Jaiz Bank PLC: Unaudited Financial Statements For The Quarter Ended 31 MARCH 2019

JAIZ BANK PLC
UNAUDITED FINANCIAL
STATEMENTS
FOR THE QUARTER ENDED
31 MARCH 2019
JAIZ BANK
STATEMENT OF FINANCIAL POSITION
AS AT 31 MARCH 2019
Mar-19 Dec-18
Notes N'000 N'000
Assets
Cash and Balances with Central Bank of Nigeria 3 32,293,844 23,409,751
Due from Banks and Other Financial Institutions 4 7,476,611 7,408,063
Sukuk Investment 5 24,497,883 19,819,872
Murabaha Receivables 7A 21,026,621 25,330,697
Investment in Bai Mu'ajjal 7B 64,819 59,186
Investment in Istisna 8 1,406,630 1,865,656
Investment in Ijara Assets 9 12,457,396 12,810,714
Qard Hassan 10 178,701 171,948
Investment Properties 10ii 1,603,513 1,603,513
Investment in Assets Held for Sale 11i 8,922,725 7,699,830
Property, Plant and Equipment 12 2,433,299 2,578,588
Leasehold Improvement 13 54,830 58,118
Intangible Assets 14 453,140 370,748
Other Assets 15 7,245,178 5,263,406
Deferred Taxation Asset 16b 12,368 12,368
Total Assets 120,127,559 108,462,458
Liabilities
Customer Current Deposits (17a) 46,792,714 45,950,138
Other Financing 18a 3,000,000 2,000,000
Other Liabilities 18b 10,344,506 8,229,960
Tax payable 16a 138,125 90,344
Total liabilities 60,275,345 56,270,442
Equity of Investment Account Holders

Customers' Unrestricted Investment Accounts (17b) 26,215,665 36,716,950
Mudaraba Term Deposit (17b) 20,527,388 2,365,904
46,743,052 39,082,854
Owners' Equity
Share Capital 19 14,732,125 14,732,125
Share Premium 20 627,365 627,365
Retained Earnings 21 (4,574,109) (4,574,108)
Risk Regulatory reserves 22 1,619,336 1,619,336
Statutory Reserves 22i 504,826 504,826
Other Reserves 22ii 199,618 199,618
Total Equity 13,109,162 13,109,162
Total Equity and Liabilities 120,127,559 108,462,458

Guarantee And Other Contingent Assets & Liabilities 22b 25,399,763 29,110,417
The accounting policies and the accompanying explanatory notes form part of these financial statements.
This financial statement were approved by the Board of Directors for issue on 24th April, 2019 and signed on its
behalf by
Dr. Umaru A. Mutallab, FCA, CON (Chairman)
FRC/2013/ICAN/00000004391
Hassan Usman, FCA (Managing Director/CEO)
FRC/2013/ICAN/00000003984
Abdufattah O. Amoo, FCA (Chief Finance Officer)

FRC/2018/ICAN/00000017779
Page 1
JAIZ BANK
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE PERIOD ENDED 31 MARCH 2019
3 Months 3 Months
31 Mar 2019 31 Mar 2018
Notes N'000 N'000
Income:
Income from Financing Contracts 23 1,654,752 1,567,019
Income from Investment Activities 24 936,927 301,820
Gross Income from financing transactions 2,591,679 1,868,839
Return on Equity of Investment Account Holders 25(i) (480,777) (479,148)
Bank's share as a Mudarib/Equity investor 25(ii) 2,110,902 1,389,691
Net impairment (charges)/Writeback for the year 32 (120,000) (30,000)
Net Spread after Provision 1,990,902 1,359,691
Other Income
Fees and Commisssion 26 283,945 267,115
Other Operating Income 27 46,244 6,480
Total Income 2,321,091 1,633,287
Expenses:
Staff Costs 29 749,359 634,703
Depreciation and Amortisation 30 167,384 136,170
Operating Expenses 31(i) 927,883 715,845
Total Expenses 1,844,627 1,486,717
Operating Profit/(Loss) Before Tax 476,464 146,569
Income Tax Expenses 16a (47,780) (21,986)
Profit/(Loss) for the Year after Tax 428,684 124,584
Other Comprehensive Income

Item that may be reclassified to profit or loss
Net Gain on Gifted Property 28 - -
Total comprehensive income for the year 428,684 124,584
Earnings Per Share

Basic and diluted Earnings per share (Kobo) 1.45 kobo .5 kobo
The accounting policies and the accompanying explanatory notes form part of these financial statements
Page 2
JAIZ BANK
STATEMENT OF CHANGE IN EQUITY
FOR THE PERIOD ENDED 31 MARCH 2019
3 Months 31 Mar 2019
Other Reserves
Risk CBN Other
Share Share Retained Regulatory (AGSMEIS) Comprehensive Statutory
Capital Premium Earnings Reserve Reserve Income Reserve Total
N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000
Balance at 1 January 2019 14,732,125 627,365 (4,574,108) 1,619,336 87,305 112,313 504,826 13,109,161
Profit for the year - - - - - - - -
Balance at 31 March 2019 14,732,125 627,365 (4,574,108) 1,619,336 87,305 112,313 504,826 13,109,161
As at 31 December 2018
Other Reserves
Risk CBN Other
N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000
Balance at 1 January 2018 14,732,125 627,365 (4,244,307) 2,267,029 42,420 0 254,516 13,679,147
Adjustment on IFRS 9 initial recognition - (1,516,664) - (1,516,664)
Restated Opening Balance under IFRS 9 14,732,125 627,365 (4,244,307) 750,364 42,420 0 254,516 12,162,483
Revaluation Reserve - - - - - 112,313 - 112,313
Transfer to Risk Regulatory Reserve - - (868,971) 868,971 - - - -
Transfer to Statutory Reserve - - (250,310) - - - 250,310 -
Transfer to AGSMEIS - - (44,885) - 44,885 - - -
Profit for the year - - 834,366 - - - - 834,366
Balance at 31 December 2018 14,732,125 627,365 (4,574,108) 1,619,336 87,305 112,313 504,826 13,109,161
3 Months 31 Mar 2018
Risk CBN Other

N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000
Balance at 1 January 2018 14,732,125 627,365 (4,244,308) 2,267,029 42,420 0 254,516 13,679,147
Profit for the year - - - - - -
Balance at 31 March 2018 14,732,125 627,365 (4,244,308) 2,267,029 42,420 0 254,516 13,679,147
Page 3
JAIZ BANK
STATEMENT OF CASH FLOWS
3 Months 3 Months
31 Mar 2019 31 Mar 2018
N'000 N'000
Cash flow from operating activities
Total comprehensive income for the year 428,684 146,571

Adjustments for non cash items:
Depreciation 142,464 117,941
Amortization of Intangible Assets 19,427 15,076
Amortisation of leasehold Improvement 5,493 3,153
Provision for financing impairment 120,000 30,000
Amortisation of prepaid rent 77,466 79,294
Income Tax Expenses 47,780 21,986
Gifted Item - -
Operating profit before changes in operating asset and liabilities 841,315 414,021
Working capital adjustment:
Sukuk Investment (4,678,011) (508,280)

Murabaha Receivables 4,184,076 2,353,535
Investment in Bai Mu'ajjal (5,634) -
Investment in Istisna 459,026 (487,086)
Investment in Ijara Assets 353,318 (26,124)
Qard Hassan (6,753) 5,910
Investment in Inter Bank Murabaha - (518,082)
Investment in Assets Held for Sale (1,222,895) (208,293)
Other Assets (2,059,239) (1,752,905)
Customer Current Deposits 842,575 2,330,651
Other Financing 1,000,000 -
Other liabilities 1,685,862 (230,234)
Net cash from/(used in) operating activities 1,393,642 1,373,113
INVESTING ACTIVITIES
Purchase of property, plant & equipment 2,825 (250,068)
Purchase of intangible assets (16,139) (59,390)
Improvement on leasehold properties (87,885) (20,602)
(101,199) (330,060)
FINANCING ACTIVITIES
Distribution to charity - -
Customers investment accounts 7,660,198 5,557,112
Net cash provided by (used in) financing activities 7,660,198 5,557,112
Increase (Decrease) In Cash And Cash Equivalents 8,952,641 6,600,165

Cash and cash equivalents at beginning of year 30,817,814 29,394,746
Cash And Cash Equivalents At the end of the Period 39,770,455 35,994,911
The accounting policies and the accompanying explanatory notes form part of these financial
statements
Page 4
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD 31ST MARCH, 2019
1 Reporting entity
Jaiz Bank Plc (the “Bank”) is the first fully fledged non-interest financial institution in
Nigeria. The Bank was granted a banking licence to carry on the business of non interest
banking and commenced operation on January 6th, 2012 with three branches in two states
and the Federal Capital Territory.
The Bank's Corporate Headquarter address is Kano House, Plot 73, Ralph Shodeinde
Street, Central Business District, Abuja, Nigeria.
The Financial Statement of the Bank as at 31 December 2018, is only for the Bank as it
has no subsidiary and/or Associate company.
2 Change in accounting policies

The accounting policies adopted are consistent with those of the previous financial year
except as noted below.
During the year the Bank has adopted the following new standards / amendments to the
standards effective for the annual period beginning on or after 1 January 2018.
(a) IFRS 15 Revenue from Contracts with Customers

