unaudited nine months financial statement for jaiz bank plc ... - Proshare

UNAUDITED NINE MONTHS FINANCIAL STATEMENT FOR JAIZ BANK PLC SEPTEMBER 2017

INTRODUCTION Jaiz Bank PLC Unaudited 9 months Financial Statement as at 30th, September 2017 complies with the applicable legal requirements of the Nigerian Securities and Exchange Commission regarding interim financial statements. These financial statements are in accordance to the standards applicable to Islamic Banking Operations and procedures as well as IAS 34 ‘Interim Financial Reporting’ its interpretation issued by the International Accounting Standards and adopted by the Financial Reporting Council of Nigeria.

Statement of Directors’ Responsibilities in Relation to the Financial Statements for financial year ended September 30, 2017 The Directors accept responsibility for the preparation of the financial statements that give a true and fair view in accordance with the requirements of the International Financial Reporting Standards, the Financial Accounting Standards issued by AAOIFI, the Financial Reporting Council of Nigeria Act 2011, the Banks and Other Financial Institutions Act, CAP B3, LFN 2004, and relevant Central Bank of Nigeria regulations. The Directors further accept responsibility for maintaining adequate accounting records as required by the Companies and Allied Matters Act of Nigeria and for such internal control as the Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement whether due to fraud or error. Going Concern: The Directors have made assessment of the Company’s ability to continue as a going concern and have no reason to believe that the Bank will not remain a going concern in the years ahead. Resulting from the above, the directors have a reasonable expectation that the company has adequate resources to continue operations for the foreseeable future. Thus, directors continued the adoption of the going concern basis of accounting in preparing the annual financial statements. Board Resolution: At the 23rd Meeting of the Board of Directors of the Bank held on October 25, 2017 at the Bank’s Board Room, Kano House Plot 73, Ralph Shodeinde Street, Central Business District Abuja, the following resolution was proposed and duly passed: “That the Bank’s Un-Audited 9 months Financial Statement for the period ended September 30, 2017 be and is hereby approved. SIGNED ON BEHALF OF THE DIRECTORS BY:

Abdullahi Usman, FCA Chief Financial Officer FRC/2017/ICAN/00000016235

Hassan Usman, FCA Managing Director/CEO FRC/2013/ICAN/0000003984

JAIZ BANK

STATEMENT OF FINANCIAL POSITION AS AT 30 SEPTEMBER 2017 Assets Cash and Balance with Central Bank of Nigeria Due from Banks and Financial Institution InterBank Murabaha Sukuk Murabaha Recievables Investment in Musharaka Investment in Qard Hassan Investment in Istisna Investment in Ijara Asset Investment in Salam Asset Investment in Asset Held for Sale Property, Plant and Equipment Leasehold Improvement Intangible Assets Other Assets Deferred Taxation Total Assets

30-Sep-17

31-Dec-16

30-Sep-16

N'000

N'000

N'000

3 4 5 5 6 7 8 9 10 10i 11 12 13 14 15 16b

21,160,977 8,417,245 6,068,953 17,741,405 1,191,178 122,138 700,600 13,879,505 19,924 764,432 2,073,124 37,222 355,341 7,794,431 1,772,577 82,099,052

21,506,853 1,478,025 1,000,000 1,060,252 16,451,245 1,191,704 127,674 754,448 14,251,232 488,942 1,892,970 42,435 368,089 5,233,382 1,772,577 67,619,828

19,191,993 1,369,976 1,011,754 1,108,290 14,516,837 1,187,000 147,369 832,500 13,412,215 364,079 1,709,885 54,160 371,652 5,714,520 1,726,574 62,718,804

(17a) 18a 18b 16a

25,639,299 10,111,705 35,751,004

24,415,544 996,635 1,552,659 77,087 27,041,925

19,388,180 996,635 1,810,552 55,102 22,250,469

28,877,648 1,998,235 30,875,883

24,924,792 943,323 25,868,115

25,864,577 107,335 25,971,912

14,732,125 627,365 (1,341,480) 1,360,774 93,381 15,472,165

14,732,125 627,365 (2,103,857) 1,360,774 93,381 14,709,788

14,732,125 627,365 (1,604,961) 741,894 14,496,423

82,099,052

67,619,828

62,718,804

Notes

Liabilities Customer Current Deposit Other Financing Other Liabilities Tax payable Total liabilities Equity of Investment Account Holders Financial Institutions' Investment Accounts Customers' Unrestricted Investment Accounts Mudaraba Term Deposit

(17b) (17c)

Owners' Equity Share Capital Share Premium Retained Earnings Risk Regulatory reserve Statutory Reserve Total Equity

19 20 21 22 22i

Total Equity and Liabilities

Abdullahi Usman, FCA

Hassan Usman, FCA

Chief Financial Officer

Managing Director/CEO

FRC/2017/ICAN/00000016235

FRC/2013/ICAN/0000003984

1

JAIZ BANK

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 SEPTEMBER 2017 2017

Income: Income from Financing Investment Income from Sukuk Gross Income from Islamic fiancing transactions

