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Jaiz Bank Plc, the non-interest and Islamic lender, has surmounted most its infancy challenges as first quarter profit surged amid lower oil price, rising inflation and a weak currency.
For the first three months through March 2017, Jaiz Bank’s net income surged by 175.83 percent to N203.79 million from N73.84 million the previous year.
Total revenues jumped 34.58 percent to N1.44 billion, underpinned by a 76.30 percent rise in total profit from Murabaha Transactions to N794.37 million.
Jaiz Bank’s net margin, a measure of a profitability and efficiency increased to 14.14 percent in March 2017 as against 6.84 percent as at March 2016.
The strong net margins means the lender is able to translate top line (sales) impressive performance to bottom line growth (profit).
The Islamic Bank’s cost to income ratio (CIR), a measure of efficiency, fell to 86.11 percent in the period under review as against 93.45 percent as of March 2016.
A lower CIR ratio means a bank is efficient.
While conventional banks are grappling with rising Non Performing Loans (NPLs) as a result of exposure to the oil and gas, Jaiz Bank’ has less exposure to such risks because the Islamic lender’s balance sheet is heavy with assets it created in the real estate area.
However the Non interest Bank was squeezed by a dollar scarcity as its customers depend on the U.S currency to pay school fees, medical bills or travelling expenses for holiday, manufacturing or importation of heavy materials and equipment to expand their businesses.
Further analysis of Jaiz Bank’s financial statement shows return on equity (ROE) increased to 1.45 percent in the period under review from 0.65 percent the previous year.
Total operating expenses moved by 24 percent to N1.24 billion in March 2017 as against N1 billion the previous year.
Jaiz bank started with a share capital of about N5billion in 2012, but today its capital has hit N14.73 billion.
The non-interest lender had three branches in 2012. Today it has about 30 branches. Total customer current deposit increased by 52.27 percent to N33.09 billion in March 2017 from N21.73 billion as at March 2016.
Jaiz bank’s balance sheet has been growing. The balance sheet has been growing at an average of about 30 per cent since 2012.
For instance, total assets jumped by 34.12 percent to N78.69 billion in the period under review while to shareholders’ fund moved by 32.53 percent to N14.91 billion in the period under review.