In May 2014, the IASB issued IFRS 15 Revenue from Contracts with Customers, effective
for periods beginning on 1 January 2018 with early adoption permitted. IFRS 15 defines
principles for recognizing revenue and will be applicable to all contracts with customers.
However, interest and fee income integral to financial instruments and leases will continue
to fall outside the scope of IFRS 15 and will be regulated by the other applicable standards
(e.g. IFRS 9, and IFRS 16 Leases).
Revenue under IFRS 15 will need to be recognised as goods and services are transferred,
to the extent that the transferror anticipates entitlement to goods and services. The
following five step model in IFRS 15 is applied in determining when to recognise revenue,
and at what amount:
i) Identify the contract(s) with a customer
ii) Identify the performance obligations in the contract
iii) Determine the transaction price
iv) Allocate the transaction price to the performance obligations in the contract
v) Recognise revenue when (or as) the entity satisfies a performance obligation
The standard also specifies a comprehensive set of disclosure requirements regarding the
nature, extent and timing as well as any uncertainty of revenue and the corresponding
cash flows with customers. This standard does not have any significant impact on the Bank.
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(b) IFRS 9 Financial Instruments
In July 2014, the IASB issued IFRS 9 Financial Instruments (“IFRS 9”), which replaces IAS
39 “Financial Instruments: Recognition and Measurement”. IFRS 9 addresses all aspects of
financial instruments including classification and measurement, impairment and hedge
accounting.
The adoption of IFRS 9 also significantly amends other standards dealing with financial
instruments such as IFRS 7 Financial Instrument Disclosures.
The transitional provisions of IFRS 9 permitted the Bank to elect not to restate
comparative figures. Adjustments to the carrying amounts of financial assets and financial
liabilities at the date of the transition were recognised in the opening retained earnings
and other reserves of the current period.
2.1 New standards, interpretations and amendments to existing standards that

are not yet effective
The standards and interpretations that are issued, but not yet effective, up to the date of
issuance of the Bank’s financial statements are disclosed below. The Bank intends to adopt
these standards, if applicable, when they become effective.
IFRS 16: Leases

The standard was issued in January 2016 and sets out the principles for the recognition,
measurement, presentation and disclosure of leases. It introduces a single lessee
accounting model and requires a lessee to recognise:
 assets and liabilities for all leases with a term of more than 12 months, unless the
underlying asset is of low value.
For lessor accounting, it substantially carries forward the requirements in IAS 17.
Accordingly, a lessor continues to classify its leases as operating leases or finance leases,
and to account for those two types of leases differently. An entity shall apply this Standard
for annual reporting periods beginning on or after 1 January 2019.
The Bank is currently assessing the impact of the standard.
2.2 Significant Accounting Policies
(a) Statement of compliance with International Financial Reporting Standards
The financial statements have been prepared in accordance with the requirements of
International Financial Reporting standards (IFRS) as issued by International Accounting
standards Board (IASB). For matters on which no IFRS standard is applicable or IFRS
conflicts with Shari'ah rules and principles, the bank uses the relevant Financial Accounting
Standard as issued by the Accounting & Auditing Organization for Islamic Financial
Institutions (AAOIFI) and shariah rulings as determined by the shariah supervisory
committee of the Bank.
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(b) Basis of Preparation and Accounting
Financial statements are to be prepared under the historical cost convention, and may be
modified by their valuation of certain investment securities, property, plant and
equipment. Financial statements are to be prepared mainly in accordance with the
International Financial Reporting Standards (“IFRS”) issued by the International
Accounting Standards Board (“IASB”). For matters that are peculiar to Islamic Banking
and Finance, the Bank shall rely on the Statement of Financial Accounting (“SFA”) and
Financial Accounting Standards (“FAS”) issued by the Accounting and Auditing
Organization for Islamic Financial Institutions (“AAOIFI”), Standards issued by the Islamic
Financial Services Board (“IFSB”) and Circulars issued by the Central Bank of Nigeria
(“CBN”) shall also be of guidance.
2.3 Use of estimates and judgments.

The preparation of financial statements requires the use of estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Although these estimates are based on the
management's best knowledge of current events and actions, actual results ultimately may
differ from those estimates.
Significant items where the use of estimates and judgments are required are outlined
below:
(a) Transactions in Foreign Currencies
The financial statements are presented in Nigerian Naira, which is the reporting currency
in line with IAS21 (Effects of foreign exchange)
Transactions in foreign currencies are recorded in the books at the rate of exchange
ruling on the date of the transactions.
Monetary assets and liabilities denominated in foreign currencies are converted into Naira
at the rate of exchange ruling at the balance sheet date. All differences are taken to the
statement of income.
Non-monetary items that are measured in terms of historical cost in a foreign currency
are translated into Naira using the exchange rates as at the dates of the initial recognition.
Non-monetary items measured at fair value in a foreign currency are translated into Naira
using the exchange rates at the date when the fair value is determined. Exchange gains
and losses on non-monetary items classified as “fair value through statement of income”
are taken to the income statement and for items classified at “fair value through equity”
such differences are taken to the statement of comprehensive income.
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Any goodwill arising on the acquisition of a foreign operation and any fair value
adjustments to the carrying amounts of assets and liabilities arising on the acquisition are
treated as assets and liabilities of the foreign operations and translated at closing rate.
(b) Cash and Cash Equivalent
Cash comprises:
i Cash in hand
ii Balance held with Central Bank of Nigeria
iii Balance with banks in Nigeria and outside Nigeria
iv Demand deposit denominated in Naira and other foreign currencies
Cash equivalent are short term, highly liquid instruments which are:
a. readily convertible into cash, whether in local and foreign currencies; and
b. so near to their maturity dates as to present insignificant risk of changes in value as a
result of changes in profits rates.
(c) Going Concern

The Bank's management shall be making assessment of the Bank's ability to continue as a
going concern and where satisfied that the Bank has the resources to continue in business
for the foreseeable future shall form a judgment and prepare accounting information based
on that. In any situation whereby the Board of Directors is aware of any material
uncertainties that may cast significant doubt upon the Bank's ability to continue as a going
concern such issues shall be disclosed in the annual report.
(d) Financial instrument

The Bank applied the classification and measurement requirements for financial
instruments under IFRS 9 'Financial Instruments' for the year ended 31 December 2018.
The 2017 comparative period was not restated, and the requirements under IAS 39
'Financial Instruments: Recognition and Measurement' were applied. The key changes are in
the classification and impairment requirements.
Recognition and initial measurement
All the financial assets and financial liabilities of the Bank are initially recognized on the
trade date for regular way contracts, i.e., the date that the Bank becomes a party to the
contractual provisions of the instrument.
A financial asset or financial liability is measured initially at fair value plus or minus, for an
item not at fair value through profit or loss, direct and incremental transaction costs that
are directly attributable to its acquisition or issue. Transaction costs of financial assets and
liabilities carried at fair value through profit or loss are expensed in income statement at
initial recognition.
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Classification
The Bank classifies its financial assets under IFRS 9, into the following measurement
categories:
 those to be measured at fair value either through other comprehensive income,

or through profit or loss; and
 those to be measured at amortised cost.
The classification depends on the Bank’s business model (i.e. business model test) for
managing financial assets and the contractual terms of the financial assets cash flows (i.e.
solely payments of principal and return – SPPI test).
The Bank also classifies its financial liabilities as liabilities at fair value through profit or loss
and liabilities at amortised cost. Management determines the classification of the financial
instruments at initial recognition.
Subsequent measurements
Financial assets or financial liabilities carried at amortised cost
(i) Debt instruments

The subsequent measurement of financial assets depend on its initial classification:
Amortised cost: A financial asset is measured at amortised cost if it meets both of the
following conditions and is not designated as at FVTPL:
 The asset is held within a business model whose objective is to hold assets to
collect contractual cash flows; and
 The contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and return on the principal amount
outstanding.
The gain or loss on a debt investment that is subsequently measured at amortised cost
and is not part of a hedging relationship is recognised in income statement when the asset
is derecognised or impaired. Returns from these financial assets is determined using the
effective rate of return (ERR) method and reported in income statement as ‘income’.
The amortised cost of a financial instrument is defined as the amount at which it was
measured at initial recognition minus principal repayments, plus or minus the cumulative
amortization using the 'effective rate of return method' of any difference between that
initial amount and the maturity amount, and minus any loss allowance. The effective rate
of return method is a method of calculating the amortised cost of a financial instrument
(or group of instruments) and of allocating the income or expense over the relevant
period. The effective rate of return (ERR) is the rate that exactly discounts estimated
future cash payments or receipts over the expected life of the instrument or, when
appropriate, a shorter period, to the instrument's net carrying amount.
9
Fair value through other comprehensive income (FVOCI): Investment in debt
instrument is measured at FVOCI only if it meets both of the following conditions and is
not designated as at FVTPL:
 the asset is held within a business model whose objective is achieved by both
collecting contractual cash flows and selling financial assets; and
 the contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and return on the principal amount
outstanding.
The debt instrument is subsequently measured at fair value. Gains and losses arising from
changes in fair value are included in other comprehensive income within a separate
component of equity. Impairment gains or losses, return revenue and foreign exchange
gains and losses are recognised in profit and loss. Upon disposal or derecognition, the
cumulative gain or loss previously recognised in OCI is reclassified from equity to income
statement and recognised in net gains on investment securities while the cumulative
impairment loss recognised in the OCI and accumulated in equity will be reclassified and
credited to income statement. Income from these financial assets is determined using the
effective rate of return method and recognised in income statement as ‘income’. The
measurement of credit impairment is based on the three-stage expected credit loss model
as applied to financial assets at amortised cost.
Fair value through profit or loss (FVTPL): Financial assets that do not meet the
criteria for amortised cost or FVOCI are measured at fair value through profit or loss.
The gain or loss arising from changes in fair value of a debt investment that is subsequently
measured at fair value through profit or loss and is not part of a hedging relationship is
included directly in the income statement and reported as ‘Net gains/(losses)from financial
instruments held for trading’in the period in which it arises. Returns from these financial
assets is recognised in income statement as ‘income’.
(ii) Equity instruments
The Bank subsequently measures all equity investments at fair value. For equity investment
that is not held for trading, the Bank may irrevocably elect to present subsequent changes
in fair value in OCI. This election is made on an investment-by-investment basis. Where
the Bank’s management has elected to present fair value gains and losses on equity
investments in other comprehensive income, there is no subsequent reclassification of fair
value gains and losses to income statement. Dividends from such investments continue to
be recognised in income statement as dividend income when the company’s right to
receive payments is established unless the dividend clearly represents a recovery of part
of the cost of the investment. Changes in the fair value of financial assets measured at fair
value through profit or loss are recognised in ‘Net gains/(losses) from financial instruments
held for trading’.
All other financial assets are classified as measured at FVTPL. In addition, on initial
recognition, the Bank may irrevocably designate a financial asset that otherwise meets the
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requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so
eliminates or significantly reduces an accounting mismatch that would otherwise arise.
Business model assessment

