TAJBank Seeks N20bn in Second Sukuk Bond Issuance

TAJBank, a non-interest bank in Nigeria, on Tuesday, signed a completion agreement for the second tranche of its N100 billion Sukuk bond programme.

According to a statement by the bank on Wednesday, it is aiming to raise N20 billion from the new issuance, nearly two years after it launched a N10 billion Sukuk bond in 2023, which was oversubscribed.

The new bond, approved by regulators, offers a 20.5 per cent return per year. It is structured as a Mudarabah Sukuk, a type of Islamic finance instrument where investors share in profits rather than earn interest.

Sukuk bonds are typically backed by assets or ventures and are designed to comply with Islamic financial principles. In Nigeria, the market for such instruments has grown slowly but steadily, supported by regulators like the Central Bank of Nigeria and the Securities and Exchange Commission.

TAJBank’s Chairperson Tanko Gwamna said the offer was aimed at attracting ethical investors.
“The offer of the N20bn Mudarabah Sukuk to the market is to avail members of the public an investment opportunity that aligns with ethical financial principles.

“As the Board and management of our bank demonstrated in the maiden issuance of the bank’s Sukuk, the offer of the new N20bn Sukuk bond on the NGX will enable a wider range of investors to participate in our growth and benefit from our profit-sharing model,” he assured.

The bank said the bond will be listed on the Nigerian Exchange (NGX) and is open to both individuals and corporate investors.

AVA Capital Ltd is the lead issuing house.

Its CEO, Kayode Fadahunsi, said “We are very excited to be part of TAJBank’s success story in the non-interest banking industry, which is being consolidated upon with the planned issuance of its N20bn Mudarabah Sukuk in the NGX as part of its N100 billion programme.”