TAJBank, Nigeria’s non-interest lender, has received approval for the second tranche of its N100 billion Mudarabah Sukuk bond programme, valued at N20 billion.
According to a press statement sent to Nairametrics on Tuesday, the N20 billion Mudarabah Sukuk bond has been granted all necessary regulatory approvals and is designed to provide an ethical investment option for those interested in the bank’s profit-sharing ventures.
The bond, which offers a 20.5% annual return, aims to promote financial inclusion and offer stable returns for investors while adhering to non-interest banking principles.
Two years after first Sukuk Issuance
This new N20 billion Sukuk bond comes nearly two years after the issuance of TAJBank’s first-ever N10 billion Sukuk bond in 2023. The initial bond, listed on the Nigerian Exchange, was the first of its kind in Nigeria’s financial history.
It was oversubscribed by 115%, reflecting strong investor interest and the bank’s ability to meet its commitment to ethical financial practices.
The launch of this second tranche affirms TAJBank’s ongoing strategy to expand its Sukuk programme, aimed at providing ethical investment opportunities to the public.
The statement read, “TAJBank, Nigeria’s leading non-interest lender, on Tuesday signed the completion agreement for the N20 billion second tranche of its N100 billion Mudarabah Sukuk bond programme.
“The latest investment initiative of the multiple award-winning non-interest lender, which is coming after about two years following the issuance of the first-ever N10 billion Sukuk bond on the Nigerian Exchange in 2023, presents another opportunity for individuals and corporate investors to stake their funds in an ethical instrument with a competitive 20.5% per annum return.”
In the press statement, TAJBank’s Chairman, Alhaji Tanko Isiaku Gwamna, noted that the new Sukuk bond would allow the public to invest in a manner consistent with ethical financial practices.
He highlighted that the bond would also give more investors the chance to benefit from the bank’s profit-sharing model, which has been a feature of its business model.
The statement also read, “It would be recalled that TAJBank’s Founder/Managing Director, Mr. Hamid Joda had, during the beating of the Gong on the listing of the Bank’s maiden N10 billion Sukuk bond on the NGX in February 2023, which was over-subscribed by over 115%, assured investors of good returns on their investments and the Board has been fulfilling the promise since then.”
Partnership with AVA Capital Ltd
AVA Capital Ltd, the lead issuing house for the bond, expressed confidence in the bond’s potential. CEO Mr. Kayode Fadahunsi remarked on the bank’s continued success in the non-interest banking sector, stating that the N20 billion Sukuk bond is an important part of TAJBank’s larger N100 billion programme.
Fadahunsi reassured potential investors that the bank’s management would continue to meet expectations in terms of returns.
The statement also noted that investment analysts have suggested that the 20.5% annual return offered by the new Sukuk bond is an attractive proposition, especially for those seeking to diversify their portfolios with ethical investments. The bond is expected to appeal to investors looking for stable returns in an economic environment where many traditional investments offer lower yields.
What you should know
- Fitch Ratings earlier noted that Nigeria’s Islamic finance industry is likely to expand from the second half of 2025 through 2026 on the back of increasing sovereign sukuk issuances and Islamic banking assets, driven by new paid-in capital requirements and regulatory moves to develop the industry.
- According to Fitch, non-interest banks’ assets recorded a growth of 110% year-o-year as of end-2024, driven by a significant increase from deposits and loans, each more than doubling in value.
- Also, after a two-year break, the Debt Management Office (DMO) announced that the Federal Government has successfully recorded a total of N2.205 trillion subscriptions through the Sovereign Sukuk since its debut in 2017, representing an oversubscription of 735%, demonstrating strong investor appetite for sharia-compliant instruments in Nigeria’s debt capital market.
