Jaiz Bank breaks even in 3yrs

… reports N157m profit, but laments lack of sharia-compliant investible instruments

 Jaiz Bank, Nigeria’s sole non-interest bank, on Wednesday, reported a modest N157 mil- lion profit before tax, that brought the bank to a break-even point, three years after commencement of operations.

The bank sees the absence of sharia-compliant liquidity management instruments in the Nigerian money market as a major hurdle to growing earning assets, as only Osun State has been able to is- sue sharia-compliant Sukuk bonds as of today.

Despite these challenges, the bank in 2014 recored a 221 percent leap in total income to N2.9 billion from N915 million in 2013.

The bank was also able to restrict its expenditure growth to only 20 percent, despite the 50 percent ex- pansion of operations and branch network, and re- alised N146 million non-sharia compliant income, which it posted as part of the N1.965 billion Charity Fund.

The bank, still a regional bank, now has 15 branches as against 10 as of 2013, and still awaits the Central Bank of Nigeria’s final nod for a national licence.

“The profitability was driv- en by continuing revenue growth, disciplined cost man- agement and lower financing impairment expenses,” Uma- ru Abdul Mutallab, the bank’s chairman, said, Wednesday, at the third annual general meeting in Abuja.

The bank’s total assets grew from N33.9 billion in 2013 to N42 billion in 2014, while total earnings assets jumped by 114 percent from N11.5 billion to N24.5 billion.

“During the year, your bank was able to drive itself to break-even point; a feat that is highly phenomenal when one considers the fact that there is no platform yet for the bank to make income from its treasury management  activities due to the absence of sharia-compliant liquidity instruments in the market,”

Mutallab told the sharehold- ers, who he assured of divi- dend payments from 2016.

Mutallab was optimistic that adequate compliant instruments will soon be available in the market, es- pecially with the emergence of other players and growing interests in Sukuk by sub- national institutions.

He was equally hopeful that CBN regulation will gear towards creating a level play- ing ground by providing ade- quate compliant instruments to support the operations of this specialised sub-sector of the banking industry, and also raised confidence that the government will also step up efforts to ensure bet- ter security to enhance the confidence of local and in- ternational investors.

The chairman said they were cautiously positive about the outlook for the 2015 financial year, despite
the seeming challenges, and expect to regain business and consumers’ confidence following the successful completion of the general elections.

Mohammad Nurul Is- lam, Jaiz Bank managing di- rector, told the shareholders that customers’ patronage remained strong in 2014 across retail and corporate banking segments.

According to him, financ- ing accessed by customers grew to 1076 from 375 in 2013, totalling a value of N22.2 billion, as compared with N19.5 billion the previ- ous year.

He also said that the bank held N5.6 billion more de- posits on behalf of the cus- tomers in 2014, from N21.9 billion in 2013.

The bank paid out N198 million as taxes both at state and national lev- els, and continued its com- mitment to the community by supporting over 20,000 internally displaced persons in North Eastern Nigeria.

ONYINYE NWACHUKWU,Abuja