Jaiz Bank Nigeria Plc has maximized the wealth of stakeholders as it recorded improvement in key performance metrics to end 2018 financial year.
The stellar performance validates the focus and market penetration strategies introduced by management and board of directors.
With a strong balance sheet, consistent growth in earnings, and robust capital base, the Islamic lender has the capital buffers to weather the headwinds.
The 2018 audited financial statement of the lender showed investment in electronic banking added impetus to profit as non interest revenue spikes.
Jaiz Bank has been part of the process of ensuring financial inclusion through agency banking and also the use of technology to reach the unbanked.
Income from Murabaha transactions drive revenue
Gross income increased by 8.50 percent to N7.51 billion in December 2018 from N6.92 billion as at December 2017. Total income followed the same growth trajectory as it increased by 12.09 percent to N7.05 billion in the period under review from N6.29 billion the previous year.
The growth in gross income was driven by total profit from Murabaha transactions that rose by 12.098 percent to N7.05 billion in December 2018 from N6.29 billion the previous year.
Fees and commission income was up 25.96 percent to N988.43 million in the period under review as against N784.70 million the previous year; this means the Islamic bank’s investment in technology with a view to bolstering profit is paying off.
The uptick in fees and commission income was largely driven by a 29.73 percent, 6.31 percent, and 66.27 percent increase in Banking services, net income from electronic business and LC/interest income finance to N264.74 million, N322.53 million, N401.16 million from N204.06 million, N303.37 million, and N241.27 million.
Other income, which comprise of Waka Income, was up 32.03 percent to N240.30 million in the period under review from N182 million as at December 2017.
Cost controls, internet banking strengthens profit
Jaize Bank’s profit after tax spiked by 55.34 percent to N834.36 million in the period under review from N537.11 million as at December 2017.Profit before tax was up was flat at N897 million in the period under review.
The improvement in profitability was amid a 14.07 percent increase in operating expenses to N6.16 billion in December 2018 from N5.40 billion as at December 2017.
A breakdown of total operating expense figure shows staff costs were up 18.17 percent to N2.80 million in the period under review as against N2.37 billion as at December 2017. Operating expenses such as maintenance and depreciation moved by 9.60 percent to N2.74 billion in the period under review as against N2.50 billion the previous year.
Jaiz Bank has turned each Naira invested in sales into higher profit as net profit margin increased to 11.11 percent in December 2018 from 7.70 percent the previous year.
The Islamic lender has also utilized owners assets in generating higher profit as return on equity (ROE) moved to 6.36 percent in December 2018 from 3.92 percent the previous year while return on asset (ROA) rose to 0.76 percent in the period under review as against 0.61 percent the previous year.
Strong asset base
Total assets were up 24.22 percent to N108.46 million in December 2018 from N87.31 million the previous year; the growth in assets was largely driven by a surge 210.50 percent in Sukul Investment to N19.38 percent to N6.38 billion the previous year. Asset base also got a boost from 1.60 billion in in investment property.
Total liabilities were up 43.47 percent to N56.27 billion in the period under review from N39.22 billion the previous year. Deposits from customers were up 36.35 percent to N45.95 billion December 2018 from N33.70 billion the previous year.
The interest-free bank is on a network expansion drive, with a target to set up 40 branches as it plans to expand its branch network in the southern part of the country, with particular emphasis in Lagos, for now.
About Jaiz Bank
Jaiz Bank Plc is a national bank as well as a quoted public company, owned by over 26,000 shareholders who are spread over Nigeria’s six geopolitical zones. The Bank’s balance sheet has grown from N12 billion in 2012 to about N62 billion, with asset financing of over N30 billion.
Jaiz Bank’s customer base has grown to over 230,000 cutting across all strata of the society.
The Bank was created out of the former Jaiz International Plc which was set up in 2003/2004 as a Special Purpose Vehicle (SPV) to establish Nigeria’s first full-fledged Non-Interest Bank.
Jaiz Bank obtained a Regional Operating Licence to operate as a Non-Interest Bank from the Central Bank of Nigeria (CBN) on the 11th of November 2011 and began full operations as the first Non-Interest Bank in Nigeria on the 6th of January, 2012 with 3 branches located in Abuja FCT, Kaduna and Kano.
Meanwhile, Jaiz Bank Plc is currently trading N0.54 on the floor of the Nigerian Stock Exchange (NSE).
Jaiz Bank has been w0rking assiduously with the federal government to ensure that financial services reach the unbanked in the rural areas, as it continues to earmark funds to the growth of small enterprises in Africa’s largest economy.
“We used a number of measures to spark progress in this regard, some of which include our commitment to the development of Micro, Small and Medium Enterprises, focus on unserved markets and the financially excluded, institutional alliances, nimble workforce as well as effective performance tracking among others,” said Hassan Usman, Managing Director of the bank.
“We are having a balance sheet size that is growing by 20 per cent year-on-year and our branch network has increased from 27 to 32 and we hope to increase this to 40 branches before the end of the year,” he said.
On funding for agriculture, he said that the Central Bank of Nigeria had reviewed it’s framework of the commercial agricultural credit scheme to accommodate the funding structure of the bank.
