TAJBank, a prominent non-interest financial institution in Nigeria, has successfully secured regulatory approval for the second tranche of its N100 billion Mudarabah Sukuk bond programme. This latest tranche, valued at N20 billion, aims to provide an attractive and ethically compliant investment avenue for individuals and corporate investors, promising a competitive annual return of 20.5%.
Expanding Ethical Investment Opportunities
The N20 billion Mudarabah Sukuk bond has received all necessary regulatory approvals, positioning it as a significant ethical investment option for those seeking participation in the bank’s profit-sharing ventures. This bond is designed not only to promote financial inclusion but also to offer stable returns for investors, all while strictly adhering to the principles of non-interest banking.
This new issuance comes nearly two years after TAJBank’s pioneering N10 billion Sukuk bond in 2023. That initial bond, listed on the Nigerian Exchange, marked a historic first in Nigeria’s financial landscape and was remarkably oversubscribed by 115%. This strong investor interest then, and now the launch of this second tranche, underscores TAJBank’s consistent strategy to expand its Sukuk programme, thereby broadening ethical investment opportunities for the public.
A Commitment to Profit-Sharing and Investor Trust
According to a press statement released by TAJBank, the completion agreement for the N20 billion second tranche was signed on Tuesday. The statement highlights this as another opportunity for investors to participate in an ethical instrument with a compelling 20.5% per annum return.
Alhaji Tanko Isiaku Gwamna, TAJBank’s Chairman, noted that the new Sukuk bond will empower the public to invest in a manner consistent with ethical financial practices. He emphasized that it would allow more investors to benefit from the bank’s established profit-sharing model, a core feature of its business operations.
The bank’s founder and Managing Director, Mr. Hamid Joda, had previously assured investors of good returns during the listing of the maiden N10 billion Sukuk bond in February 2023, a promise the bank has consistently fulfilled.
AVA Capital Ltd, serving as the lead issuing house for the bond, expressed strong confidence in its potential. Mr. Kayode Fadahunsi, CEO of AVA Capital, commended TAJBank's sustained success in the non-interest banking sector, reiterating that the N20 billion Sukuk bond is a crucial part of TAJBank’s overarching N100 billion programme. Fadahunsi reassured potential investors of the management’s continued commitment to meeting return expectations.
Market Outlook and Growth of Islamic Finance in Nigeria
L-R: TAJBank Limited Managing Director/CEO, Mr. Hamid Joda; Board Chairman TAJBank Limited, Alhaji Tanko Gwamna, and the bank’s Co-Founder/Executive Director, Mr. Sherif Idi; displaying the TAJBank’s signed agreement for N20Bn Mudarabah Sukuk Bond Issuance at the bank’s headquarters on Tuesday in Abuja
Investment analysts view the 20.5% annual return offered by the new Sukuk bond as an attractive proposition, particularly for those looking to diversify their portfolios with ethical investments. It is expected to draw significant interest from investors seeking stable returns in an economic climate where traditional investment yields may be lower.
Industry projections further bolster the positive outlook for Islamic finance in Nigeria. Fitch Ratings previously indicated that Nigeria’s Islamic finance industry is poised for expansion from the second half of 2025 through 2026. This anticipated growth is driven by increasing sovereign sukuk issuances and the steady expansion of Islamic banking assets, fueled by new paid-in capital requirements and regulatory efforts aimed at developing the industry.
Fitch’s data also reveals robust growth in non-interest banks’ assets, which recorded a remarkable 110% year-on-year increase by the end of 2024. This surge was primarily propelled by a substantial increase in deposits and loans, both more than doubling in value.
Additionally, the Debt Management Office (DMO) recently announced that the Federal Government has successfully recorded a total of N2.205 trillion in subscriptions through its Sovereign Sukuk since its inception in 2017. This represents an impressive oversubscription of 735%, clearly demonstrating the strong and growing investor appetite for Sharia-compliant instruments within Nigeria’s debt capital market. TAJBank's latest Sukuk issuance capitalizes on this burgeoning interest and reinforces its position as a key player in the nation's non-interest banking sector.