Notes

2016

9 Month 3 Month 9 Month Eneded Eneded 30 Sept Eneded 30 Sept 30 Sept N'000 N'000 N'000

23 24

3 Month Eneded 30 Sept N'000

4,541,304 424,089 4,965,393

1,587,953 130,740 1,718,693

3,926,520 144,663 4,071,183

1,461,873 46,312 1,508,185

(919,288) 4,046,105 230,000 3,816,105

(332,834) 1,385,859 60,000 1,325,859

(876,566) 3,194,617 123,503 3,071,114

(305,411) 1,202,774 60,006 1,142,768

26 27 28

817,182 110,019 59,298 4,802,604

226,795 40,000 59,298 1,651,952

233,345 38,640 9,186 3,352,285

47,433 9,186 1,199,387

29 30 31

1,713,237 400,581 1,909,091

606,285 123,158 683,078

1,488,936 381,762 1,374,420

496,105 135,366 613,413

4,022,909

1,412,521

3,245,118

1,244,884

Operating Profit/(Loss) Income Tax Expenses

779,695 -

239,431

107,167 -

45,497 -

Profit/(Loss) for the Year after Tax

779,695

239,431

107,167 -

45,497

-

-

Return on Equity of Investment Account Holders Bank's share as a Mudarib/Equity investor Provision for Finance Impairments Net Spread After Provision Other Income Fee and commisssion Other Operating Income Non Trading Exchange (Loss)/Gain Total Income Expenses: Staff costs Depreciation and Amortisation Other Expenses

25(i) 25(ii)

-

Total Expenses

Other compreehensive income: Other comprehensive income for the year, net of tax Total comprehensive income for the year

779,695

Basic Earnings per share

0.05

The notes on pages 23 to 80 forms an integral part of these financial statements

2

239,431

-

-

107,167

(45,497)

0.01

-

JAIZ BANK STATEMENT OF CHANGE IN EQUITY FOR THE PERIOD ENDED 30 SEPTEMBER 2017

Share Capital

Balance at 1 January 2017 Profit for the year Balance at 30 September 2017

N'000 14,732,125 14,732,125

30 September 2017 Share Premium

N'000 627,365 627,365

Retained Earnings

N'000 (2,103,857) 779,695 (1,325,916)

Risk Regulatory Reserve

N'000 1,360,774 1,360,774

CBN Intervention

Statutory Reserve

N'000 93,381 93,381

N'000 14,694,224 779,695 15,472,165

CBN Intervention

Statutory Reserve

Total

N'000 (15,564) (15,564)

Total

30 September 2016 Share Capital

Balance at 1 January 2016 Profit for the year Balance at 30 September 2016

N'000 14,732,125 14,732,125

Share Premium

N'000 549,886 627,365

Retained Earnings

N'000 (1,714,073) 107,167 (1,604,961)


N'000 741,894 741,894

N'000 -

N'000 -

N'000 14,309,832 107,167 14,496,423


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JAIZ BANK

STATEMENT OF CASH FLOWS FOR THE PERIOD ENDED 30 SEPTEMBER 2017 2017 N'000

2016 N'000

779,695

107,167

12 27 14 13 32 (b) 31

340,511 42,738 17,332 230,000 141,586 (59,298) 1,492,564

266,698 (40) 34,898 80,167 123,503 123,876 (9,186) 727,083

5 5 6 8 9 10 11 15 (17a) 18a 18b 16a

1,011,754 (4,960,663) (3,198,925) 25,179 122,678 (574,463) (400,353) (1,862,137) 6,251,119 (996,635) 8,301,153 (77,087) 5,134,184

42,493 (149,495) 3,967,337 (28,466) (40,022) 561,570 1,607,529 5,520,270 (11,657,903) 996,635 (5,468,157) (3,921,126)

12 14

(940,539) (40,295) (25,504) (1,006,338)

(542,406) (98,669) (50,098) (691,173)

15,564 4,903,971 4,888,407

(2,902,425) 745,126 (9,260) (1,239,020) (3,405,579)

9,016,253 20,561,969 29,578,222

(8,017,878) 28,579,847 20,561,969

Notes Cash flow from operating activities Net profit/(loss) before tax Adjustments for non cash items: Depreciation Profit on Disposal of Non-Current Asset- Motor Vehicle Amortization of Intangible Assets

Amortisation of leasehold Improvement Provision for financing impairment Amortisation of prepaid rent Non trading foreign exchange (gain)/loss Operating profit before changes in operating asset and liabilities Working capital adjustment: Interbank Murabaha Sukuk Murabaha recievables Qard Hassan Istisna Ijara rental recievables Investment in trading assets Other assets Customers' current account

Other Financing

Other liabilities Tax paid Net cash from/(used in) operating activities INVESTING ACTIVITIES

Purchase of property, plant & equipment Purchase of intangible assets Disposal of property, plant & equipment Improvement on leasehold properties

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Net cash used in investing activities FINANCING ACTIVITIES

Shares issued Cleasing of pre-operating non-allowable income Prior year adjustment Customers investment accounts

21 (17b)

Net cash provided by (used in) financing activities Increase (Decrease) In Cash And Cash Equivalents

Cash and cash equivalents at beginning of year Cash And Cash Equivalents At 30 September

#NAME?

