TAJBank Set For N100bn Sukuk Bond Issuance, Lists Benefits
- Targets N30bn capital base by December 2022
BY EDMOND ODOK – TAJBank Limited is set to fulfill its promise of issuing the first-ever non-interest private Sukuk bond offer in the nation’s capital market with the formal signing of documents by all parties to kick-start the bank’s N100 billion Sukuk bond issuance.
Accordingly, the Bank, which is Nigeria’s leading non-interest lender, has secured all regulatory approvals required for opening the Sukuk to the general public with the bond also slated for listing on the Nigerian Exchange.
Speaking at the historic event in Abuja, the Managing Director and Chief Executive Officer of the bank, Mr Hamid Joda, described the latest investment initiative as a very important milestone in the annals of Nigeria’s capital market development and assured investors of good returns on their investment in the TAJBank Sukuk bond.
Joda said; “The Sukuk bond issuance by TAJ Bank is a very important milestone in the history of Nigeria’s capital market. I believe that after this issuance, we will see a number of companies in the Nigerian market coming out to issue Sukuk bonds and that will lead to the deepening of the non-interest market and eventually economic development of Nigeria.
“My message to the investing public is to take advantage of the opportunity in view of its potential for good returns. The instrument is coming out at an expected rate of 15 percent. It is also an ethical instrument and there are very few ethical instruments out there and I believe a lot of investors are looking for instruments that have ethical leaning.”
Also commenting on the development, TAJBank’s Executive Director, Mr. Sheriff Idi, stressed the Sukuk bond’s importance to their operations, and capacity to provide financial support to needy enterprises with the attendant positive implications for the nation’s economic growth.
He said the bank has, in the last two years of its operations, raised additional capital besides the Sukuk issuance, adding that; “With the Sukuk bond issuance, we wanted to raise TAJ Bank’s capital base to about N30 billion by the end of the year and that means we can now finance those sectors that probably some initially thought we cannot provide funding support. That is the essence of this Sukuk bond issuance.”
Recalling that the Bank’s capital base or finance obligor element was quite little at the commencement of business about two years ago, Idi noted that the development limited its financial support to people and businesses that approached it for funding support for either importation, transportation, or other sectors.
However, he said the Bank’s improved capital base and other positive financial trajectory recorded over the last two years, especially the latest Sukuk bond issuance, have now fully positioned it to surpass public expectations in its capacity to support business owners and ensure improved returns to shareholders and more positive impact on the economy.
“In the last two years of the bank’s operations, we have raised additional capital apart from the Sukuk we are issuing now. With the Sukuk bond issuance, we wanted to raise TAJ Bank’s capital base to about N30 billion by the end of the year and that means we can now finance those sectors that probably some initially thought we cannot provide funding support. That is the essence of this Sukuk bond issuance”, the Executive Director added.
On his part, the Board Chairman, Alhaji Tanko Isiaku Gwamna, spoke on the multidimensional ways the Sukuk bond will benefit investors and the nation’s economy, saying; “The impact of the Sukuk bond on the economy is that we are trying to provide more liquidity for the economy and return on the investment is very favourable in such a way that we’re virtually competing even more than what is available in the market because its potential returns on investment is going to be very huge to investors.
“The funds raised through the Sukuk bond and innovative deployment to needy sectors of the economy will help to create jobs, boost economic activities and improve the non-interest banking sector’s contributions to the nation’s Gross Domestic Product (GDP) growth in the years ahead”.
Earlier in his remarks, Chairman/CEO of Buraq Capital Limited, Alhaji Mohamed Mustapha Bintube, recalled how TAJ Bank secured its licence from the monetary authorities as well as the remarkable performance since coming on the the nation’s financial sector.
He tasked the Bank’s management “to continue delivering on various innovative products and services the lender has been known for with a view to sustaining this bank at the forefront of the non-interest banking sub-sector in the years ahead”, adding; “In this volatile environment, your ability to innovate is very important. Tenacity and focus are also crucial to your marketing drive.
“I think if I may summarize, the officers in the bank’s management team believe in themselves, in innovation, tenacity and their faith in God and themselves. I think that is what brought us here today. I am very happy and proud to be associated with this team.”
Highlighting the bond’s importance to the economy, Managing Director of Greenwich Merchant Bank, Issuing House for the bond, Mr. Bayo Rotimi, said; “We are doing something new here today. This is an innovative instrument, obviously the first time by a non-interest bank and it is an alternative way through which Tier 1 capital can be raised.
“It is important for innovation to happen in our capital market. Hopefully, this Sukuk bond offer will continue to broaden the market. We strongly believe that the Nigerian financial market will benefit from the non-interest bank’s trail-blazing investment initiative.”
For the Sharia Adviser to TAJ Bank and CEO of One17 Capital Market, Alhaji Attahiru Maccido, the bank’s board and management deserve praised on the additional Tier 1 offer on the Nigerian Exchange in view of its benefits to investors, businesses, the equities market and the economy.
