TAJBank to kick off N100bn Sukuk bond issuance, lists benefits

TAJBank Limited, Nigeria’s leading non-interest lender, has formalized the kickoff of the bank’s N100 billion Sukuk bond issuance with the signing of all parties for issuance of the first-ever non-interest private Sukuk bond offer in the nation’s capital market.

The Bank has secured all regulatory approvals required for opening the Sukuk to the general public and the bond will be listed on the Nigerian Exchange.

Speaking during the epoch-making event at the bank’s headquarters in Abuja, the bank’s Managing Director/Chief Executive Officer, Mr. Hamid Joda, described the bank’s 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.

He explained: “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 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”, Joda assured.

In his remarks, the bank’s Executive Director, Mr. Sheriff Idi, also stressed the importance of the Sukuk bond to the TAJ Bank’s operations, capacity to provide financial support to needy enterprises with the attendant positive implications for the nation’s economic growth.

The non-interest banking expert clarified: “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.”

Idi recalled that when the bank commenced business about two years ago, its capital base or finance obligor element was little and that this limited the bank’s financial support to people and businesses that approached it for funding support for either importation, transportation or other sectors.

However, he explained that in view of the lender’s improved capital base and other positive financial trajectory recorded over the last two years, especially the latest Sukuk bond issuance, TAJ Bank would be fully positioned to surpass public expectations in its capacity to support business owners and ensure improved returns to shareholders and more positive impact on the economy.

He added: “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 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”, Idi added.

The bank’s Chairman, Alhaji Tanko Isiaku Gwamna, also spoke on the multidimensional ways the issuance of the Sukuk bond will benefit investors the nation’s economy.

He explained: “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 sub sector’s contributions to the nation’s Gross Domestic Product (GDP) growth in the years ahead”.

Earlier in his remarks, the Chairman/CEO of Buraq Capital Limited, Alhaji Mohamed Mustapha Bintube, recalled how TAJ Bank secured its licence from the monetary authorities and its remarkable performance since it debuted and charged the management “to continue deliver 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.

The investment expert said: “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 belief 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.”

Speaking on the importance of the bond to the Nigerian economy, the Managing Director of Greenwich Merchant Bank, the 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 by TAJ Bank 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”, he added.

The Sharia Adviser to TAJ Bank and CEO of One17 Capital Market, Alhaji Attahiru Maccido, commended the bank’s board and management on the additional Tier 1 offer on the Nigerian Exchange in view of its benefits to investors, businesses, the equities market and the economy.