The Bank makes an assessment of the objective of a business model in which an asset is
held at a portfolio level because this best reflects the way the business is managed and
information is provided to management. The information considered includes:
1) The stated policies and objectives for the portfolio and the operation of those
policies in practice. In particular, whether management’s strategy focuses on
earning contractual return revenue, maintaining a particular return rate profile,
matching the duration of the financial assets to the duration of the liabilities that
are funding those assets or realising cash flows through the sale of the assets;
2) How the performance of the portfolio is evaluated and reported to management;
3) The risks that affect the performance of the business model (and the financial
assets held within that business model) and how those risks are managed;
4) How managers of the business are compensated e.g. whether compensation is
based on the fair value of the assets managed or the contractual cash flows
collected; and
5) The frequency, volume and timing of sales in prior periods, the reasons for such
sales and its expectations about future sales activity. However, information about
sales activity is not considered in isolation, but as part of an overall assessment of
how the Bank’s stated objective for managing the financial assets is achieved and
how cash flows are realised.
The business model assessment is based on reasonably expected scenarios without taking
'worst case' or 'stress case’ scenarios into account. If cash flows after initial recognition
are realised in a way that is different from the Bank's original expectations, the Bank does
not change the classification of the remaining financial assets held in that business model,
but incorporates such information when assessing newly originated or newly purchased
financial assets going forward.
Financial assets that are held for trading or managed and whose performance is evaluated
on a fair value basis are measured at FVTPL because they are neither held to collect
contractual cash flows nor held both to collect contractual cash flows and to sell financial
assets.
Assessment of whether contractual cash flows are solely payments of principal

and return on principal amount outstanding
As a second step of its classification process the Bank assesses the contractual terms of
financial to identify whether they meet the SPPI test.
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‘Principal’ for the purpose of this test is defined as the fair value of the financial asset at
initial recognition and may change over the life of the financial asset (for example, if there
are repayments of principal or amortization of the premium/discount).‘Return’ is include
consideration for the time value of money and for the credit risk associated with the
principal amount outstanding during a particular period of time and for other basic lending
risks and costs (e.g. liquidity risk and administrative costs), as well as profit margin.
The most significant elements of return within a lending arrangement are typically the
consideration for the time value of money and credit risk. To make the SPPI assessment,
the Bank applies judgement and considers relevant factors such as the currency in which
the financial asset is denominated, and the period for which the return rate is set.
Financial liabilities
The Bank’s holding in financial liabilities is in financial liabilities at fair value through profit
or loss and financial liabilities at amortised cost. Financial liabilities are derecognised when
the obligation under the liability is discharged or cancelled or expires. When an existing
financial liability is replaced by another from the same lender on substantially different
terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as the derecognition of the original liability and the recognition of
a new liability. The difference in the respective carrying amounts is recognised in income
statement.
(i) Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss are financial liabilities held for trading.
A financial liability is classified as held for trading if it is acquired or incurred principally
for the purpose of selling or repurchasing it in the near term or if it is part of a portfolio
of identified financial instruments that are managed together and for which there is
evidence of a recent actual pattern of short-term profit-taking.
Derivatives are also categorised as held for trading unless they are designated and effective
as hedging instruments. Financial liabilities held for trading also include obligations to
deliver financial assets borrowed by the Bank.
Gains and losses arising from changes in fair value of financial liabilities classified as held
for trading are included in the income statement and are reported as ‘Net gains/(losses)
on financial instruments classified as held for trading’. Return expenses on financial
liabilities held for trading are included in ‘Net income’.
From 1 January 2018, under IFRS 9, where a financial liability is designated at fair value
through profit or loss, the movement in fair value attributable to changes in the Bank’s
own credit quality is calculated by determining the changes in credit spreads above
observable market return rates and is presented separately in other comprehensive
income.
(ii) Financial liabilities at amortised cost

Financial liabilities that are not classified at fair value through profit or loss fall into this
category and are measured at amortised cost. Financial liabilities measured at amortised
12
cost are deposits from banks or customers, debt securities in issue for which the fair value
option is not applied, convertible bonds and subordinated debts.
Modifications of financial assets and financial liabilities

(i) Financial assets
If the terms of a financial asset are modified, the Bank evaluates whether the cash flows
of the modified asset are substantially different. If the cash flows are substantially different,
then the contractual rights to cash flows from the original financial asset are deemed to
have expired. In this case, the original financial asset is derecognised and a new financial
asset is recognised at fair value. Any difference between the amortised cost and the
present value of the estimated future cash flows of the modified asset or consideration
received on derecognition is recorded as a separate line item in income statements as
‘gains and losses arising from the derecognition of financial assets measured at amortised
cost’.
If the cash flows of the modified asset carried at amortised cost are not substantially
different, then the modification does not result in derecognition of the financial asset. In
this case, the Bank recalculates the gross carrying amount of the financial asset as the
present value of the renegotiated or modified contractual cash flows that are discounted
at the financial asset’s original effective rate of return (or credit-adjusted effective rate of
return for purchased or originated credit-impaired financial assets). The amount arising
from adjusting the gross carrying amount is recognised as a modification gain or loss in
income statement as part of impairment charge for the year.
(ii) Financial liabilities
The Bank derecognises a financial liability when its terms are modified and the cash flows
of the modified liability are substantially different. This occurs when the discounted
present value of the cash flows under the new terms, including any fees paid net of any
fees received and discounted using the original effective rate of return, is at least 10 per
cent different from the discounted present value of the remaining cash flows of the original
financial liability. In this case, a new financial liability based on the modified terms is
recognised at fair value. The difference between the carrying amount of the financial
liability extinguished and the new financial liability with modified terms is recognised in
income statement. If an exchange of debt instruments or modification of terms is
accounted for as an extinguishment, any costs or fees incurred are recognised as part of
the gain or loss on the extinguishment. If the exchange or modification is not accounted
for as an extinguishment (i.e. the modified liability is not substantially different), any costs
or fees incurred adjust the carrying amount of the liability and are amortised over the
remaining term of the modified liability.
Offsetting of financial instruments
Financial assets and financial liabilities are only offset and the net amount reported in the
consolidated statement of financial position when there is a legally enforceable right and
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under Sharia’a framework to set off the recognized amounts and the Bank intends to
either settle on a net basis, or to realize the asset and settle the liability simultaneously.
Impairment of Financial Assets
The Bank recognizes allowance for expected credit losses for all loans and other debt
financial assets not held at FVPL, together with loan commitments and financial guarantee
contracts, in this section all referred to as ‘financial instruments’. Equity instruments are
not subject to impairment under IFRS 9.
The ECL allowance is based on the credit losses expected to arise over the life of the
asset (the lifetime expected credit loss or LTECL), unless there has been no significant
increase in credit risk since origination, in which case, the allowance is based on the 12
months’ expected credit loss (12mECL)
The 12mECL is the portion of LTECLs that represent the ECLs that result from default
events on a financial instrument that are possible within the 12 months after the reporting
date. Both LTECLs and 12mECLs are calculated on either an individual basis or a collective
basis, depending on the nature of the underlying portfolio of financial instruments
Loss allowances for accounts receivable are always measured at an amount equal to
lifetime ECL. The Bank has established a policy to perform an assessment, at the end of
each reporting period, of whether a financial instrument’s credit risk has increased
significantly since initial recognition, by considering the change in the risk of default
occurring over the remaining life of the financial instrument.
Based on the above process, the Bank groups its loans into Stage 1, Stage 2, Stage 3 and
POCI, as described below:
• Stage 1: When loans are first recognised, the Bank recognises an allowance based on
12mECLs. Stage 1loans also include facilities where the credit risk has improved and the
loan has been reclassified from Stage 2.
• Stage 2: When a loan has shown a significant increase in credit risk since origination,
the Bank records an allowance for the LTECLs. Stage 2 loans also include facilities, where
the credit risk has improved and the loan has been reclassified from Stage 3.
• Stage 3: Loans considered credit-impaired. The Bank records an allowance for the
LTECLs.
• POCI: Purchased or originated credit impaired (POCI) assets are financial assets that
are credit impaired on initial recognition. POCI assets are recorded at fair value at original
recognition and return is subsequently recognised based on a credit-adjusted ERR. ECLs
are only recognised or released to the extent that there is a subsequent change in the
expected credit losses.
If, in a subsequent period, credit quality improves and reverses any previously assessed
significant increase in credit risk since origination, depending on the stage of the lifetime
14
2 or stage 3 of the ECL bucket, the Bank would continue to monitor such financial assets
for a probationary period of 90 days to confirm if the risk of default has decreased
sufficiently before upgrading such exposure from Lifetime ECL (Stage 2) to 12-months
ECL (Stage 1). In addition to the 90 days probationary period above, the Bank also
observes a further probationary period of 90 days to upgrade from Stage 3 to 2. This
means a probationary period of 180 days will be observed before upgrading financial assets
from Lifetime ECL (Stage 3) to 12-months ECL (Stage 1).
For financial assets for which the Bank has no reasonable expectations of recovering either
the entire outstanding amount, or a proportion thereof, the gross carrying amount of the
financial asset is reduced. This is considered a (partial) derecognition of the financial asset.
Measurement of ECLs
The Bank calculates ECLs based on probability-weighted scenarios to measure the
expected cash shortfalls, discounted at an approximation to the expected profit rate. A
cash shortfall is the difference between the cash flows that are due to an entity in
accordance with the contract and the cash flows that the entity expects to receive.
The mechanics of the ECL calculations are outlined below and the key elements are, as
follows:
 PD: The Probability of Default is an estimate of the likelihood of default over a given
time horizon. A default may only happen at a certain time over the assessed period,
if the facility has not been previously derecognised and is still in the portfolio.
 EAD: The Exposure at Default is an estimate of the exposure at a future default date,
taking into account expected changes in the exposure after the reporting date,
including repayments of principal and return, whether scheduled by contract or
otherwise, expected draw downs on committed facilities, and accrued return from
missed payments.
 LGD: The Loss Given Default is an estimate of the loss arising in the case where a
default occurs at a given time. It is based on the difference between the contractual
cash flows due and those that the lender would expect to receive, including from the
realisation of any collateral. It is usually expressed as a percentage of the EAD.
When estimating the ECLs, the Bank considers three scenarios (a base case, an upside
and downside). Each of these is associated with different PDs, EADs and LGDs.
When relevant, the assessment of multiple scenarios also incorporates how defaulted
loans are expected to be recovered, including the probability that the loans will cure and
the value of collateral or the amount that might be received for selling the asset.
Impairment losses and releases are accounted for and disclosed separately from
modification losses or gains that are accounted for as an adjustment of the financial asset’s
gross carrying value.
The mechanics of the ECL method are summarised below:
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• Stage 1: The 12mECL is calculated as the portion of LTECLs that represent the ECLs
that result from default events on a financial instrument that are possible within the
12months after the reporting date. The Bank calculates the 12mECL allowance based on
the expectation of a default occurring in the 12 months following the reporting date.
These expected 12-month default probabilities are applied to a forecast EAD and
multiplied by the expected LGD and discounted by an approximation to the original EIR.
This calculation is made for each of the four scenarios, as explained above.
• Stage 2: When a loan has shown a significant increase in credit risk since origination, the
Bank records an allowance for the LTECLs. The mechanics are similar to those explained
above, including the use of multiple scenarios, but PDs and LGDs are estimated over the
lifetime of the instrument. The expected cash shortfalls are discounted by an
approximation to the original EIR.
• Stage 3: For loans considered credit-impaired, the Bank recognises the lifetime expected
credit losses for these loans. The method is similar to that for Stage 2 assets, with the PD
set at 100%.
• POCI: POCI assets are financial assets that are credit impaired on initial recognition.
The Bank only recognises the cumulative changes in lifetime ECLs since initial recognition,
based on a probability-weighting of the four scenarios, discounted by the credit-adjusted
EIR.
• Loan commitments and letters of credit: When estimating LTECLs for undrawn loan
commitments, the Bank estimates the expected portion of the loan commitment that will
be drawn down over its expected life. The ECL is then based on the present value of the
expected shortfalls in cash flows if the loan is drawn down, based on a probability-
weighting of the four scenarios. The expected cash shortfalls are discounted at an
approximation to the expected EIR on the loan.
Presentation of allowance for ECL in the statement of financial position
Loan allowances for ECL are presented in the statement of financial position as follows:
 Financial assets measured at amortised cost: as a deduction from the gross
carrying amount of the assets;
 Loan commitments and financial guarantee contracts: generally, as a provision;
 Where a financial instrument includes both a drawn and an undrawn
component, and the Bank cannot identify the ECL on the loan commitment
component separately from those on the drawn component: the Bank
presents a combined loss allowance for both components. The combined
amount is presented as a deduction from the gross carrying amount of the
drawn component. Any excess of the loss allowance over the gross amount of
the drawn component is presented as a provision; and
 Debt instruments measured at FVOCI: no loss allowance is recognised in the
statement of financial position because the carrying amount of these assets is
16
their fair value. However, the loss allowance is disclosed and is recognised in
the fair value reserve.
Renegotiated financing facilities

