Jaiz Bank eyes N10.05b from private investors

Jaiz Bank Plc, Nigeria’s pioneering and largest non-interest financial institution, successfully concluded the preliminary stages for a N10.05 billion private placement, marking a significant step in its comprehensive strategic recapitalization plan.

This strategic move, aimed at bolstering the bank’s capital base, was finalized during a board meeting held recently in Abuja, where the board and relevant stakeholders endorsed the offer documents after obtaining necessary approvals from shareholders and regulatory bodies.

The private placement involves the issuance of 10.048 billion ordinary shares, each valued at 50 kobo and offered at a price of N1 per share to private investors. Alhaji Mohammed Bintube, Chairman of Jaiz Bank Plc, emphasized that this initiative aligns with the bank’s commitment to sustaining its growth momentum and ensuring a solid capitalization structure. The funds raised from this exercise will be channeled towards enhancing service delivery across the bank’s diverse platforms.

Bintube highlighted that the additional capital infusion will play a crucial role in supporting the bank’s strategic growth objectives over the next five years. He encouraged qualified investors to seize the opportunity to invest, emphasizing the bank’s plans to diversify into other financial services through a financial holding company structure, pending regulatory approval.

Furthermore, Jaiz Bank intends to offer existing shareholders the chance to participate in the bank’s growth trajectory through a forthcoming rights issue. As per regulatory filings with the Nigerian Exchange (NGX), the proposed rights issue will involve approximately 5.41 billion ordinary shares at a price of N1 per share. Shareholders will be pre-allotted 87 new ordinary shares for every 250 shares held as of the market close on Friday, October 6, 2023.

In a recent assessment, global rating agency Fitch Ratings affirmed Jaiz Bank’s creditworthiness, noting its stable business outlook amidst prevailing macroeconomic challenges. The agency maintained the bank’s Long-Term IDR at ‘B-‘ and its National Long-Term Ratings with a Stable Outlook. Fitch’s affirmation reflects confidence in Jaiz Bank’s ability to remain compliant with regulatory capital adequacy ratios, backed by sufficient buffers and solid pre-impairment operating profits, even in the face of currency devaluation and economic headwinds.

Jaiz Bank’s management has forecasted significant growth in revenues and profitability for the first quarter of 2024, driven by improving operating efficiency. The bank anticipates a pre-tax profit margin of 27.82%, marking a notable increase from the 20.22% recorded in the previous quarter of 2023. Gross earnings are projected at N17.18 billion, with an estimated post-tax profit of N4.3 billion for the quarter ending March 31, 2024.

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