Onome Amuge
Jaiz Bank is positioning itself as a notable beneficiary of Nigeria’s financial sector, using the mechanics of non-interest banking to extract growth at a time when conventional lenders are facing margin compression, liquidity stress and rising credit risk.
An earnings forecast filed with the Nigerian Exchange Group (NGX), indicates that the Abuja-based lender expects an improvement in profitability in the first quarter of 2026, reflecting both balance-sheet expansion and a business model that has proved more resilient than many of its peers in a volatile macroeconomic environment. Gross earnings are projected at N30.72 billion for the three months to March, almost entirely driven by financing and investment income of N29.39 billion, underlining the centrality of Shariah-compliant asset growth to the bank’s strategy.
The forecast offers a window into how non-interest banks are adapting to Nigeria’s prolonged period of high interest rates and tight liquidity. While rising benchmark rates have increased funding costs and dampened credit demand for conventional lenders, Jaiz Bank appears to be benefiting from strong appetite for profit-sharing investment accounts and asset-backed financing structures that are less sensitive to rate volatility. After paying N8.67 billion in profit to investment account holders, the bank expects net revenue from funds of N20.72 billion, signalling an ability to preserve spreads even as competition for deposits intensifies across the sector.
This performance also highlights a structural shift within Nigeria’s banking industry. Ethical and non-interest banking, once a niche segment, has gained traction among corporates and retail customers seeking alternatives to interest-based products amid economic uncertainty. Jaiz Bank’s forecast showcases that this demand is translating into scale, allowing it to grow financing volumes without taking on disproportionate risk.
The bank’s outlook points to a relatively benign credit environment within its portfolio. Expected credit impairment charges of N186.6 million are considered modest by industry standards, particularly given persistent foreign exchange volatility, high inflation and weakening consumer purchasing power. The figure implies improved asset quality and conservative underwriting, a notable contrast with the rising loan-loss provisions reported by several conventional lenders exposed to heavily leveraged corporates and import-dependent sectors.
Operationally, however, the forecast underscores the same pressures confronting the wider banking system. Operating expenses are projected at N14.62 billion, absorbing a substantial share of revenue. Personnel costs, energy expenses and regulatory compliance continue to weigh on profitability, reflecting Nigeria’s structurally high cost base and the challenges of scaling operations efficiently. Even so, Jaiz Bank expects net operating income of N21.86 billion and profit before tax of N7.24 billion, translating into profit after tax of N6.51 billion.
If delivered, this would reinforce the bank’s reputation as one of the faster-growing players in the non-interest segment, though the sustainability of that growth will hinge on management’s ability to contain costs as the franchise expands. Analysts note that as non-interest banks mature, efficiency ratios and technology investments will become increasingly critical differentiators.
Concerning cash flow projections, Jaiz Bank anticipates net cash generation from operating activities of N68.94 billion, pointing to strong underlying inflows and improved working capital management. Operating cash flow before changes in working capital is estimated at N8.37 billion, while investing activities are expected to absorb N18.95 billion, likely reflecting continued expansion of financing assets and spending on digital infrastructure.
Despite a projected net decrease of N49.99 billion in net cash and cash equivalents over the period, the bank’s liquidity position remains robust. Cash and bank balances are forecast to increase to N521.53 billion by the end of March 2026, up from N471.54 billion at the start of the quarter.
For investors, the forecast reinforces the narrative that non-interest banking is emerging as a credible growth avenue within Nigeria’s constrained financial system. According to Business a.m analysis, Jaiz Bank appears well placed to capitalise on this shift, but its longer-term appeal will depend on whether it can translate earnings momentum into consistent shareholder returns while navigating cost inflation, regulatory demands and an economy that remains exposed to policy uncertainty and external shocks.