Where possible, the Bank seeks to restructure financing facilities rather than to take
possession of collateral. This may involve extending the payment arrangements and the
agreement of new conditions. Management continually reviews renegotiated facilities to
ensure that all future payments are highly expected to occur.
When the terms of a financial asset are renegotiated or modified or an existing financial
asset is replaced with a new one due to financial difficulties of the finance customer, then
an assessment is made of whether the financial asset should be derecognized and ECL are
measured as follows:
- If the expected restructuring will not result in derecognition of the exiting asset, then
the expected cash flows arising from the modified financial asset are included in calculating
the cash shortfalls from the existing asset.
- If the expected restructuring will result in derecognition of the existing asset, then the
expected fair value of the new asset is treated as the final cash flow from the existing
financial asset at the time of its derecognition.
This amount is included in calculating the cash shortfalls from the existing financial asset.
The cash shortfalls are discounted from the expected date of derecognition to the
reporting date using the original effective profit rate of the existing financial asset.
Collateral valuation
To mitigate its credit risks on financial assets, the Bank seeks to use collateral, where
possible. The collateral comes in various forms, such as cash, securities, letters of
credit/guarantees, real estate, receivables, inventories, other non-financial assets and
credit enhancements such as netting agreements. The Bank’s accounting policy for
collateral assigned to it through its lending arrangements under IFRS 9 is the same is it
was under IAS 39. Collateral, unless repossessed, is not recorded on the Bank’s statement
of financial position.
However, the fair value of collateral affects the calculation of ECLs. It is generally assessed,
at a minimum, at inception and re-assessed on a quarterly basis. However, some collateral,
for example, cash or securities relating to margining requirements, is valued daily.
To the extent possible, the Bank uses active market data for valuing financial assets held
as collateral. Other financial assets which do not have readily determinable market values
are valued using models. Non-financial collateral, such as real estate, is valued based on
data provided by third parties such as mortgage brokers, or based on housing price
indices.
Collateral repossessed
The Bank’s accounting policy under IFRS 9 remains the same as it was under IAS 39. The
Bank’s policy is to determine whether a repossessed asset can be best used for its internal
operations or should be sold. Assets determined to be useful for the internal operations
17
are transferred to their relevant asset category at the lower of their repossessed value
or the carrying value of the original secured asset. Assets for which selling is determined
to be a better option are transferred to assets held for sale at their fair value (if financial
assets)and fair value less cost to sell for non-financial assets at the repossession date in,
line with the Bank’s policy.
In its normal course of business, the Bank does not physically repossess properties or
other assets in its retail portfolio, but engages external agents to recover funds, generally
at auction, to settle outstanding debt. Any surplus funds are returned to the
customers/obligors. As a result of this practice, the residential properties under legal
repossession processes are not recorded on the balance sheet.
Write-off
After a full evaluation of a non-performing exposure, in the event that either one or all of
the following conditions apply, such exposure is recommended for write-off (either
partially or in full):
 continued contact with the customer is impossible;
 recovery cost is expected to be higher than the outstanding debt;
 amount obtained from realisation of credit collateral security leaves a balance of
the debt; or
 it is reasonably determined that no further recovery on the facility is possible.
All credit facility write-offs require endorsement by the Board Credit Committee, as
defined by the Bank. Credit write-off approval is documented in writing and properly
initialed by the Board Credit Committee.
A write-off constitutes a derecognition event. The write-off amount is used to reduce the
carrying amount of the financial asset. However, financial assets that are written off could
still be subject to enforcement activities in order to comply with the Bank's procedures
for recovery of amount due. Whenever amounts are recovered on previously written-off
credit exposures, such amount recovered is recognised as income on a cash basis only.
Forward looking information
In its ECL models, the Bank relies on a broad range of forward looking information as
economic inputs, such as:
• GDP growth
• Unemployment rates
• Central Bank base rates
• House price indices
The inputs and models used for calculating ECLs may not always capture all characteristics
of the market at the date of the financial statements. To reflect this, qualitative
adjustments or overlays are occasionally made as temporary adjustments when such
differences are significantly material. Detailed information about these inputs and
sensitivity analysis are provided in Note 4 in the pro-forma financial statements.
18
Financial guarantees and loan commitments
The date that the entity becomes a party to the irrevocable commitment is considered
to be the date of initial recognition for the purposes of applying the impairment
requirements. Financial guarantees issued are initially measured at fair value and the fair
value is amortised over the life of the guarantee. Subsequently, the financial guarantees
are measured at the higher of this amortised amount and the amount of expected loss
allowance. The premium received is recognised in the income statement in Net fees and
commission income on a straight line basis over the life of the guarantee.
The Bank also recognises loss allowance for its loan commitments. The expected loss
allowance for the Loan commitment is calculated as the present value of the difference
between the contractual cash flows that are due to the Bank if the commitment is drawn
down and the cash flows that the Bank expects to receive.
The Bank has issued no loan commitment that is measured at FVTPL.
iii Impairment Provisions against Financing Contracts with Customers
The Bank shall review its financing contracts at each reporting date to assess whether an
impairment provision should be recorded in the financial statements. In particular,
judgment by management is required in the estimation of the amount and timing of future
cash flows when determining the level of provision required. Such estimates are based on
assumptions about factors involving varying degrees of judgment and uncertainty and
actual results may differ resulting in future changes to the provisions. In addition to specific
provisions against individually significant financing contracts, the Bank also shall make a
collective impairment provision of 2% against exposures which, although not specifically
identified as requiring a specific provision, have a greater risk of default than when
originally granted. This takes into consideration, factors such as any deterioration in
country risk, industry, and technological obsolescence, as well as identified structural
weaknesses or deterioration in cash flows.
iv Impairment of Investments at Fair Value through Equity
The Bank shall treat investments carried at fair value through equity as impaired when
there is a significant or prolonged decline in the fair value below their costs or where
other objective evidence of impairment exists. The determination of what is 'significant'
or 'prolonged' requires judgment. The Bank would evaluate factors, such as the historical
share price volatility for comparable quoted equities and future cash flows and the
discount factors for comparable unquoted equities.
v Liquidity
The Bank shall manage its liquidity through consideration of the maturity profile of its
assets and liabilities on daily basis. This requires judgment when determining the maturity
of assets and liabilities with no specific maturities.
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(e) Inventory
Inventory of stationery and consumables held by the Bank are to be stated at the lower
of cost and net realizable value in line with IAS 2. When inventories become old or
obsolete, an estimate is to be made of their net realizable value. For individually significant
amounts, this estimation is to be performed on an individual basis. For amounts that are
not individually significant, collective assessment shall be made and allowance applied
according to the inventory type and degree of ageing or obsolescence based on historical
selling prices.
(f) Non-Current Assets
Non-current (fixed) assets are initially recorded at cost. They are to be subsequently
stated at historical cost less depreciation and any accumulated impairment loss. Historical
cost includes expenditure that is directly attributable to the acquisition of the assets.
Subsequent costs are included in the asset's carrying amount or are recognized as a
separate asset, as appropriate, only when it is probable that future economic benefits
associated with the asset will flow to the Bank and the cost of the asset can be measured
reliably. All other repairs and maintenance are charged to the income statement during
the financial period in which they are incurred.
Construction cost in respect of offices is carried at cost as work in progress. On

completion of construction, the related amounts are transferred to the appropriate
category of fixed assets. Payments in advance for items of fixed assets are included as
Prepayments in Other Assets and upon delivery are reclassified as additions in the
appropriate category of property and equipment.
Asset that do not reach a limit of N25,000 (Twenty Five Thousand Naira Only) are
expensed immediately in the income statement, but capitalized if above limit.
Depreciation is to be provided on a straight-line basis to write off the cost of asset over
their estimated useful live. The annual rate which should be applied consistently over time
are as follows:
Motor vehicle (5 years) 20%

