did worked,” he says.
A banking life
“My hobby is banking,” Iqbal says. As a self-proclaimed workaholic, when not working he is volunteering with banking industry groups such as ABA and the Conference of State Bank Supervisors. He also served for six years on the Federal Reserve Bank of New York’s Community Depository Institutions Advisory Council.
As CBC chair, Iqbal will help guide ABA strategy on government relations issues and priorities, with the council acting as a communications link between ABA staff and bank leaders. He sees regulation rather than market disruption as the driving force behind the decline of many community banks in recent years, and he hopes legislators and regulators can come to understand the vital role banks play in the areas they serve. “If [banks]have other challenges due to disruption from fintechs or others, they have to learn how to fight those—that’s market forces,” he says. “But at least the regulatory side should be a bit kind.”
Still, when it comes to fintechs and credit unions, Iqbal notes banks are not playing on a level field. “The reason for an increase in regulation after 2008 was to protect the consumers, but now with these alternate lenders, you don’t know what they’re doing,” he says. “They’re not banks. How’s the consumer protected? They’re not protected. At the CBC, I think we’ll look at how to bring this to the attention of legislators and regulators.”