Jaiz Bank records highest H1 profit in 4yrs as investment income soars

Jaiz Bank, Nigeria’s pioneer non-interest lender, grew mid-year profit to the highest level in four years despite the paucity of non-interest banking liquidity management instruments.

Net income of the lender almost quadrupled to N815.6 million in six months to June 30, 2019, indicating some 615 percent surge over N114 million reported similar period in 2016.

The sharp growth in profit was spurred by massive increase in receipts from investment activities and consequently buoyed gross earnings by 58 percent to N5.75 billion in the period.

A further look at the bank’s earnings report revealed that proceeds from Sukuk, which accounted for 82 percent, spiked to N1.99 billion from N509 million last year.

The lender paid N1.19 billion as profit to investment account holders, bringing its share for being an equity investor to N4.55 billion, twice that of last year.

The bank set aside N294 million as impairment change, with net spread after provision doubled to N4.26 billion.

The bank made N99 million less proceeds from electronic business, which took a toll on fees & commission income. Jaiz Bank incurred N11.8 million as operating loss driven by N108.6 million deficit from foreign exchange transactions.

However, total income for the period appreciated to N4.82 billion from N3.39 billion last year.

Total expenses of Jaiz Bank rose to N3.94 billion mid-year 2019 compared to N3.16 billion a year ago. Staff costs (+30%) rose the most among other cost components.

The lender grew pre-tax profit four- folds to N906 billion, while tax expense climbed N67 million higher. Given improvement in its bottom-line, profit allocated to each unit of shares rose to N2.77 from 78 kobo last year.

As at June 30 2019 period ended, the bank total assets and liabilities stood at N144 billion and N81 billion respectively.

Cash sourced by the bank from Central Bank of Nigeria (CBN) stood at N12.9 billion as at half-year 2019.

The bank explained that the sum represents the onlending facilities granted by the CBN in collaboration with the Federal Government under the Commercial Agriculture Credit Scheme (CACS) with the motive of providing concessionary funding for agriculture to promote commercial agricultural enterprises in Nigeria.

The lender during the year invested N17.98 billion in Sukuk issued by the Federal Government. The Sukuk has 7-year tenor due 2025 at a return of 15.74 percent.

The bank had in the early period of 2019 expressed commitment to support small and medium scale enterprises despite the sluggish recovery of the Nigerian economy.

Jaiz Bank was established about 16 years ago, and provides Islamic banking products and services, online banking, leasing, bond (sukuk) and guarantee. Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: David Ogar