Furniture and fittings (5 years) 20%
Equipment (5 years) 20%
Computer Equipment- General (3 years) 33%
Computer Equipment- Special (5 years) 20%
Computer software (10 years) 10%
Freehold Buildings (50 years) 2%
Leasehold building over the expected life of the lease
Leasehold improvement over the period of the lease
20
Property, plant and equipment is derecognised on disposal or when no future economic
benefits are expected from it use. Gain and losses are recognised in the income statement.
Depreciation is charged when the assets are available for use irrespective of whether they
are put to use. Assets that are subject to depreciation are reviewed for impairment
whenever events or changes in circumstances indicate that the carrying amount may not
be recoverable. An asset's carrying amount is written down immediately to its recoverable
amount if the asset's carrying amount is greater than its estimated recoverable amount.
The recoverable amount is the higher of the asset's fair value less costs to sell and value
in use.
Gains and losses on disposal are determined by comparing proceeds with carrying
amount. These are included in the statement of income for the year.
(g) Intangible Assets

Software licenses acquired by the Bank are stated at cost less accumulated amortization
and accumulated impairment loss (if any). Expenditure incurred on internally developed
software is recognized as an asset when the Bank is able to complete the software
development and use it in such a manner that it will be able to generate economic benefit
to the Bank, and that the cost to complete the development can reliably be measured by
the Bank.
Internally developed software cost that is capitalized includes cost directly attributable to
developing the software, and is amortized over the useful economic life of the software.
Amortization is recognized in the income statement on a straight line basis over the
estimated useful life of the software.
(h) Ijarah (Leasing)

The Bank shall comply fully with the requirements of Sharia in recognition and
measurement of Ijarah financing. The periodic lease rentals receivable are treated as rental
income during the period they occur and charge thereon is included in operating expenses
while initial direct cost incurred are written off to the income statement in the period
they are incurred.
(i) Murabaha Receivables from Banks
These are interbank commodity Murabaha transactions. The Bank arranges a Murabaha
transaction by buying a commodity (which represents the object of the murabaha) and
then resells this commodity to the beneficiary murabeh (after adding a profit margin). The
sale price (cost plus the profit margin) is paid either lump sum at Maturity or in
installments by the Murabeh over the agreed period. Murabaha receivables from banks
are stated net of deferred profits and provision for impairment, if any.
21
(j) Murabaha Receivables from Customers
Customer Murabaha receivables consist of deferred sales transaction agreements and are
stated net of deferred profits, any amounts written off and provision for impairment, if
any. Promise made in the Murabaha to the purchase Orderer is obligatory upon the
customer and the bank can claim damages to the exact amount of loss suffered.
(k) Musharaka
Musharaka contracts represents a partnership between the Bank and a customer whereby
each party contributes to the capital in equal or varying proportions to establish a new
project or share in an existing one, and whereby each of the parties becomes an owner
of the capital on a permanent or declining basis and shall have a share of profits or losses.
These are stated at the fair value of consideration given less any amounts written off and
provision for impairment, if any.
(l) Wakalah
A contract between a Bank and a customer whereby one party (the principal: the
Muwakkil) appoints the other party (the agent: Wakil ) to invest certain funds according
to the terms and conditions of the Wakalah for a fixed fee in addition to any profit
exceeding the expected profit as an incentives for the Wakil for the good performance.
Any losses as result of the misconduct or negligence or violation of the the terms and
conditions of the Wakalah are borne by the Wakil for otherwise, they are by the principal.
(m) Income Recognition

Income is recognised on the above Islamic products as follows:
i Murabaha
Where the income is quantifiable and contractually determined at the commencement of
the contract, income is recognized on a time-apportioned basis over the period of the
contract based on the principal amounts outstanding. Accrual of income is suspended
when the bank believes that the recovery of these amounts may be doubtful.
ii Ijarah Muntahia Bittamleek
Ijarah income is recognized on a time-apportioned basis, over the lease term. Accrual of
income is suspended when the bank believes that the recovery of these amounts may be
doubtful.
iii Musharaka
Income on Musharaka Contracts is recognized when the right to receive payment is
established or on distribution by the Musharek.
iv Dividends
Dividends from investments in equity securities are recognized when the right to receive
the payment is established. This is usually when the dividend has been declared.
22
v Fees and Commission Income
The Bank earns fee and commission income from a diverse range of services it provides
to its customers.
vi Sukuk
Income is accounted for on a time apportioned basis over the terms of the Sukuk.
vii Sale of Property under Development
Where property is under development and agreement has been reached to sell
such property when construction is complete, the bank considers whether the
contract comprises:
Contract to construct a property; or
Contract for the sale of completed property
Where a contract is judged to be for the construction of a property, revenue is

recognized using the percentage of completion method, as construction
progresses. The percentage of work completed is measured based on the costs
incurred up until the end of the reporting period as a proportion of total costs
expected to be incurred.
Where the contract is judged to be for the sale of a completed property, revenue
is recognized when the significant risks, rewards and control of ownership of the
property are transferred to the buyer.
viii Non-Credit Related Fee Income
This is recognized at the time the services have been performed and delivered or
the transaction has been completed.
ix Foreign Income
a) Commission on negotiation of various letters of credit and overdue Profit on

delayed foreign payments are accounted for on receipt.
b) Other Profit and income earned on the Bank's own funds held outside Nigeria are
accounted for on receipt.
x Earnings Prohibited by Shari 'a
The bank is committed to avoid recognizing any income generated from non-
Islamic sources. Accordingly, all non-permissible income is transferred to charity.
23
xi Service Income
Revenue from rendering of services is recognized when the services are rendered.
xii Revenue from Sale of Goods
Revenue from sales of goods is recognized when the significant risks, rewards and
control of ownership of the goods have passed to the buyer and the amount of
revenue can be measured reliably.
xiii Bank's Share as a Mudarib
The Bank's share as a mudarib for managing the equity of investment account
holders is accrued based on the terms and conditions of the related mudaraba
agreements whereas, for off balance sheet equity of investment accounts, mudarib
share is recognized when distributed.
xiv Expense Recognition
a) Profit on mudaraba payable (banks and non-banks)
Profit on these is accrued on a time-apportioned basis over the period of the

contract based on the principal amounts outstanding.
b) Return on Equity of Investment Account Holders
Return on equity of investment account holders is based on the income generated

from jointly financed assets after deducting Mudarib share and is accrued based on
the terms and conditions of the underlying Mudaraba agreement. Investors' share
of income represents income generated from assets financed by investment
account holders net off allocated administrative expenses and provisions. The
bank's share of profit is deducted from the investors' share of income before
distribution to investors
(n) Taxation
i Current Income Taxation
Income tax is the amount of income tax payable on the taxable profit for the period
determined in accordance with current statutory rate. Income tax payable on profits,
based on the applicable tax law, is recognized as an expense in the period in which the
related profits arise. All taxes related issues including deferred tax are treated in
accordance with IAS 12 (Income taxes)
24
ii Deferred Taxation
Provision for deferred taxation is made by the liability method and calculated at the
current rate of taxation on the temporary differences between the net book value of
qualifying fixed assets and their corresponding tax written down value in accordance with
IAS 12 (Income taxes). The principal temporary differences arise from depreciation of
property, plant and equipment, provisions for pensions and other post-retirement
benefits, provisions for Investment losses and tax losses carried forward. The rates
enacted or substantively enacted at the balance sheet date are used to determine deferred
income tax.
Deferred tax assets are recognized where it is probable that future taxable profit will be
available against which the timing differences can be utilized.
(o) Investments
i Investment Securities
Investment securities are initially recognized at cost and management determines the
classification at initial investment. Investments in securities are classified, measured and
recognize in accordance with IAS 39 (Financial Instruments measurement and
recognition).
ii Investments at Fair Value through Equity
Investments at fair value through equity are those which are designated as such or are not
classified as carried at fair value through statement of income. These include investments
in equity securities and managed funds.
After initial measurement, investments at fair value through equity are subsequently
measured at fair value. Unrealised gains and losses are recognised in statement of
comprehensive income and then transferred to the available for sale reserve in the
consolidated statement of changes in equity. When the investment is disposed of or
determined to be impaired, the cumulative gain or loss, previously transferred to the
available for sale, reserve is recognised in the consolidated statement of income. Where
the Bank holds more than one investment in the same security they are deemed to be
disposed off on a weighted average basis. Profit earned whilst holding investments at fair
value through equity is reported as Income from investment activities' using the effective
profit rate method. Long-term investments are investments held over a long period of
time to earn income. Long-term investments may include debt and equity securities.
iii Investments in Subsidiaries

Investments in subsidiaries are carried in the company's balance sheet at cost less
provisions for impairment losses. Where, in the opinion of the Directors, there has been
impairment in the value of an investment, the loss is recognized as an expense in the
period in which the impairment is identified.
25
On disposal of an investment, the difference between the net disposal proceeds and the
carrying amount is charged or credited to the statement of income.
(p) Employee benefits

