• Sat. Jun 10th, 2023

    Jaiz Bank set to transition into an HoldCo; to raise fresh N150bn


    Aug 16, 2022

    By Bassey Udo

    After a decade of operations as Nigeria’s pioneer non-interest bank, Jaiz PLC says it has commenced the process of transitioning into an Holding Company (HoldCo).

    The Chairman of the Board of Directors of the Bank, Umar AbdulMutallab, disclosed this on Tuesday at the 2022 Annual General Meeting held as part of its 10th anniversary celebrations in Abuja.

    AbdulMutallab was responding to requests by shareholders during the meeting urging the bank to take steps to immediately convert to a HoldCo, to take advantage of the numerous benefits associated with it.

    He confirmed that the management of the bank has already commenced the process to actualize the shareholders’ wishes.

    Part of the process, he said, includes getting the mandatory regulatory approvals for the transition.

    Also, he said the entire process was being handled by a committee mandated to pursue transition agenda.

    For a start, the Chairman of the Bank said the management hopes to start the HoldCo transition process with four companies, with others to come later.

    Apart from Jaiz HoldCo, the Chairman said the others would include Jaiz Insurance, Jaiz Capital and Jaiz FinTech.

    Considering the importance of FinTec in modern banking, he said the Bank intends to make significant investments in fintech infrastructure to take its mobile banking operations to the next level.

    In operating the HoldCos, the Chairman said more opportunities would be created for more women representation in both the Board of bank and its subsidiaries.

    To provide the necessary funding for the recapitalization of the Bank and the HoldCos, the Chairman said the Bank was also in the process of raising N150 billion, either through SUKUK or other forms of bonds.

    “The N150 billion will not be an outright raising, but in series.
    The funds realised would be deployed into the recapitalization of the Bank and all the HoldCos each of which would require at least N50 billion.

    “Even the share capital of the bank is still not up to that amount. If the Bank wants to go into insurance (Takaful) HoldCo, there is a minimum capital base set by NAICOM (National Insurance Commission), the same thing as Pension Funds administration,” the Chairman said.

    The Chairman further clarified that the new fund raising would not be needed all in one go, but in series, depending on the demand.

    On the request by shareholders for more branches of the bank across the country, particularly in Delta and Edo States, he said with 45 branches already operational in different parts of the country, the Bank plans to open more branches soon.

    However, he said the management would adopt a cautious approach in setting up more branches, considering the cost intensive nature of such an exercise.

    “With FinTech in operation, the Bank intends to rely more on the mobile platforms, to reduce dependence on the physical or brick and mutter branches.

    “With FinTech, customers can use their systems, phones to transact business from any location in the country”, he said.

    During the meeting, the Bank approved a total of N1.38 billion as dividend to all its
    shareholders for the year ended December 31,2021.

    The dividend payout translates to N0.04 kobo per ordinary share of 50 kobo each, which was unanimously approved by the shareholders during the meeting.

    The latest dividend is the third payout by the Bank to its shareholders since 2019.

    The Chairman of the Bank said the dividend payout, which grew from N0.03k in 2020, was as a result of the growth recorded in its operations during the year.

    Abdulmutallab said the public perception of Jaiz Bank brand has continued to improve significantly, resulting in the award of “the most-improved Islamic Bank in the world by the United Kingdom based-GIFA for a second year in a row.”

    The Bank’s audited financial results for the year showed a 43 percent growth in profit before tax (PAT), from N3.07 billion in December 2020 to N4.37 billion.

    The profit followed an increase by 31.76 percent in gross income, from N19.61 billion in 2020 to N25.84 billion in 2021.

    Also, the Bank’s total asset grew by 19.55 percent, from N233.60 billion to N279.28 billion, while shareholders’ funds grew by 36.20 percent, from N17.85 billion to N24.31 billion.

    Earnings per share for the period increased by 40.10 percent from 9.85 kobo in 2020 to 13.80 kobo in 2021.

    Despite the tough operating operating environment characterized by weak economic growth as a result of the negative impact of COVID-19, the Managing Director/CEO, Hassan Usman, said the Bank achieved a lot in terms of financial stability.

    “Our external credit rating, for instance, has materially improved over the past 12 months. Three rating agencies (Fitch Rating, GCR Rating, and Agusto Rating) all gave the Bank investment grade rating of BBB/BBB-”, he said.

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