By TRW Research,
Based on unaudited FY2019 financial statement, Jaiz Bank Plc has >110% increment in PAT compared to FY2018 with CBN cash reserve of >N42bln (>90% increment compared to FY2018). Unfortunately, Jaiz does not have a tradition of dividend payments.
Insider information (based on its FY2019 earnings of 6.06 kobo) claims that Jaiz management promised last year to pay at least 50% dividend payment in 2020 => an estimated dividend pay of about 3 kobo/share thus a current dividend yield of 4.62% p.a, just above the market average of 4%. Notwithstanding it’s low dividend yield in comparison with T-1 Banks of av. 10%, TRW Research Team still maintains it’s ”buy” recommendation on JaizBank.
We suspect that the reason for the low dividend payment is the lack of retainer (zero re-investment) attitude among majority of Northern Nigerian investors thus it is not in JaizBank’s interest to pay excessive dividends even with it’s very high cash reserve level.
Take note that Jaiz Bank is the original Islamic Private Infrastructure Bank in Nigeria with >N41bln invested in FGN Sukuk Bonds #1 & #2. Insider information claim that DMO will be issuing Sukuk Bond #3 this February – 2020 with a double-digit coupon. JaizBank is well placed to be a major investor in the successful placement of the coming Sukuk #3.