-


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JAIZ BANK

STATEMENT OF SOURCES AND USES OF QARD FUND FOR THE PERIOD ENDED 30 SEPTEMBER 2017

2017 N'000 Qard Hasan Receivables

2016 N'000 Qard Hasan Receivables Total 118,903 118,903 5,135 5,135 124,038 124,038

Balance at 1 January Share loans to staff Staff loans Loans to customers Others Total uses during the year

147,369 147,369

Total 147,369 147,369

Repayments & Impairment Balance at 31 December

25,231 122,138

25,231 122,138

(23,331) 147,369

(40,243) 164,281

Sources of qard fund Contribution by the bank

122,138

122,138

147,369

164,281

The purpose of this Statement is to disclose the status of the financial accommodation that was granted to members of staff when they bought the Bank's shares under 2012 Private Placement Exercise as well as the status of Staff Loans taken over by the Bank as a result of recruitment from other Banks. Staff under critical situations were also granted this type of accommodation.

JAIZ BANK

STATEMENT OF SOURCES AND USES OF CHARITY FUND FOR THE YEAR ENDED 30 SEPTEMBER 2017

2017 N'000

2016 N'000

Undistributed Charity funds at the beginning of the year Non-permissible income during the year Total Sources Of Charity Funds During The Year

13,193 20,126 33,319

660,958 97,361 758,319

Uses of Charity Funds Transfer to Jaiz Foundation Philontropic Activities Total uses of funds during the year

33,318 33,318

745,126 745,126

Sources of Charity Funds

Undistributed charity funds at the end of the year This Statement discloses how the Non-permissible Income was being dispensed with.

13,193

JAIZ BANK NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30TH SEPTEMBER, 2017 1 Reporting entity Jaiz Bank Plc is the first fully fledged non-interest financial institution in Nigeria. The Bank commenced operation on January 6th, 2012 with three benaches 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 30 September 2017, is only for the Bank as it has no subsidiary and/or Associate company. 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 board of the Bank. (b) Basis of Preparation, Accounting Judgments & Estimates. 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. 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. The most significant uses of judgments and estimates are as follows: i 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. ii Fair Value of Unquoted Equity Securities and Investment Properties Fair value shall be determined for each investment individually in accordance with the valuation policies of the Bank. Where the fair values of the Bank's unquoted equity securities cannot be derived from an active market, they shall be derived using a variety of valuation techniques. Judgment by management is required to establish fair values through the use of appropriate valuation models, consideration of comparable assets, discount rates and the assumptions used to forecast cash flows. Investment properties and investments in real estate projects shall be carried at fair value as determined by independent real estate valuation experts. The determination of the fair value for such assets requires the use of judgment and estimates by the independent valuation experts that are based on local market conditions existing at the date of the statement of financial position.

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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 1% 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. (c) 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.

(c) 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 should be 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 Furniture and fittings Equipment Computer Equipment- General Computer Equipment- Special Computer software Freehold Buildings Leasehold building over the expected life of the lease

(6 years) (5 years) (5 years) (3 years) (5 years) (10 years) (50 years)

16.67% 20% 20% 33% 20% 10% 2%

8

Leasehold improvement over the period of the lease

9

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. (e) Inatngible 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.

(f) Financial Instruments – Initial Recognition and Subsequent Measurement All financial assets and liabilities are initially recognized on the trade date, i.e. the date that the Bank becomes a party to the contractual provisions of the instrument. The classification of financial instruments at initial recognition depends on the purpose and the management's intention for which the financial instruments were acquired and their characteristics. All financial instruments are measured initially at their fair value plus transaction costs, except in the case of financial assets recorded at fair value through income statement.

(g) 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. (h) 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. (i) 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.

(j) 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.

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(k) Impairment of Investment in Risk Assets At each balance sheet date, the Bank assesses whether there is objective evidence that the financial assets are impaired. Financial assets are impaired when objective evidence demonstrates that a loss event has occurred after the initial recognition of the asset, and that the loss event has an impact on the future cash flows of the asset that can be measured reliably. The Bank considers impairment both at individual asset level and also at collective level. All individually significant assets are assessed for specific impairment. Assets found not to be impaired individually are assessed collectively for any impairment that has been incurred but not identified earlier. Insignificant assets are tested for impairment collectively. Impairment loss on assets classified at amortized cost are measured as the difference between the carrying value of the asset and the present value of future cash flows discounted at the initial assets effective profit rate. Losses are recognized in the income statement of the period the loss is incurred. Also, provision is determined from a specific assessment of each customer's account in accordance with the Central Bank of Nigeria's (CBN) Prudential Guidelines. A minimum general provision of 1% is made on all risk assets, which have not been specifically provided for. Profit and/or principal that is outsatnding 90 days but less than 180 days 180 days but less than 360 days 360 days and over