A defined contribution plan is a pension plan under which the Bank pays fixed
contributions to a separate entity. A defined contribution scheme, which is funded by
contribution from the bank and employees. The rate of contribution by the by the
employee is 8.0% and 10% by the Bank based on annual basic salary, housing and transport
allowances in line with the new Pension Reform Act, 2014. Membership of the scheme is
automatic upon resumption of duty with the Bank. The Bank has no further payment
obligations once the contributions have been paid.
The Bank's liabilities in respect of the defined contribution are to be charged against the
profit of the year in which they become payable. Payments are made to Pension Fund
Administration companies, who are financially independent of the bank.
(q) Provisions, Contingent Assets and Contingent Liabilities
Provision is recognized when the Bank has a present obligation whether legal or
constructive as a result of a past event for which it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation and the amount can
be reliably measured, in accordance with the International Financial Reporting Standards
(IAS 37).
Transactions that are not currently recognized as assets or liabilities in the balance sheet,
but which nonetheless give rise to credit risks, contingencies and commitments are
reported off balance sheet. Such transactions included letters of credit, bonds, guarantees,
acceptances, trade related contingencies such as documentary credits etc.
Outstanding and unexpired commitments at year end in respect of these transactions are
to be shown by way of note to the financial statements.
Income on off-balance sheet engagement is in form of commission and fees.
Commission and fees are recognized when transactions are executed.
(r) Borrowings
i Murabaha and Due to Banks
This represents funds received from banks on the principles of murabaha contracts and
are stated at fair value of consideration received less amounts settled.
ii Murabaha and due to non-banks
26
These are stated at fair value of consideration received less amounts settled. Profit paid
on borrowings is recognized in the statement of income for the year.
(s) Fiduciary Activities

The Bank acts as trustee in its capacity as a Mudarib when managing the equity of
investment account holders. Equity of investment account holders is invested in murabaha
and due from banks, sukuk and financing contracts with customers. Equity of investment
account holders is carried at fair value of consideration received less amounts settled.
Expenses are allocated to investment accounts in proportion of average equity of
investment account holders to total average assets of the Bank.
Income is allocated proportionately between equity of investment account holders and

owners' equity on the basis of the average balances outstanding during the year and share
of the funds invested. Equity and assets of restricted investment account holders are
carried off-balance sheet as they are not assets and liabilities of the Bank.
(t) Segment Reporting
The Bank prepares its segment information based on geographical and business segments
as primary and secondary reporting segments, respectively in accordance with IFRS 8
(Operating segments).
A business segment is a Bank of assets and operations engaged in providing products or

services that are subject to risks and returns that are different from those of other
business segments. A geographical segment is engaged in providing products or services
within a particular economic environment that are subject to risks and returns different
from those of segments operating in other economic environments.
The Bank has appointed the Management committee charged with the responsibility of
allocating resources and assessing performance as the Chief Operating Decision Maker as
required under IFRS 8. The CODM is reviewed and advised by the Board for decisions
on significant transactions and or events.
(u) Ordinary Share Capital
i Share Issue Costs
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue
of new shares are shown in equity as a deduction, net of tax, from the proceeds.
ii Dividend on Ordinary Shares
Dividends on ordinary shares are recognised in revenue reserve in the period they are
approved by the Bank's shareholders.
27
Dividends for the year that are approved by the shareholders after the balance sheet date
are dealt with in the subsequent events note.
Dividends proposed by the Directors but not yet approved by members are disclosed in
the financial statements in accordance with the requirements of the Company and Allied
Matters Act 1990.
(v) Gifted Assets

The recording of the gift would be based on nature, lifetime and materiality of the gift. If
the gift is usable or has a material value addition to the business like Property, plant and
equipment would be recognized in an asset of appropriate category hence a debit, In
terms of credit several approaches are acceptable recognizing it to Owners equity via
Profit or Loss Account or Other Comprehensive Income. The Bank adapted recognition
through other comprehensive income to the owners’ equity.
(w) Investment property

An Investment Property is an investment in land or buildings held primarily for generating
income or capital appreciation and not occupied substantially for use in the operations of
the Bank. A piece of property is treated as an investment property if it is not occupied
substantially for use in the operations of the Bank, an occupation of more than 15% of the
property is considered substantial.
The initial Recognition is to be at its cost price while for subsequent measurement the
Bank adapted the fair value model which carry the investment properties in the balance
sheet at their market value and revalued periodically on a systematic basis at least once
in every three years in accordance with (IAS 40). Investment properties are not subject
to periodic charge for depreciation.
When there is a decline in value of an investment property, the carrying amount of the
property is written down to recognize the loss. Such a reduction is charged to the
statement of income. Reductions in carrying amount are reversed when there is an
increase, following a revaluation in accordance with the Bank’s policy, in the value of the
investment property, or if the reasons for the reduction no longer exist.
An increase in carrying amount arising from the revaluation of investment property is
credited to owners' equity as revaluation surplus. To the extent that a decrease in carrying
amount offsets a previous increase, for the same property that has been credited to
revaluation surplus and not subsequently reversed or utilized, it is charged against that
revaluation surplus rather than the statement of income.
An increase on revaluation which is directly related to a previous decrease in carrying
amount for the same property that was charged to the income statement is credited to
income statement to the extent that it offsets the previously recorded decrease.
Investment properties are disclosed separate from the property and equipment used for
the purposes of the business in line with IAS 40 (Investment Properties)
28
JAIZ BANK
3 Cash and Balances with Central Bank of Nigeria Mar-19 Dec-18

N '000 N '000
Cash 4,741,690 3,969,149
Current account with CBN 13,746,801 8,593,192
Deposit with CBN 13,762,933 10,804,990
CBN AGSMEIS Balance 42,420 42,420
As at 31 32,293,844 23,409,751
Cash on hand constitutes the aggregate cash balances in the vaults of the Bank branches
while Deposits with the Central Bank of Nigeria represent Mandatory Reserve Deposits(as
prescribed by the CBN) and are not available for use in the bank’s day–to–day operations.
4 Due from Banks and Other Financial Institutions Mar-19 Dec-18

N'000 N'000
Balances with banks within Nigeria:
First Bank Plc 256,271 236,096
a 256,271 236,096
Balances with banks outside Nigeria:
First Bank UK 6,292,996 6,320,529
Habib Bank UK - -
Banco De Sabadel 187,695 200,980
Standard Chartered 262,325 153,932
Bank Al-Bilad 304,102 189,307
Zenith Bank UK 173,222 307,218
b 7,220,340 7,171,967
As at 31 a+b 7,476,611 7,408,063

The balances held with Banks outside Nigeria substantially represent the Naira equivalent of
Foreign Currency balances held on behalf of customers in respect of Letters of Credit
transactions. The corresponding Liabilty is included in Margin Deposits under "Other
Liabilities" (see Note 18). The amount is not available for the day to day operations of the
Bank.
5 Total Sukuk Investment Mar-19 Dec-18
N'000 N'000
Opening Balance 18,965,012 6,068,953
Addition during the year 4,850,000 13,272,103
Disposal/Redemption (514,080) (376,044)
Gross investment in Sukuk 23,300,931 18,965,012
Premium 773,294 473,967
Rental Receivable 423,657 380,894
As at 31 24,497,883 19,819,872
Page 29
JAIZ BANK
The total sukuk investment is broken down into i and ii below:

i Osun State Sukuk Mar-19 Dec-18
N'000 N'000
Opening Balance 1,092,457 902,648
Addition during the year - 565,853
Disposal/Redemption (114,080) (376,044)
Gross investment in Sukuk 978,376 1,092,457
Premium 52,930 52,930
As at 31 1,056,959 1,183,720
JAIZ BANK
ii FGN Sovereign Sukuk Mar-19 Dec-18
N'000 N'000
Opening Balance 17,872,555 5,166,305
Addition during the year 4,850,000 12,706,250
Disposal/Redemption (400,000) -
Gross investment in Sukuk 22,322,555 17,872,555
Premium 720,364 421,037
As at 31 23,440,924 18,636,153
During the period, the Bank purchased, through the secondary market, Sukuk worth
N4.85billion. The rental payment is semi-annually while the principal redemption is a bullet
payment on maturity.
6 Investment in Musharaka Mar-19 Dec-18

N'000 N'000
Gross Investment in Musharaka - -
Allowance for impairement - -
As at 31 - -
7A Murabaha Receivables Mar-19 Dec-18

N'000 N'000
Murabaha Retail 5,867,641 7,030,831
Murabaha Corporate 18,370,336 21,642,820
Murabaha Staff 383 1,125
Murabaha SME 60,240 44,425
Gross Recievable 24,298,601 28,719,201
Allowance for impairment note 32b(ii) (1,844,308) (1,724,308)
Deffered Profit (1,427,671) (1,664,196)
As at 31 21,026,621 25,330,697
Page 30
JAIZ BANK
7B Investment in Bai Mu'ajjal 43525 2018

N'000 N'000
Bai Mu;ajjal Corporate 79,968 79,968
Gross Receivables 79,968 79,968
Deffered Profit - 15,149 - 20,782
As at 31 64,819 59,186
8 Investment in Istisna Mar-19 Dec-18

N'000 N'000
Istisna Recievable 1,520,243 2,024,325
Allowance for impairement note 32b(ii) (11,827) (11,827)
Deffered Profit (101,787) (146,841)
As at 31 1,406,630 1,865,656
9 Investment in Ijara Assets Mar-19 Dec-18

N'000 N'000
Ijara wa Iqtina 11,272,183 12,102,569
Ijara home finance 21,389 22,475
Ijara Auto & Others 260 260
Ijara Others 1,219,248 741,093
Gross investment in Ijara 12,513,079 12,866,397
Allowance for impairement note 32b(ii) (55,683) (55,683)
As at 31 12,457,396 12,810,714
JAIZ BANK
10 Qard Hassan Mar-19 Dec-18

