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Jaiz Bank generates over N2bn profit, grows earnings by 33%

Nigeria’s leading non-interest bank, Jaiz Bank Plc performed strongly in 2020 with 33 per cent growth in the top-line and the bottom-line.

Based on the interim report and accounts of the bank for the year ended December 31, 2020 released at the Nigerian Stock Exchange (NSE) at the weekend, the gross earnings rose by 32.6 per cent while profit before tax grew by 33.3 per cent. The strong bottom-line performance enabled the bank to increase net profit, in spite of provision for taxes in 2020 as against tax gain in 2019.

Gross earnings rose from N14.71 billion in 2019 to N19.6 billion in 2020. Profit before tax increased from N2.10 billion in 2019 to N2.79 billion in 2020. The bank made tax provision of N278.63 million in 2020 as against tax gain of N332.77 million in 2019. With this, net profit after tax rose marginally from N2.44 billion in 2019 to N2.51 billion in 2020. Earnings per share thus increased from 7.16 kobo in 2019 to 9.46 kobo in 2020.

Meanwhile, directors of the bank have affirmed that the bank will remain profitable with above average double-digit profit margin of 14.3 per cent in the second quarter with gross earnings of N6.43 billion within the three-month period.

Second quarter forecasts released at the NSE indicated that the non-interest bank continues to expect profitable performance across all indices.

The forecasts signed by Executive Director of Operations and Chief Finance Officer, Jaiz Bank Plc, Abdulfattah Amoo, projected gross earnings at N6.43 billion, including financing incomes of N6.07 billion and other incomes of N358.88 million within the three-month period between April and June 2021.

Financing expenses are projected at N1.23 billion, leaving net revenue from funds at N4.84 billion. Credit impairment is estimated at N750 million while net operating income is expected at N4.45 billion. With operating expenses estimated at N3.53 billion, profit before tax is projected at N918.06 million. After taxes, net profit is expected at N826.26 million.

Jaiz Bank had in a five-year projection made available earlier to the investing public forecasted that it would grow its income and profitability consecutively over the five-year period, with pre-tax profit for the period expected to be about N15.86 billion.

The management of the bank had outlined the five-year growth plan of the pioneer non-interest bank, with an assurance that it would sustain year-on-year growth over five-year period.

Managing Director, Jaiz Bank Plc, Hassan Usman, said the vision of the bank was 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.

According to the five-year financial forecast, total income was expected to be about N81.17 billion while profit after tax was projected at N11.09 billion for the five-year period. Gross income was expected to rise to N10.07 billion in 2018 and subsequently to N12.59 billion, N15.73 billion, N19.27 billion and N23.51 billion in 2019, 2020, 2021 and 2022 respectively.

Profit before tax was projected to rise to N1.33 billion in 2018 and grow consecutively to N2.03 billion, N3.01 billion, N4.03 billion and N5.47 billion in 2019, 2020, 2021 and 2022 respectively. After taxes, net profit would rise to N927 million in 2018 and grow further to N1.42 billion in 2019. Profit after tax was projected to jump to N2.11 billion in 2020 and rise consecutively to N2.82 billion and N3.83 billion in 2021 and 2022.

Balance sheet of the bank was also expected to increase over the years. Total assets was projected at N123.61 billion in 2018 and subsequently to N150.5 billion, N182.6 billion, N220.02 billion and N262.80 billion in 2019, 2020, 2021 and 2022 respectively. Deposit was projected to rise consecutively to N88.55 billion, N113.34 billion, N142.81 billion, N177.09 billion and N216.05 billion in 2018, 2019, 2020, 2021 and 2022 respectively. Shareholders’ fund was projected to rise to N28.6 billion in 2018 and grow consecutively to peak at N35.23 billion by 2022.

Shareholders’ return was also expected to grow over the years. Return on equity was expected to firm up to 4.39 per cent in 2018 and improve consecutively to 4.87 per cent, 6.92 per cent, 8.79 per cent and 11.22 per cent in 2019, 2020, 2021 and 2022 respectively.

Usman said the bank’s growth strategy of focusing 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.


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