Classification Substandard Doubtful Loss

Provision 10% 50% 100%

When an investment is deemed not collectible, it is written off against the related provision for impairments and subsequent recoveries are credited to the provision for loan losses in the statement of income. If the amount of the impairment subsequently decreases due to an event occurring after the write-down, the release of the provision is credited as a reduction of the provision for impairment in the statement of income. Risk assets in respect of which a previous provision was not made are written directly to the statement of income when they are deemed to be irrecoverable. (l) Income Recognition 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. v Fees and Commission Income The Bank earns fee and commission income from a diverse range of services it provides to its customers.

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vi 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. vii Non-Credit Related Fee Income This is recognized at the time the services have been performed and delivered or the transaction has been completed. viii 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. ix Earnings Prohibited by Shari 'a The bank is committed to avoid recognizing any income generated from non-Islamic sources. Accordingly, all nonpermissible income is transferred to charity. x Service Income Revenue from rendering of services is recognized when the services are rendered. xi 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. xii 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. xiii 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. m Transactions in Foreign Currencies i The financial statements are presented in Nigerian Naira, which is the reporting currency in line with IAS21 (Effects of foreign exchange) ii Transactions in foreign currencies are recorded in the books at the rate of exchange ruling on the date of the transactions. iii 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 to be taken to the statement of income.

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iv 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. 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.

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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). ii Deffered 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 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 Statement of Income Investments at fair value through statement of income include investments designated upon initial recognition as investments at fair value through statement of income. Financial assets carried at fair value through statement of income are recognised at fair value, with transaction costs recognised in the consolidated statement of income. Investments classified as 'at fair value through statement of income’ are subsequently measured at fair value. The unrealized gains and losses arising from the remeasurement to fair value are included in the consolidated statement of income. iii 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.

iv 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. 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 Retirement Benefits

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Retirement benefits to employees are provided under a defined contribution scheme, which is funded by contribution from the bank and employees. Funding under the new scheme is 8.0% by staff 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.

15

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 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 group 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 Offsetting Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right or shariah requirement to set off the recognized amounts and there is an intention to settle on a net basis, or realize the asset and settle the liability simultaneously.

16

v 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 Niara 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. w 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 appropriated from revenue reserve in the period they are approved by the Bank's shareholders. 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.

17

JAIZ BANK NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30TH SEPTEMBER, 2017 3

Cash and Balance with Central Bank of Nigeria

30-Sep-17 N'000 3,542,780 7,446,091 10,172,106 21,160,977

Cash on Hand Current account with CBN Deposit with CBN As at 30 September

31-Dec-16 2,580,732 6,301,422 12,624,699 21,506,853

30-Sep-16 N'000 2,439,777 4,700,857 12,051,359 19,191,993

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 Financial Institution Balance with banks within Nigeria: First Bank Plc Balance with banks outside Nigeria: First Bank UK Habib Bank UK Commerzbank AG Standard Chartered Bank Al-Bilad

As at 30 September

a

b a+b

30-Sep-17 N'000

31-Dec-16

30-Sep-16 N'000

930,613 930,613

438,483 438,483

472,490 472,490

4,808,142 705,107 2,536,329 66,149 224,939 6,189 5,977 135,972 49,324 7,486,632 1,039,542

557,892 43,556 246,714 49,324 897,486

8,417,245

1,478,025

1,369,976

The balance held with Banks outside Nigeria substantially represent the Naira equivalent of Foreign Currency balance held on benfit of Customers in respect of Letter 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

InterBank Murabaha InterBank Murabaha InterBank Murabaha Deferred Profit As at 30 September

5

Sukuk Opening Balance Addition during the year Gross investment in Sukuk Part Liquidation during the period As at 30 September

30-Sep-17 31-Dec-16 N'000 1,054,247 54,247 1,000,000

30-Sep-16 N'000 1,054,247 42,493 1,011,754

30-Sep-17 31-Dec-16 N'000 1,108,290 1,242,396 5,118,267 6,226,557 1,242,396 (157,604) 182,144 6,068,953 1,060,252

30-Sep-16 N'000 958,795 149,495 1,108,290 1,108,290

In 2013 the Bank invested N1,000,000,000 in a sukuk issued by Osun Sstate Government at 14.5% Return on Investment. In 2014 the Investment was increased to N2,400,000,000 through Secondary Market purchase. The Sukuk has a seven-year Tenor with terminal date of 2020. Principal Repayment will commence from january 2015. Additional N8Billion was deposited for FGN Sovereign Sukuk as the date of this report.

