TAJ Bank lists ₦10bn Sukuk bond on NGX

TAJ Bank, a leading non-interest banking services provider, recently made a groundbreaking move by listing a 10-billion-naira Sukuk bond under its 100-billion-naira Sukuk Issuance Programme on the trading floor of the Nigerian Exchange Limited (NGX). This marked a significant milestone as TAJ Bank became the first corporate entity to list a Sukuk bond on the exchange. In an exclusive interview with CNBC Africa's Akin Obakeye, Hamid Joda, the CEO of TAJ Bank, shed light on the bank's strategic decision to channel the funds raised from the Sukuk bond into the manufacturing sector in order to stimulate economic growth in Nigeria. Joda emphasized the positive impact of investing in manufacturing, citing successful funding experiences in rice production and milling as examples. He expressed confidence in the potential of the cotton segment and textile manufacturing, highlighting the importance of backward integration to reduce dependency on foreign exchange for raw materials. TAJ Bank's focus on high-impact sectors such as manufacturing aligns with its long-term vision for sustainable economic development in Nigeria. Joda outlined the bank's commitment to providing long-term funding through the Sukuk instrument, with a minimum maturity period of five years. He emphasized the importance of long-term capital in driving economic growth and indicated openness to exploring even longer tenors to further catalyze development. The CEO also praised the strong investor response to the Sukuk bond, noting that the initial issuance was oversubscribed by 115%, reflecting significant appetite for ethical and alternative investment instruments like Sukuk. Joda expressed optimism that TAJ Bank's success in the Sukuk market would inspire other corporates to consider raising Sukuk capital, potentially diversifying investment opportunities and promoting market growth. He highlighted the pivotal role of pension funds in driving investment and hinted at potential regulatory changes that could allow pension companies greater access to Sukuk investments, further expanding the pool of capital available in the market. Overall, TAJ Bank's foray into Sukuk bond issuance marks a strategic move towards promoting sustainable manufacturing and economic growth in Nigeria, with the potential to unlock new avenues for corporate financing and investor participation.