Jaiz Bank Plc plans to raise new equity funds of about N13 billion through a private placement as the ethical commercial bank seeks to deepen its growing balance sheet.
Jaiz Bank plans to offer 20 billion ordinary shares of 50 kobo each at 65 kobo per share through private placement to identified investors.
In a regulatory filing at the Nigerian Stock Exchange (NSE) signed by Jaiz Bank’s Company Secretary, Mrs Rukayat Dahiru, the bank indicated that the board of directors has called an extraordinary general meeting (EGM) of shareholders to seek formal approval for the private placement.
At the EGM scheduled for late October in Abuja, shareholders are expected to mandate the directors of the bank to issue new shares and undertake a private placement. The meeting is also expected to approve the listing of the resultant additional shares on the NSE.
According to the bank, the net proceeds of the private placement will be used to fund its branch expansion, enhance information technology infrastructure and boost working capital in lin with the growth objectives of the bank.
The management of Jaiz Bank projected that the non-interest financial institution will post a gross income of N5.41 billion in the fourth quarter with an average pre-tax profit per average sales expected at 13.03 per cent.
In a forecast recently submitted to the NSE, Jaiz Bank predicted that profit before tax will be N705.37 million while profit after tax is expected to close the three-month period at N634.83 million.
The forecast, signed by Jaiz Bank’s Chief Financial Officer, Abdulfattah Amoo, indicated that the bottom-line performance was predicated on financing income of N4.94 billion and financing expenses of N1.39 billion, leaving net revenue from funds at N3.55 billion.
Within the three-month period between October and December 2020, the bank expected other incomes of about N467.45 million, which is expected to push net operating incomes to N3.85 billion. With operating expenses at N3.14 billion and taxes projected at N70.54 million, pre and post-tax profits are expected to close the period at N705.37 million and N634.83 million respectively.
Jaiz Bank seeks to achieve an overall vision of being the leading non-interest financial institution in Sub Saharan Africa (SSA) with total income expected to be about N81.17 billion and profit after tax at N11.09 billion for the five-year period between 2018 and 2022. The bank outperformed its forecast for the 2019 financial year and the latest forecast fourth-quarter 2020 indicated it may surpass the 2020 full-year targets.
According to the forecasts, gross income is expected to rise to N15.73 billion, N19.27 billion and N23.51 billion in 2020, 2021 and 2022 respectively. Profit before tax is projected to rise to N3.01 billion, N4.03 billion and N5.47 billion in 2020, 2021 and 2022 respectively. After taxes, net profit is expected to rise to N2.11 billion in 2020 and rise consecutively to N2.82 billion and N3.83 billion in 2021 and 2022 respectively.
Under the plan, the balance sheet of the bank is expected to increase consecutively over the years. Total assets are projected at N182.6 billion, N220.02 billion and N262.80 billion in 2020, 2021 and 2022 respectively. Deposit is projected to rise consecutively to N142.81 billion, N177.09 billion and N216.05 billion in 2020, 2021 and 2022 respectively. Shareholders’ fund is also projected to increase to N35.23 billion by 2022.
Managing Director, Jaiz Bank Plc, Mr. Hassan Usman, has said the overall vision of the bank is to become the leading non-interest financial institution in Sub Saharan Africa.
He said the bank has been positioned to sustain its growth trajectory, pointing out that the bank has the necessary resources to achieve its growth targets.
Usman said the bank’s growth strategy of focussing on the real sector, though painstaking, will ensure sustainable growth and better returns over the years.
According to him, Jaiz Bank wants to develop small and medium enterprises (SMEs), grow with them and support them not only for profit-making but to ensure the country achieves real growth.
“We shall continue to internally develop new customers, new markets and new product for both our physical and virtual channels. We remain committed to continuous up-scaling of our governance mechanism to meet the highest operating standards. Cost efficiency is at the heart of our value creation model. We shall strive to be a low-cost operator,” Usman said.
He noted that while the bank would continue to expand its operations across the country by opening more branches, it will significantly leverage on technology to reach the nooks and crannies of the country and bring the semi-banked and unbanked population into the formal economy.
Jaiz Bank was created out of the former Jaiz International Plc which was set up in 2003 as a Special Purpose Vehicle (SPV) to establish Nigeria’s first full-fledged non-interest bank. The bank is owned by some 27,000 shareholders including the Islamic Development Bank (IDB). It obtained a regional operating license to operate as a non-interest bank from the Central Bank of Nigeria (CBN) on November 11, 2011, and began full operations as the first non-interest bank in Nigeria on January 6, 2012. In 2016, it obtained the national banking license from the CBN and started to rapidly spread its network across the country.
Jaiz Bank recorded another milestone on February 9, 2017, as the first non-interest financial institution to be listed on the NSE with the admission of the entire issued share capital of the bank to the main board of the Exchange.