18


Murabaha Recievables Murabaha Retail Murabaha Corporate Murabaha Staff Murabaha Related Party Gross Recievable Allowance for impairment Deffered Profit As at 30 September

7

Investment in Musharaka Gross Investment in Musharaka Allowance for impairement As at 30 September

8

Investment in Qard Hassan Share loan to staff Loan to customers Gross investment in Qard Hassan Allowance for impairement As at 30 September

9

Investment in Istisna Istisna Recievable Allowance for impairement Deffered Profit As at 30 September

10

Investment in Ijara Asset Ijara wa Iqtina Ijara home finance Ijara Auto & Others Ijara Others Gross investment in Ijara Allowance for impairement As at 30 September Investment in Salam Asset Salam Corporate Gross Investment in Salam Allowance for impairement Deffered Profit As at 30 September

11

Investment in Asset Held for Sale Unsold Inventory of Properties Advance for LC Murabaha-in-Transit Inventory-Murabaha Corp. Finance As at 30 September

30-Sep-17 N'000 4,151,694 15,183,217 6,766 16,539 19,358,216 (150,226) (1,466,585) 17,741,405

31-Dec-16 N'000 4,172,717 14,375,505 10,464 21,027 18,579,713 (129,079) (1,999,389) 16,451,245

30-Sep-16 N'000 3,816,187 12,812,649 12,605 25,542 16,666,983 (175,869) (1,974,277) 14,516,837

30-Sep-17 N'000 1,200,000 (8,822) 1,191,178

31-Dec-16 N'000 1,200,000 (8,296) 1,191,704

30-Sep-16 N'000 1,200,000 (13,000) 1,187,000

30-Sep-17 N'000 147,369 7,986 122,190 (52) 122,138

31-Dec-16 N'000 147,242 147,242 (19,568) 127,674

30-Sep-16 N'000 147,369 147,369 147,369

30-Sep-17 N'000 994,233 (184,209) (109,424) 700,600

31-Dec-16 N'000 1,099,753 (123,889) (221,416) 754,448

30-Sep-16 N'000 1,265,839 (174,987) (258,352) 832,500

30-Sep-17 N'000 13,411,782 24,135 254 550,436 13,986,607 (107,102) 13,879,505

31-Dec-16 N'000 13,648,825 25,660 251 675,073 14,349,809 (98,577) 14,251,232

30-Sep-16 N'000 13,024,689 25,868 365 575,568 13,626,490 (214,275) 13,412,215

30-Sep-17 N'000 21,477 21,477 (430) (1,123) 19,924

31-Dec-16 N'000

30-Sep-16 N'000 -

30-Sep-17 N'000 746,606 17,826 764,432

31-Dec-16

-

-

32,263 456,679 488,942

-

30-Sep-16 N'000 35 65,830 298,284 364,079 19

As at 30th September, the Bank has sold off all it's stock of properties.

20

JAIZ BANK NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30TH SEPTEMBER, 2017 12 Property, Plant and Equipment

Cost 1 January 2017 Cost Additions/Reclassifiaction Disposals Adjustment 30 September 2017

Freehold Land

Building Freehold

Office Equipment

Motor Vehicle

Furnitures and Fixtures

Computer Equipment

Library Books

Fixed Assets WIP

Total

N' 000

N' 000

N' 000

N' 000

N' 000

N' 000

N' 000

N' 000

N' 000

1,000

460,849 352,703

491,761 207,824

303,315 # 80,438

149,741 34,125

1,374,232 43,240

-

214,272 222,209

1,000

(318,225) 495,327

(42,704) 656,881

(2,000) # 381,753

(9,081) 174,785

(6,803) 1,410,669

-

(54,758) 381,723

2,995,170 940,539 (433,571) 3,502,138

618,606 174,082 59,434 852,122

196 168 (364) -

-

Accumulated depreciation 1 January 2017 Depreciation Adjustment Disposals 30 September 2017 Cost 1-January-2016 Cost Additions/ Reclassification Disposals 31 December 2016

4,008 3,512 7,520

160,802 85,850 29,239 275,891

131,274 60,651 (4,619) 187,306

80,905 19,760 5,510 106,175

144,727 (143,727) 1,000

130,924 329,925 460,849

296,327 195,434 491,761

233,955 69,360 303,315 #

128,962 20,779 149,741

Accumulated depreciation 1-January-2016 Depreciation Adjustment 31 December 2016

-

4,008 3,512 7,520

116,798 73,269 190,067

100,294 43,799 (973) 143,120 #

144,727 144,727

130,924 11,700 142,624

296,327 152,730 449,057

233,955 67,360 #

-

4,008 -

116,798 44,004

4,008

Netbook value 30 September 2017

(6,520)

31 December 2016 30 September 2016

Cost 1 January 2016 Cost Additions/ Reclassification Disposals 30 September 2016 Accumulated depreciation 1 January 2016 Depreciation Disposals 30 September 2016

-

-

995,791 340,511 92,712 1,429,014

1,177,039 197,193 1,374,232

350 (350) -

214,272 214,272

2,112,284 882,886 2,995,170

60,735 25,680 86,415

447,129 227,949 675,078

130 (130) -

-

729,094 374,079 (973) 1,102,200

128,962 11,698 140,660

1,177,039 190,390 1,367,429

350 350

159,514 159,514

2,112,284 542,406 2,705,676

100,294 30,980 #

60,735 20,170

447,129 171,477

130 66

160,802

131,274

80,905

618,606

196

-

729,094 266,697 995,791

219,436

469,575

275,578

(677,337)