N'000 N'000
Balance at 1 January 232,260 149,082
Granted to customers 14,600 83,178
Total during the year 246,860 232,260
Repayments
Staff Repayment 4,247 16,043
Customer Repayment 61,263 41,620
Total Repayment during the year 65,510 57,663
impairment Allowance note 32b(ii) (2,649) -2,649

Balance as at 31 178,701 171,948
The staff portion is made up of facilities granted to employees to buy the Bank's shares
under 2012 Private Placement exercise and facilities taken over by the Bank from their
previous employers. Staff under critical situations were also granted this type of facility. The
amount granted to customers during the year was N14.60million.
Page 31
JAIZ BANK
10ii Investment Properties Mar-19 Dec-18

N'000 N'000
Investment Properties Corporate 1,603,513 1,603,513
Gross Investment Properties 1,603,513 1,603,513
As at 31 1,603,513 1,603,513
Investment properties represents the summation of N1.5billion and N103.51million (the

rental income on the property for one year from 12 September 2018 to 11 September 2019)
totalling N1,603,512,500. The accrued rental of N25.88million (note 24) was recognized as
income while the balance of N49.43million is included as unearned income under other
liabilities (note 18b).
11i Investment in Assets Held for Sale Mar-19 Dec-18

N'000 N'000
Advances for LC Murabaha 3,867,704 3,045,817
Inventory for Sale 5,055,021 4,654,012
As at 31 8,922,725 7,699,830
(ii) Schedules Inventory for Sale N'000 N'000

Repossessed Property 951,513 831,513
Other Properties 1,431,221 1,444,221
Special Murabaha Inventory 1,310,000 1,310,000
Inventory Purchase-Fertilizer 749,417 749,417
Inventory Hajj Mat & Chemical 174,000 174,000
Inventory Hide & Skin - 964,116 144,861
Inventory JAMB Computers 1,402,985 -
Total Inventory for Sale 5,055,021 4,654,012
Page 32
JAIZ BANK

12 Property, Plant and Equipment
Freehold Building Office Motor Furnitures Computer Fixed Assets

Land Freehold Equipment Vehicle and Fixtures Equipment WIP Total
Cost N' 000 N' 000 N' 000 N' 000 N' 000 N' 000 N' 000 N' 000
1 January 2019
Cost 57,086 559,211 842,730 475,431 214,490 2,027,518 442,763 4,619,231
Additions/Reclassifiaction - 0 38,278 22,775 2,578 115,571 - 127,769 51,433
Transfer to Intergible Assets - 56,544 - 56,544
Disposals - - - - - - - -
31 March 2019 57,086 559,211 881,008 498,206 217,068 2,143,089 258,450 4,614,120
Accumulated depreciation
1 January 2019 - 26,735 429,220 238,253 139,362 1,207,073 - - 2,040,642
Depreciation - - 36,526 15,319 6,717 83,901 - 142,464
Adjustment - - - (2,286) 0 0 (2,286)
Disposals - - - - - - -
31 March 2019 - 26,735 465,747 251,286 146,079 1,290,974 - 2,180,821
Cost N' 000 N' 000 N' 000 N' 000 N' 000 N' 000 N' 000 N' 000
1-January-2018
Cost 3,086 495,327 676,346 405,207 181,608 1,608,113 - 276,101 3,645,788
Additions/Reclassifiaction 54,000 63,884 166,384 70,224 32,882 419,405 166,662 973,441
31 December 2018 57,086 559,211 842,730 475,431 214,490 2,027,518 442,763 4,619,231
Accumulated depreciation
1-January-2018 - 16,710 302,785 178,359 113,087 910,851 1,521,791
Depreciation - 10,025 126,481 64,083 26,550 296,222 - 523,362
Adjustment 0.00 0.01 -45.76 -4189.21 -275.91 0.20 0.00 0.00 -4510.66
31 December 2018 - 26,735 429,220 238,253 139,362 1,207,073 - 2,040,642
31 March 2019 57,086 532,476 415,262 246,920 70,990 852,115 - 258,450 2,433,299
31 December 2018 57,086 532,476 413,510 237,179 75,128 820,446 - 442,763 2,578,588
Page 33
JAIZ BANK
13 Leasehold Improvement Mar-19 Dec-18

Cost N'000 N'000
Adjustments - -
Addition 1,785 37,639
As at 31 850,243 848,458
Amortisation
Adjustments (420) (6,380)
Amortisation for the year 5,493 20,832
As at 31 795,413 790,340
Carrying amounts
As at 31 54,830 58,118
14 Intangible Assets Mar-19 Dec-18

N'000 N'000
Computer Computer
Cost software software
Addition 101,819 94,666
Disposal - -
As at 31 789,717 687,898
Amortisation and impairment losses

Amortisation for the year 19,427 64,204
As at 31 336,577 317,150
Carrying amounts
As at 31 453,140 370,748
Page 34
JAIZ BANK
15 Other Assets Mar-19 Dec-18

N'000 N'000
Sundry Debtors 473,701 360,498
Prepaid rent 401,599 450,254
Other prepayments 439,490 307,256
Prepaid Staff 392,549 106,658
Inventory and Other Security items 38,234 48,590
Branch development expenditure 487,276 308,905
Account receivables 243,968 319,005
Ijara accrued Profit 2,326,984 2,454,197
Settlement Suspense 2,490,000 948,276
Interbranch (7,674) 717
Total 7,286,128 5,304,356
Impairment of Other Assets (40,950) (40,950)
As at 31 March 7,245,178 5,263,406
Movement in other assets:

Mar-19 Dec-18
N'000 N'000
Balance at 1 January 5,263,406 4,676,323
Changes in the year 2,022,723 628,032
Impairment of Other Assets (40,950) (40,950)
As at 31 March 7,245,178 5,263,406
16a Tax Payable
Statement of Financial position Mar-19 Dec-18
N'000 N'000
Balance brought forward 90,345 135,677
Charge for the year 47,780 90,345
138,125 226,022
Less payment during the year - (135,677)
As at 31 March 138,125 90,345
ii) Income statement Mar-19 Dec-18

N'000 N'000
Company Income Tax 43,492 17,589
Education Tax 1,382 2,931
Information Technology levy 2,906 1,466
47,780 21,986
Deferred tax expenses
Deferred tax expenses(Origination/(Reversal) of temporary differences) - -
Balance at 31 March 47,780 21,986
Page 35
JAIZ BANK
FOR THE PERIOD ENDED 31 March 43555
16b Deferred Tax Asset Mar-19 Dec-18

N'000 N'000
Balance at 1 January 12,368 -
Deferred tax expenses(Origination/(Reversal) of temporary differences) - 12,368
Transfer to Deferred Liability - -
As at 31 March 12,368 12,368
Deferred Tax Liability Mar-19 Dec-18

N'000 N'000
Balance at 1 January - 14,641
Deferred tax expenses(Origination/(Reversal) of temporary differences) - - 27,009
Transfer to Deferred Assets - 12,368
As at 31 March - -
Page 36
JAIZ BANK
17 Due to customers Mar-19 Dec-18

N'000 N'000
Analysis by type of account
(17a) Current Account 46,792,714 45,950,138
(17b) Savings & JAPSA 26,215,665 36,716,950
(17b) Mudaraba Term Deposit 20,527,388 2,365,904
As at 31 93,535,766 85,032,992
Analysis by type of Depositor Mar-19 Dec-18

N'000 N'000
Government 868,902 906,691
Corporate 37,353,569 31,208,143
Individual 55,313,296 52,918,157
As at 31 93,535,766 85,032,992
The Bank has different Mudarabah Tenored Deposits which give customers the opportunity to choose from a
basket of Return available for different tenors.
(17b) Equity of Investment Accountholders Mar-19 Dec-18

N'000 N'000
Savings Account 22,116,274 18,603,819
Children saving Account 1,120,028 1,114,825
Jaiz premium Savings Account 2,977,504 16,998,306
Others including MTDs 20,268,217 2,365,904
As at 31 46,482,024 39,082,854
18a Other Financing Mar-19 Dec-18

N'000 N'000
Fund Sources Outside the Bank (CBN/CACS) 3,000,000 2,000,000
As at 31 3,000,000 2,000,000
This represents the balance on the on-lending facilities granted by the Central Bank of Nigeria in collaboration
with the Federal Government of Nigeria (FGN) under the Commercial Agriculture Credit Scheme (CACS).
The FGN is represented by the Federal Ministry of Agriculture and Rural Development) who has the aim of
providing concessionary funding for agriculture so as to promote commercial agricultural enterprises in
Nigeria. The facility is for a period of 7 years but should not exceed the exit date of the scheme in September
2025 at overall target profit rate of 9% The profit distribution ratio between the CBN as Capital Provider and
the NIFI as the Implementing Party is in the ratio of 2:7.
Page 37
18b Other Liabilities Mar-19 Dec-18
N'000 N'000
Manager Cheque 2,134,563 798,008
Margin Deposits 4,019,125 5,754,137
Accounts Payable 329,734 80,010
Vendors payable 120,875 284,144
Tax Liabilities 26,869 33,896
Profit payable to Mudararaba Savings Account 144,213 63,853
e-Banking Payables 816,850 357,102
Due to Charity 19 3,298
Sundry Payables 2,157,994 644,436
Accrued audit fee 3,799 13,263
Sundry Deposit 17,499 29,076
Impairment Balance on Off Balance Sheet Items 11,914 11,914
Unearned Income 49,427 72,171
Unaudited Profit 428,684 -
Other Payables 82,941 84,652
As at 31 10,344,506 8,229,960
Page 38
JAIZ BANK
19 Owners Equity
A Share capital
(i) Authorised Mar-19 Dec-18
N'000 N'000
50,000,000,000 Ordinary shares of N0.50 each 25,000,000 25,000,000
As at 31 March 25,000,000 25,000,000
(ii) Issued and Fully paid Share capital Mar-19 Dec-18

