Nigeria’s premier and largest non-interest bank, Jaiz Bank Plc, has completed pre-issuance processes for a N10.05 billion private placement as part of a multi-prong strategic recapitalisation aimed at strengthening the capital base of the bank.
At the completion board meeting on Thursday in Abuja, the board of the bank and parties to the issuance signed off the offer documents, after securing prior approvals of shareholders and relevant regulators.
Jaiz Bank is issuing 10.048 billion ordinary shares of 50 kobo each at N1 per share to private investors.
Chairman, Jaiz Bank Plc, Alhaji Mohammed Bintube, said the private placement was in line with the bank’s target to sustain its growth trajectory and ensure it remains well-capitalised in line with its capital management strategy.
He said the net proceeds of the capital raising exercise will be deployed to improve service delivery on the bank’s various platforms.
According to him, the additional capital would support the bank’s growth drive to achieve its five-year strategic objectives.
“Qualified investors should take advantage of this opportunity to invest as the bank seeks to expand to other financial services via a financial holding company structure subject to regulatory approval in the future,” Bintube said.
He added that the bank would soon provide opportunity to existing shareholders to invest additional capital in the bank through a rights issue.
Regulatory filing at the Nigerian Exchange (NGX) indicated that Jaiz Bank plans to float a rights issue of about 5.41 billion ordinary shares of 50 kobo each at offer price of N1 per share. The rights issue will be pre-allotted on the basis of 87 new ordinary shares for every 250 ordinary shares held as at the close of business on Friday, October 6, 2023.
Global rating agency, Fitch Ratings, in its latest ratings of Nigerian banks, affirmed Jaiz Bank as one of the several Nigerian ¹macroeconomic challenges.
In its latest ratings report, Fitch affirmed Jaiz Bank’s ratings of Long-Term IDR at ‘B-‘ as well as the National Long-Term Ratings with Stable Outlook.
According to Fitch, the affirmation of the bank’s Long-Term IDRs and National Ratings reflects the rating agency’s view that the bank is likely to remain compliant with its respective regulatory minimum capital adequacy ratio (CAR) requirements despite the devaluation, with sufficient buffers and pre-impairment operating profits to tolerate a further moderate naira depreciation and the second-order effects of a challenging economic environment on loan quality.
The report noted that the IDRs and National Ratings of Jaiz Bank was driven by its “standalone creditworthiness”, as expressed by its viability rating (VRs).
Jaiz Bank has projected significant growths in incomes and profitability in the first quarter of 2024 with increasing operating efficiency expected to add nearly a quarter to the bank’s profit-making capability.
In its latest forecast, the management of the bank indicated that pre-tax profit margin could rise to 27.82 per cent in the first three months of 2024, about eight percentage points above 20.22 per cent recorded in its last interim report and accounts for the third quarter 2023. Post-tax profit margin is expected at 25.03 per cent in first quarter 2024.
The forecast, obtained at the NGX, projected profit before tax of N4.78 billion, with gross earnings expected at N17.18 billion for the three-month period ended March 31, 2024. Profit after tax is estimated at N4.3 billion.
The forecast outlined a robust earnings outlook for the bank as it continues to expand its operations and consolidate market share