1,410,669

-

381,723

2,073,124

1,000

453,329

301,694

160,195

63,326

699,154

-

214,272

1,892,970

144,727

138,616

288,255

170,041

59,755

748,823

154

159,514

1,709,885

301,315

-

-

21

22


Leasehold Improvement Cost Balance at 1 January Adjustments Addition As at 30 September Amortisation Balance at 1 January Adjustments Amortisation for the year As at 30 September Carrying amounts As at 30 September

14

Intangible Assets Cost Balance at 1 January Addition Disposal Adjustments As at 30 September Amortisation and impairment losses Balance at 1 January Amortisation for the year Reclassification As at 30 September Carrying amounts As at 30 September

30-Sep-17 N'000 795,549 (15,877) 25,504 805,176

31-Dec-16 N'000 729,574 65,975 795,549

30-Sep-16 N'000 729,574

753,114 (2,492) 17,332 767,954

647,069 (2,167) 108,212 753,114

647,069 (1,724) 80,167 725,512

37,222

42,435

54,160

2017 N'000 Computer software 563,242 40,295 (10,305) 593,232

31-Dec-16 N'000 Computer software 454,268 108,974

2016 N'000 Computer software 454,268 98,669 -

563,242

552,937

195,153 42,738 237,891

146,388 48,765 195,153

146,388 34,897

355,341

368,089

371,652

50,098 779,672

181,285

23

JAIZ BANK NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30TH SEPTEMBER, 2017 15 Other Assets Sundry Debtor Prepaid rent Prepaid Sukuk Premium Other prepayments Prepaid Staff Inventory-Cheques, Printing and ATM Card Due from staff Branch development expenditure Account recievables Ijara accrued Profit Due from Banks - ATM Transactions Operating Suspense Interbranch Total Impairment of Other Assets As at 30 September

Movement in impairment of other assets: Balance at 1 January Charge for the year Impairment of Other Assets As at 30 September

30-Sep-17

31-Dec-16

30-Sep-16

N'000 469,284 483,553 54,924 319,190 123,353 1,911,610 190,482 1,261,839 2,431,079 595,246 (5,179) 7,835,381 (40,950) 7,794,431

N'000 100,637 350,609 68,655 175,520 85,561 43,146 227,282 1,549,048 2,145,570 20,693 477,525 51,707 5,295,953 (62,571) 5,233,382

N'000 102,524 355,140 73,232 381,536 182,674 49,724 340,234 2,195,851 1,857,121 20,691 244,212 50,111 5,853,050 (138,530) 5,714,520

30-Sep-17 N'000 5,233,382 2,601,999 (40,950) 7,794,431

31-Dec-16 N'000 3,983,853 1,312,100 (62,571) 5,233,382

30-Sep-16 N'000 3,983,853 1,869,197 (138,530) 5,714,520

24

JAIZ BANK

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST SEPTEMBER, 2017 16a Taxation i) Statement of Financial position

132,850.00 (55,763.00) 77,087.00

30-Sep-16 N'000 43,897.00 11,205.00 55,102.00 55,102.00 55,102.00

2017 N'000 -

Deferred tax expenses Deferred tax expenses

61,960.00 12,392.00 3,396.00 77,748.00

2016 N'000 -

-

(46,003.00)

-

Balance at 30 September

-

31,745.00

-

30-Sep-17 N'000 1,772,577

31-Dec-16

30-Sep-16 N'000 1,772,577 1,726,574

Balance brought forward Prior Year Tax Adjustment Charge for the year Add under provision in previous years Taxation Less payment for the year As at 30 September ii)

Income statement Company income Education tax Information technology levy

16b Deferred Taxation Balance at 1 January Provision for the year As at 30 September (b) Reconciliation of effective tax rate Profit for the period Total income tax expense Profit excluding income tax Income tax using the Company’s domestic tax rate As at 30 September

30-Sep-17 N'000 77,087.00 77,087.00 77,087.00 (77,087.00) -

1,772,577 30-Sep-17 N'000 779,695 779,695 249,502 249,502

31-Dec-16 43,897.00 11,205.00 77,748.00 132,850.00

1,726,574 46,003 1,772,577 31-Dec-16 311,272 31,745 343,017 109,765 109,765

30-Sep-16 N'000 107,167 107,167 34,293 34,293

25


Due to customers

Analysis by type of account (17a) Current Account (17b) Mudaraba Investment Account (17c) Mudaraba Term deposit

