Jaiz Bank

By AYOOLA OLAOLUWA

A new entrant in the Nigerian non-banking market, Lotus Bank, is steadily gaining ground on market leaders, Jaiz Bank Plc and TajBank Limited, by taking out a significant portion of their business and individual accounts, Business Hallmark findings can reveal.

Across the nation, the bank is rapidly changing the face of non-interest banking by innovating consumer financial services and creating digital systems and infrastructure, thereby building trust among customers.

It would be recalled that the market leader, Jaiz Bank, took the nation by storm in 2012 when it received an operating license from the Central Bank of Nigeria (CBN) as a regional bank with offices and branches in Kano, Kaduna and Abuja as Nigeria’s first non-interest bank.

It soon grew in bounds, expanding to all the 36 states capitals and major cities after the CBN approved its application to transform into a national bank.

From a modest institution with total assets valued at US$88.8million; deposits base of N3.5billion, shareholders’ equity of about US$63.6million, balance sheet of N12billion and 3 branches in 2012, the bank as at September 2021, has a total assets of N250billion; deposit base of over N60billion; 40 branches; balance sheet of N62 billion; asset financing of over N30 billion; over 1 million customer base and Profit After Tax (PAT) of N1.99billionattheendofJune2021.

TAJ Bank was also given a licence by the CBN in 2019 to operate non-interest banking under the Islamic banking principles, seven years after Jaiz started operations.

As of December 2020, the bank operated four branches in FCT Abuja, the National Assembly Complex, Abuja, Kano and Sokoto States, totalassetsofN10billion, Profit Before Tax (PBT) of N3.456billion in its 2020 financial year, deposit growth rate of 1,524 per cent and customer base of 103,853, from 1,809 at inception.

In 2020, the bank was appointed by the Federal Government to act as receiving agent for its N150 billion Sukuk Bond, the first time in the firm’s history.

However, Lotus Bank’s entry into the fray has distorted the status quo, and has put a major dent in Jaiz and TAJ’s balance sheets, with the bank (Lotus) now controlling a major chunk of the market hitherto controlled by the two.

Founded in July 2021 by Mrs. Hajara Adeola, wife of the former Group Managing Director of Guarantee Trust Bank (GTB) Mr. Fola Adeola, the bank within one year of commencing operations from its headquarters in Victoria Island has entrenched itself as the bank of preference in the South Western part of the country.

According to impeccable sources in the bank, its management decided to largely focus on its niche market, the South West.

“The founders hope to use their expertise and influence as sons and daughters of Yorubaland to gain control of the South West market. Though, Jaiz and TAJ started first as non-interest banks, Lotus Capital, owned by the Adeolas, was the pioneer of non-interest finance in Nigeria.

The firm used to organise non-interest funding for interested individuals and businesses. It even played a major role in the establishment of Jaiz and TAJ, controlled by northern business concerns, which before now controlled the South West market.

“But the coming of Lotus has changed the narratives. In just over one year of coming on board, the bank has displaced Jaiz in the South West, and is doing relatively well in Abuja due to its deployment of technology”, one of the sources who craved anonymity told BH.

In a bold move to take the bank directly to the doorsteps of people in the South West, the banks is establishing branches and offices in major towns and cities in the zone.

Apart from its flagship headquarter located in the upscale Adetokunbo Ademola Street in Victoria Island, Lagos, the bank recently opened three other branches in the state. They are the Idumagbo, Lagos Island, Allen Avenue, Ikeja and Terminal 2, Oshodi Transport Interchange, Oshodi branches.

The bank specialise in three major areas, ethical banking, Islamic finance and investment, deploying digital technology to help its customers experience banking with ease.

Also, apart from issuing free debit cards to account holders with zero-account maintenance charges, the bank’s digital offerings enable customers to open accounts online and transact business through USSD banking.

The bank is also sweeping the carpet off the feet of her competitors by operating Hajj Saving Schemes for Muslim pilgrims nationwide.

BH reliably gathered that the pilgrims’ boards of all the six South Western states have retained the bank as the preferred banker for all Hajj related matters.

The bank’s greatest strength is in the array of professionals that pilot its affairs. The team is led by its Managing Director/Chief Executive Officer, Mrs. Kafilat Araoye, a thoroughbred professional with over 25 years of commercial banking experience.

The bank’s Divisional Head, Corporate Services (Human Resources, Brand and Marketing Communications), Funso Tooki, said the bank started its operations on a solid foundation of experienced leadership and a strong advisory council of experts.

“Our focus and guiding principle is to deliver an alternative option to interest-based banking and to cater to the needs of not just the banked but also the under-banked and unbanked population.

“Non-Interest Banking is geared towards supporting the real sector and LOTUS Bank aims to improve financial inclusion in the country. In addition, the bank will operate transparent pricing models as is the norm in non-interest banking”, Tooki said.

Also speaking, the bank’s CEO, Kafilat Araoye, said Lotus Bank was set up with the aim of financially embracing all classes of people.

“With evolving digital solutions and a millennial generation coming into centre-stage, LOTUS Bank is bringing onboard innovative and comprehensive non-interest compliant financial solutions in investment banking, consumer banking, asset management, private banking, and wealth management.

“At LOTUS Bank, we believe in fairness to all parties in every business transaction. This is a requirement for building a strong economy.

“Everyone can thrive where fairness prevails. Non-interest banking stands for equity and ethics in business, as well as growth for the real sector.

  • “Financial Inclusion is also a strong motive for setting up LOTUS Bank. The concept of financial inclusion targeting the unbanked and under-banked population cannot remain just a concept but must be seen as an actual necessity for the nation’s economic growth,” Araoye stated.

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