Jaiz Bank lists on NSE
Jaiz Bank Plc yesterday listed 29.6 billion shares by introduction on the Nigerian Stock Exchange (NSE) at N1.50 per share. The bank, the first sharia-compliant commercial bank to list on the NSE by the listing contributed N38.8 billion to the NSE market capitalization.
In January 2012, the Central Bank of Nigeria (CBN) granted Jaiz Bank an approval to operate as a regional non-interest bank in northern Nigeria.
As a result, Jaiz bank became the first and only full-fledged Islamic bank in Nigeria and recently obtained a National Operating License from the CBN.
Though stakeholders expressed concern about the company’s high volume of shares on issue, the bank’s chairman, Abdul Mutallab said that the bank has no intention to restructure its share volume, but has the commitment to commence dividend payment by 2018 for the 2017 financial year.
Jaiz is the third listing on the NSE this year, the others being Stanbic IBTC ETF Pension Fund and Medview Airline Plc.
Speaking on the rationale behind the listing, the Jaiz Bank MD/CEO Hassan Usman said: “being a quoted company increases the opportunities for more capacity of the institution to do business as well as exploit economies of scale.”
He said the company, though an Islamic Bank, is a company for all Nigerians.
The bank’s financial track record presented to stakeholders on the floor of the Nigerian Stock Exchange showed it has an average growth rate of 30 percent, with customer deposits increasing from N38.7 billion in 2015 to N50.3 billion in 2016.
Total assets grew 28 percent in the same period from N52.6 billion to N67.3 billion, however profit before tax fell 18 percent from N794 million in 2015 to N655 million in 2016.
Tracking the bank’s financial projection for the next five years, the bank said it expects an increase of 144 percent in income from 2017-2021
The bank further said profit is expected to grow to N1.3 billion in 2017 from N747million, a growth of 74 percent.
The banks MD said it based its 5-year financial protection on 7 pillars namely, Retail market focus, organic growth, technology drive, skill gap reduction, strong corporate governance, brand projection and corporate advocacy.
Speaking on opportunities for 2017, Usman said a large percentage of the bank’s income is expected to be derived from Sukuk, which it projected to grow from N1.3 billion in 2017 to N3.2 billion in 2021.
He explained that even though the bank operates a non-interest model, the bank is not a non-profit entity.
The banks model is designed to earn profits through sales, partnership, and leases.
Non- interest (Islamic model) banks basically earn their income from a range of products and services that can be broadly classified into sales, partnerships, and leases.
NSE chief executive, Mr. Oscar Onyema, lauded the bank for spearheading Islamic bank listing on the exchange, saying that the estimate of the current size of the industry ranges from $1.88 trillion to $2.1 trillion with expectations of market size to be $3.4 trillion by end of 2018.