30-Sep-17 N'000 25,639,299 28,877,648 1,998,235

31-Dec-16 N'000 24,415,544 24,924,792 943,323

30-Sep-16 N'000 19,388,180 25,864,577 107,335

As at 30 September

56,515,182

50,283,659

45,360,092

Analysis by type of Depositor

30-Sep-17 N'000 902,613 18,261,339 37,106,622 56,270,574

31-Dec-16 N'000 1,665,527 18,661,339 29,956,793 50,283,659

30-Sep-16 N'000 1,566,253 14,532,240 29,261,599 45,360,092

Analysis by maturity All the customers deposit are analysed by maturity into Current and Savings as follows: 30-Sep-17

31-Dec-16

30-Sep-16

N'000 25,639,299 13,097,552 15,780,096 1,998,235 56,515,182

N'000 24,415,544 12,530,257 12,394,535 943,323 50,283,659

N'000 19,388,180 12,256,566 13,608,011 107,335 45,360,092

Government Corporate Individual As at 30 September

Current Deposits Savings Deposits 30days Deposits (JAPSA) 60days Mudaraba Term Deposit As at 30 September

The Bank has introduce Mudarabah Tenored Deposits which has give customers the opportunity to choose from a basket of Return available for different tenors.

(17b) Equity of Investment Accountholders Savings Account Children saving Account Jaiz premium Savings Account Others including MTDs As at 30 September 18a Other Financing Fund Sources Outside the Bank (CBN/CACS) As at 30 September 18b Other Liabilities MC/Margin Deposits Accounts Payable Vendors payable Other Tax Liabilities Profit payable to Mudararaba Savings Account e-Banking Payables Due to Charity Sundry Payables Accrued audit fee Sundry Deposit Due to Mudaraba Depositors Other Accurals Other Payables As at 30 September

30-Sep-17 N'000 11,614,001 677,527 15,780,096 2,549,086 30,620,710

31-Dec-16 N'000 11,436,159 602,294 12,394,535 1,435,127 25,868,115

30-Sep-16 N'000 11,280,707 537,308 13,608,011 545,886 25,971,912

30-Sep-17 N'000 -

31-Dec-16 N'000 996,635 996,635

30-Sep-16 N'000 996,635 996,635

30-Sep-17 N'000 5,198,550 61,948 66,986 56,804 35,247 134,343 1 4,270,681 26,967 10,113 63,994 186,071 10,111,705

31-Dec-16 N'000 546,640 191,326 52,862 109,456 10,183 53,200 51 322,462 12,109 10,398

30-Sep-16 N'000 651,398 152,420 47,038 97,569 1,810 25,234 314 612,041 15,200 11,648 27,596 168,284 1,810,552

33,506 210,466 1,552,659

The sundry payable account include the money deposited by customers for FGN Sovereign Sukuk as at the reporting date.

26

JAIZ BANK NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH SEPTEMBER, 2017 19

Owners Equity

A

Share capital (i) Authorised

31-Dec-16 N'000

30-Sep-16 N'000

15,000,000,000 Ordinary shares of N1 each (30 September 2017: 15,000,000,000 of N1 each)

15,000,000

As at 30 September

15,000,000

15,000,000

13,000,000

14,732,125,000 Ordinary shares of N1 each At 1 January

30-Sep-17 N'000 14,732,125

As at 30 September

14,732,125

31-Dec-16 N'000 11,829,700 2,902,425 14,732,125

30-Sep-16 N'000 11,829,700 2,902,425 14,732,125

Share Premium

30-Sep-17 N'000

31-Dec-16 N'000

30-Sep-16 N'000

627,365

549,886 77,479

549,886 77,479

(ii) Issued and Fully paid Share capital

20

30-Sep-17 N'000

4,215,259,125 shares issued at 15 kobo prmium during the 2012 financial year CBN Provission (Due from Shareholders) As at 30 September

627,365

15,000,000

627,365

13,000,000

627,365

27

JAIZ BANK

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST SEPTEMBER, 2017 21

Retained Earnings Balance at 1 January Curreny Year Adjustment Net profit for the year Prior year tax adjustments Prior year adjustments Risk regulatory reserve Statutory Reserve As at 30 September

22

22

30-Sep-17 N'000 (2,103,857) (1,754) 779,695 (15,564) -

31-Dec-16 N'000 (1,714,073) 311,272 11,205

30-Sep-16 N'000 (1,714,073) 107,167 11,205 (9,260) -

(1,341,480)

(618,880) (93,381) (2,103,857)

(1,604,961)

Balance at 1 January Adjustment against retained earnings

30-Sep-17 N'000 1,360,774 -

31-Dec-16 N'000 741,894 618,880

30-Sep-16 N'000 741,894 -

As at 30 September

1,360,774

1,360,774

741,894

Statutory Reserve

30-Sep-17 N'000 93,381 -

31-Dec-16 N'000

30-Sep-16 N'000 -


Balance at 1 January Adjustment against retained earnings

93,381

As at 30 September 93,381 93,381 The Risk Regulatory Reserve is created as required by the Central Bank of Nigeria (CBN) Prudential Guideline section 12.4(a)(i). This is a non distributable reserve which represents the difference between impairment of Risk Asset under IFRS Rules and provisioning under CBN Prudential Guidelines. There was no significant difference between the CBN recommended provision and that of IFRS requirement during the year, hence there wa no transfer.