N'000 N'000
29,464,249,300 Ordinary shares of N0.50 each at 1 January 14,732,125 14,732,125
- -
As at 31 March 14,732,125 14,732,125
There was no movement in the share capital account during the year. The holders of ordinary shares are
entitled to receive dividends and each shareholder is entitled to a vote at the meetings of the Bank. All
ordinary shares rank equally.
20 Share Premium Mar-19 Dec-18

N'000 N'000
Balance as at 1 January 627,365 627,365
Movement during the year 0 -
As at 31 627,365 627,365
Share premium is the excess paid by shareholders over the nominal value for their shares. There was no
movement in share premium during the year.
21 Retained Earnings Mar-19 Dec-18

N'000 N'000
Balance at 1 January (4,574,108) (4,244,308)
Adjustment - -
Net profit for the year - 834,366
Statutory Regulatory Reserve - (250,310)
AGSMEIS - (44,885)
Risk regulatory reserve - (868,971)
As at 31 (4,574,109) (4,574,108)
Page 39
JAIZ BANK
22 Risk Regulatory Reserve Mar-19 Dec-18
N'000 N'000
Balance at 1 January 1,619,336 2,267,029
Impact of adopting IFRS 9 - (1,516,664)
Restated Opening Balance under IFRS9 1,619,336 750,365
Adjustment against retained earnings - 868,971
As at 31 1,619,336 1,619,336
22 i Statutory Reserve Mar-19 Dec-18

N'000 N'000
Adjustment against retained earnings - 250,310
As at 31 504,826 504,826
22ii(a) Other Comprehensive Income Mar-19 Dec-18

N'000 N'000
Balance at 1 January 112,313 -
Movement in the year - 112,313
As at 31 112,313 112,313
22ii(b) Agric-Business/Small and Medium Enterprises Investment Scheme Mar-19 Dec-18

N'000 N'000
Provision for the year - 44,885
As at 31 87,305 87,305
In April 2017, the Central Bank of Nigeria issued guidelines to govern the operations of the
Agriculture/Small and Medium Enterprises Scheme (AGSMIES), all Deposit Money Banks(DMBs) are
required to set aside 5% of their annual Profit After Tax (PAT).
22b CONTINGENT LIABILITIES

Mar-19 Dec-18
N'000 N'000
Advanced Payment Guarantees 5,203,960 7,303,629

Letters of Credit 3,548,895 5,701,475
Bonds and Guarantees 4,631,144 4,456,898
Wakala Guarantee 12,015,764 11,648,416
25,399,763 29,110,417
Page 40
JAIZ BANK
3 Months 3 Months
23 Income from Financing Contracts 31 Mar 2019 31 Mar 2018
N'000 N'000
Murabaha profit Corporate 801,498 676,878
Murabaha profit Retail 157,182 173,560
Murabaha LC Income 613 599
Bai Mu'ajjal Income 5,634 -
Total profit from Murabaha transactions 964,927 851,037
Ijara Transactions
Ijara wa Iqtina Profit 577,218 567,798
Ijara Finance Lease Profit 40,535 18,804
Ijara profit home finance 225 287
Ijara Others 98 156
Total profit from Ijara transactions 618,075 587,045
Others
Istisna Profit 71,750 50,732
Musharaka Profit - 60,123
InterBank Murabaha Income - 18,082
Total profit from other Financing/Investment Contracts 71,750 128,937
Total Income from financing Contracts 1,654,752 1,567,019
3 Months 3 Months
24 Income from investment activities 31 Mar 2019 31 Mar 2018
N'000 N'000
Trading Assets Income 93,614 52,736
Sukuk 817,435 249,085
Rental Income 25,878 -
Total Investment income 936,927 301,820
3 Months 3 Months
25 (i). RETURN ON EQUITY OF INVESTMENT ACCOUNT HOLDERS 31 Mar 2019 31 Mar 2018
N'000 N'000
Profit paid to Unrestricted Mudarabah Account Holders / Fees of Mudarib 480,777 479,148
Profit from Financing Investments paid to Mudarabah Account Holders 480,777 479,148
(ii) Mudarib fees/ profit of Joint Investments

Bank's fees as Mudarib. 944,547 835,319
Profit from the Bank's Joint Financing investments 1,166,355 554,373
Bank's fee as Mudarib/Profit of owned Joint Investmets 2,110,902 1,389,691
The Bank operates the Unrestricted type of Mudaraba Investment, in which the Mudarib (the Bank) is authorized
by the providers of Funds (Rabbul Mal) to invest their funds in the manner which the Mudarib deems
appropriate. Profits are shared as a common Percentage Rate rather than a Fixed amount. The Investments were
jointly funded by the Bank and the Equity of Investment Account holders. The amount of N0.48Billion was paid
by the Bank to the Mudaraba Account Holders for the period ended 31 March 2019
Page 41
JAIZ BANK
3 Months 3 Months
26 Fees and Commisssion 31 Mar 2019 31 Mar 2018
N'000 N'000
Banking Services 84,391 68,118
Net Income from E-Business 93,154 88,281
LC/Trade Finance Income 106,399 110,716
283,945 267,115
3 Months 3 Months
27 Other Operating Income 31 Mar 2019 31 Mar 2018
N'000 N'000
Wakala income 42,743 6,480
Miscellaneous Income 3,501 -
46,244 6,480
28 Other Comprehensive Income

3 Months 3 Months
31 Mar 2019 31 Mar 2018
Gifted Assets Income - -
- -
JAIZ BANK
FOR THE PERIOD ENDED 31 43555
3 Months 3 Months
29 Staff Costs 31 Mar 2019 31 Mar 2018
N'000 N'000
Salaries 669,025 574,856
Staff pension 33,521 24,705
Training and Seminar expenses 16,894 6,617
Other Staff Expenses 29,919 28,523
749,359 634,703
3 Months 3 Months
31 Mar 2019 31 Mar 2018
30 Depreciation and Amortisation
N'000 N'000
Depreciation of Property, Plant & Equipment 142,464 117,942
Amortisation of Leasehold Improvement 5,493 3,152
Amortisation of Intangible Assets 19,427 15,076
167,384 136,170
Page 42
JAIZ BANK
3 Months 3 Months
31(i) Operating Expenses 31 Mar 2019 31 Mar 2018
N'000 N'000
Advertising and marketing 26,886 37,302
Administrative - note 31 (ii) 502,317 433,300
Subscription and Professional fees 9,685 15,984
ACE's Expense 28,367 10,327
Rental charges (Occupancy Cost) 77,466 79,364
Licences 198,699 70,013
Bank Charges 15,560 10,512
Audit fee & Other Expenses 7,500 6,038
Directors expenses 61,404 53,004
927,883 715,845
3 Months 3 Months
31(ii) Administrative 31 Mar 2019 31 Mar 2018
N'000 N'000
Telephone expenses 1,281 1,114
Bandwith Connectivity 75,582 59,356
SWIFT/NIBBS Charges 9,942 3,355
Courier charges 2,603 4,643
Local and foreign travels 13,304 12,711
Printing & Stationaries 18,294 16,035
Repairs and maintenance 78,665 61,766
Security Related Expenses 18,614 15,560
Money and other Insurance 7,568 7,880
NDIC Premium 90,000 66,605
Fuel Expense 22,569 16,755
Service contract (HR and Admin) 98,797 87,178
Data Recovery & IT Related Expenses 484 40,582
Newspaper, Magazine & Periodicals 459 352
Entertainment 1,897 1,214
Penalty and Regulatory Expenses 8,927 5,000
Sundry expenses 41,858 17,825
Cash shortage W/O 726 51
Listing Expenses 1,642 2,895
Industry Certification 9,105 12,426
502,317 433,300
Page 43

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Jaiz Bank PLC: Unaudited Financial Statements For The Quarter Ended 31 MARCH 2019

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JAIZ BANK PLC

Equity of Investment Account Holders

Total Equity and Liabilities 120,127,559 108,462,458

Abdufattah O. Amoo, FCA (Chief Finance Officer)

Other Comprehensive Income

Earnings Per Share

3 Months 31 Mar 2018

Risk CBN Other

Total comprehensive income for the year 428,684 146,571

Working capital adjustment:

Sukuk Investment (4,678,011) (508,280)

Increase (Decrease) In Cash And Cash Equivalents 8,952,641 6,600,165

2 Change in accounting policies

(a) IFRS 15 Revenue from Contracts with Customers

2.1 New standards, interpretations and amendments to existing standards that

IFRS 16: Leases

2.2 Significant Accounting Policies

(a) Statement of compliance with International Financial Reporting Standards

2.3 Use of estimates and judgments.

(a) Transactions in Foreign Currencies

(b) Cash and Cash Equivalent

(c) Going Concern

(d) Financial instrument

 those to be measured at fair value either through other comprehensive income,

(i) Debt instruments

Business model assessment

Assessment of whether contractual cash flows are solely payments of principal

(ii) Financial liabilities at amortised cost

Modifications of financial assets and financial liabilities

Impairment of Financial Assets

Renegotiated financing facilities

The Bank has issued no loan commitment that is measured at FVTPL.

iii Impairment Provisions against Financing Contracts with Customers

iv Impairment of Investments at Fair Value through Equity

(f) Non-Current Assets

Construction cost in respect of offices is carried at cost as work in progress. On

Motor vehicle (5 years) 20%

Leasehold improvement over the period of the lease

(g) Intangible Assets

(h) Ijarah (Leasing)

(i) Murabaha Receivables from Banks

(m) Income Recognition

ii Ijarah Muntahia Bittamleek

vii Sale of Property under Development

Contract to construct a property; or

Contract for the sale of completed property

Where a contract is judged to be for the construction of a property, revenue is

viii Non-Credit Related Fee Income

a) Commission on negotiation of various letters of credit and overdue Profit on

x Earnings Prohibited by Shari 'a

xii Revenue from Sale of Goods

xiii Bank's Share as a Mudarib

xiv Expense Recognition

a) Profit on mudaraba payable (banks and non-banks)

Profit on these is accrued on a time-apportioned basis over the period of the

b) Return on Equity of Investment Account Holders

Return on equity of investment account holders is based on the income generated

i Current Income Taxation

iii Investments in Subsidiaries