Nigeria’s non-interest bank, TAJBank, has announced plans to issue a N20 billion Mudarabah Sukuk bond as part of its strategy to bolster its Additional Tier 1 capital.
The announcement was made by the bank’s Founder and Chief Executive Officer, Mr. Hamid Joda, in a statement on Monday.
According to Joda, the issuance is part of TAJBank’s N100 billion Sukuk programme designed to drive the bank’s business expansion.
He noted that this new initiative follows the successful issuance of the first-ever N10 billion Sukuk bond on the Nigerian Exchange in 2023.
The proposed bond offers a unique opportunity for investors, providing a competitive 20.5% annual return.
“Specifically, the new Mudarabah Sukuk bond is designed to offer a stable and ethical investment option. It allows investors to participate in the bank’s profit-sharing ventures and underscores TAJBank’s commitment to expanding access to innovative financial solutions and promoting financial inclusion in the country,” Joda said.
Source of extra income
The Mudarabah Sukuk bond is open to both individual and corporate investors. Joda emphasized the bank’s goal to provide a reliable source of extra income that can be easily accessed.
“We are excited to bring this Mudarabah Sukuk to the market, offering a compelling investment opportunity that aligns with ethical financial principles. This listing on the NGX will enable a wider range of investors to participate in our growth and benefit from our profit-sharing model,” he added.
Joda encouraged interested investors to contact their financial advisors or visit the bank’s website for more information on the Sukuk and the listing process.
What you should know
In recent developments, the Nigerian Exchange Limited (NGX) admitted TAJBank’s N10 billion Sukuk Mudarabah on its platform last month, commemorating the event with a closing gong ceremony.
- Speaking at the occasion, the Divisional Head, Capital Markets, NGX, Mr Jude Chiemeka commended the efforts of TajBank’s leadership and the parties to the issue — Greenwich Merchant Bank, Lead Issuing House; 117 Capital & Buraq Capital, Joint Sharia Advisers; and United Capital, Brokers —on the transaction.
- The N10 billion issuance, which carries a 15% annual return, represents an innovative blend of equity and debt and serves as Additional Tier 1 Capital. It is the first of its kind in Nigeria, marking a major milestone in the country’s Islamic finance landscape.
Operating under Islamic banking principles, TAJBank has positioned itself as a pioneer in the non-interest banking sector. The N10 billion Sukuk Mudarabah was raised under the bank’s N100 billion Sukuk programme, aimed at strengthening its capital adequacy ratio and supporting future growth.
