TAJBank, Nigeria’s flagship non-interest lender, has secured regulatory clearance for the second tranche of its ambitious N100 billion Mudarabah Sukuk bond programme, announcing a new N20 billion issuance that offers a 20.5% annual return to investors.
The new issuance, officially announced on Tuesday, comes nearly two years after the bank broke new ground with its maiden N10 billion Sukuk bond in 2023. That inaugural offering—Nigeria’s first-ever Sukuk to be listed on the Nigerian Exchange—was oversubscribed by 115%, reflecting strong investor interest in sharia-compliant, profit-sharing investment options.
TAJBank’s second Sukuk tranche is structured under the Mudarabah model, where funds are pooled into profit-generating ventures managed by the bank, with investors entitled to a share of the profits. The bank said the latest issuance aims to broaden financial inclusion and attract ethically driven investors seeking stable returns amid volatile market conditions.
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“This second tranche presents another opportunity for individuals and corporate investors to stake their funds in an ethical instrument with a competitive 20.5% per annum return,” the bank said in a statement.
Alhaji Tanko Isiaku Gwamna, Chairman of TAJBank, said the bond aligns with the lender’s core commitment to providing investment alternatives that are grounded in transparency, shared risk, and equitable profit-sharing principles. He noted that the issuance will allow a broader group of investors to benefit from the bank’s business success while adhering to non-interest banking standards.
Reaffirming TAJBank’s performance, Managing Director Hamid Joda recalled his 2023 pledge during the listing of the maiden bond, when he assured stakeholders of strong and consistent returns.
“The board has been fulfilling that promise since then,” he said.
Partnering for Scale and Trust
AVA Capital Ltd., the lead issuing house for the bond, reiterated confidence in TAJBank’s capacity to deliver returns to investors. AVA’s CEO, Mr. Kayode Fadahunsi, described the new N20 billion issuance as a critical step toward completing the broader N100 billion Sukuk programme, calling it a “milestone for ethical finance in Nigeria.”
Fadahunsi also emphasized that TAJBank’s growth in the non-interest banking segment has laid a solid foundation for investor confidence.
“We are optimistic that this Sukuk will not only deepen Islamic finance but also offer compelling returns, especially for investors looking for lower-risk alternatives outside traditional markets,” he said.
Broader Momentum in Nigeria’s Islamic Finance Market
TAJBank’s move comes amid a broader surge in Nigeria’s Islamic finance landscape, which is witnessing renewed momentum after years of slow traction. According to Fitch Ratings, non-interest banks in Nigeria recorded a 110% year-on-year asset growth by the end of 2024—driven by increased deposits and lending, each more than doubling within the year.
Fitch also projects that the Islamic finance industry will expand significantly between the second half of 2025 and 2026, supported by new regulatory incentives, capital requirements, and rising investor demand for Sukuk and other sharia-compliant assets.
The growing appetite was further demonstrated when Nigeria’s Debt Management Office (DMO) announced that the Federal Government had secured over N2.2 trillion in Sukuk subscriptions since its inaugural issuance in 2017—a figure that reflects an oversubscription rate of 735%, despite a two-year pause in sovereign Sukuk offerings.
Analysts suggest that TAJBank’s 20.5% return structure offers a compelling case for conservative investors amid inflationary pressures and volatile returns from equities and other traditional assets.
TAJBank’s successful issuance is expected to serve as a catalyst for further private Sukuk offerings in Nigeria, helping to complement the government’s sovereign Sukuk issuances. With the bank’s overall Sukuk programme still holding N80 billion in unissued potential, more tranches are expected in the coming years, offering even wider access to Nigeria’s expanding ethical investment market.