45 days after, Jaiz shares on the rise at NSE
On February 9, JAIZ Bank Plc, Nigeria’s only fully-fledged Islamic Bank, joined the league of quoted companies on the Nigerian Stock Exchange, by admitting its 29,464, 249,300 ordinary shares at N1.25 per share, valued at N36.8 billion on its Daily Official List.
The move by the bank to be listed on the stock exchange was very swift considering the period it commenced full operations in the country. Jaiz Bank was founded in 2003, but got regulatory approval in 2011 and started full operations in 2012.
A cursory look at the performance of the shares since its listing on the Nigerian bourse showed that the value of the company has been enhanced as it shares have appreciated by 12 per cent from N1.25 to close at N1.40 as at the close of trading last Friday.
Market operators said given the fact that Jaiz Bank is the first and only stock in that segment of the market, it would continue to attract significant patronage.
Experts have suggested that the secret is in the bank’s model. While banks in the Gulf region rely on the deposits from governments, that is, the public sector, Jaiz Bank built its model around individuals and firms in the private sector. To get to these individuals and firms, the bank paid adequate attention to the quality of its personnel and infrastructure.
In contrast with conventional banks that finance contracts based on interest, Jaiz Bank’s financing is profitbased. Its approach is asset-based, including direct trading instead of trade facilitation. Underlying its operations is a commitment to ethical and moral scrutiny.
Complementing the above are its processes and products which are structured to address the needs of individuals and firms regardless of their religious and ethnic affiliations.
“So far, wherever we are, we have all kinds of customers, it is a variant of financing but it is the same in terms of the utility that we create. The difference is in the way we intervene. So, we try to let the customers know. Also, because they see some of our staff who are non-Muslims they appreciate that the services are not limited to Muslims.” Hassan Usman, MD/ CEO Jaiz Bank Plc has said.
On the future outlook of the Bank, the CEO said going by the growth trajectory which averaged 30% per annum, Jaiz Bank’s prospects are bright. The projection for the next five years indicates a gross revenue of N16 billion by 2021and profit before tax of N7.9 billion.
According to him, the bank’s corporate plan outlines its way forward with the strategies, priorities and activities it will focus on the achieve its financial goals.
“We have set out on a path of reinvention of the banking landscape in the country. This journey over the next few years will focus on the changing how banks should operate to better improve the lots of the community, while delivering on their commitments to the investors/shareholders. We are focused on building on our culture of ethics and taking the necessary decisions to align our perspective with client expectations,” he said.
Speaking on dividend policy of the bank, Usman said it has a policy that tries to strike a balance between retaining sufficient cash in the business to finance its organic growth strategy and rewarding its shareholders, who have come a long way supporting the banks’s vision since its initial public offering in 2003.
The bank has also projected to pay its first dividend after its listing on the NSE in 2018.
Jaiz Bank in 2016 recorded a 33 per cent increase in assets, which rose to N36 billion, up from N27 billion the previous year. Share capital rose by 50 per cent from N10 billion in 2015 to N15 billion by 2016 year end. Consequently, its balance sheet rose 45 per cent to N80 billion from N55 billion in corresponding period in 2015.
Impressed by Jaiz Bank’s records within its short period of existence, the Central Bank of Nigeria (CBN) approved the upgrading of its operating licence to a national banking license. Effectively, Jaiz Bank is now backed by Nigerian laws to operate in all the 36 states of the federation and the Federal Capital Territory (FCT) Abuja.
Usman said: “It is not only Jaiz Bank’s management that is happy today. So are the promoters of non-interest banking in the country: local and international scholars in the field of Islamic finance, the Central Bank of Nigeria (CBN) which weathered the storm some few years back when Jaiz sought its operating licence, who all now have every reason to say the efforts were worthwhile.”
In his remark at the listing, the Chief Executive Officer, NSE, Mr. Oscar Onyema said, “I congratulate the board and management of Jaiz Bank Plc on its successful listing on the main board of the Nigerian Stock Exchange. With large un-banked populations as well as established middle classes across the continent, which is home to numerous member nations of Organization of Islamic Countries, Africa has been openly touted as a target Islamic finance market.”
Jaiz Bank which commenced operations with three branches in Abuja, Kano and Kaduna has since increased to 27 across the country. More branches are scheduled to be opened within the year to extend the services to its growing clientele across the nation.