28

JAIZ BANK NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH SEPTEMBER, 2017

23

Income from Islamic Finanace Murabaha profit Corporate Murabaha profit Retail Murabaha Trade Finance Total profit from Murabaha transactions Ijara wa Iqtina Profit Ijara Finance Lease Profit Ijara profit home finance Ijara Others Total profit from Ijara transactions Istina Profit Salam Profit Musharaka Profit InterBank Murabaha Income Total Income from financing

24

Income from investment activities Trading Assets Income Sukuk profit Total Investment income

25

(i). RETURN ON EQUITY OF INVESTMENT ACCOUNT HOLDERS Profit paid to Unrestricted Mudarabah Account Holders / Fees of Mudarib Profit from Financing Investments paid to Mudarabah Account Holders

(ii) Mudarib fees/ profit of Joint Investments Bank's fees as Mudarib. Profit from the Bank's Joint Financing investments Bank's fee as Mudarib/Profit of owned Joint Investmets

2017

2016

9 Month Eneded 30 Sept

3 Month Eneded 30 Sept

N'000 1,814,132 554,471 1,524 2,370,127 1,792,516 74,022 1,024 653 1,868,215 77,836 1,353 168,730 55,043 4,541,304

N'000 670,241 187,324 970 858,535 579,392 23,331 327 183 603,233 24,481 1,245 60,183 40,276 1,587,953

9 Month Eneded 30 Sept N'000 303,974 120,115

3 Month Eneded 30 Sept N'000 92,913 37,827

9 Month 3 Month Eneded 30 Eneded 30 Sept Sept N'000 1,336,356 365,499 1,544 1,703,399 1,925,590 49,051 3,106 752 1,978,499 110,174 -122,695 11,753 3,926,520

N'000 558,406 135,673 854 694,933 626,492 28,614 748 315 656,169 42,314 65,991 122,695 11,753 1,461,873

424,089

130,740

9 Month 3 Month Eneded 30 Eneded 30 Sept Sept N'000 N'000 144,663 46,312 144,663 46,312



9 Month 3 Month Eneded 30 Eneded 30 Sept Sept N'000 N'000

919,288 919,288 9 Month Eneded 30 Sept N'000

332,834 332,834 3 Month Eneded 30 Sept N'000

1,767,084 2,279,021 4,046,105

563,188 822,671 1,385,859

876,566 305,411 876,566 305,411 9 Month 3 Month Eneded 30 Eneded 30 Sept Sept N'000 N'000 1,947,172 661,958 1,247,445 540,816 3,194,617 1,202,774

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 N919.29 Million was paid by the Bank to the Mudaraba Account Holders for the nine Months period ending 30th September 2017.

29

JAIZ BANK

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30TH SEPTEMBER, 2017

26

Fee and commisssion Banking Service Fees Foreign Exchange Commissions Trade Finance Fees Other Operating Income

9 Month Eneded 30 Sept N'000 616,642 99,833 100,702 5 817,182

3 Month Eneded 30 Sept N'000 174,428 12,947 39,417 3 226,795

9 Month 3 Month Eneded 30 Eneded 30 Sept Sept N'000 N'000 190,589 57,219 19,650 489 23,106 1,535 -11,810 233,345 47,433

The cahrges for COT were discontinued effective from July, 2013 in compliance to the directives of CBN and verdict of the Banks Shariah Advisory Committee of Expert (ACE) that it is not in compliance to the principle of Non Interest Banking.

27

28

29

Other Operating Income Wakala income

3 Month Eneded 30 Sept N'000 40,000

110,019

40,000

9 Month 3 Month Eneded 30 Eneded 30 Sept Sept N'000 N'000 38,640 38,640

-

Non Trading Exchange (Loss)/Gain The Banks' Accounting Policy provides that Monetary Assets & Liabilties denominated in Foreign Currencies been converted in to Naira a the rate of exchange ruling at the Balance sheet date and any differenece thereof be taken to the Statement of Other Comprehensive income.

Staff costs Salaries Staff pension Staff allowances Medical and other allowance Training and Seminar expenses

30

9 Month Eneded 30 Sept N'000 110,019

Depreciation and Amortisation Depreciation of Property, Plant & Equipment Amortisation of Leasehold Improvement Amortisation of Intangible Assets

9 Month Eneded 30 Sept N'000 1,054,143 146,029 309,793 123,642 79,630

3 Month Eneded 30 Sept N'000 379,960 12,859 129,801 42,586 41,079

1,713,237

606,285

9 Month 3 Month Eneded 30 Eneded 30 Sept Sept N'000 N'000 853,127 284,869 126,006 42,256 387,711 121,765 77,054 25,277 45,038 21,938 1,488,936 496,105

3 Month Eneded 30 Sept 2017 N'000 120,418 11,836 14,576 123,158

9 Month 3 Month Eneded 30 Eneded 30 Sept Sept 2017 N'000 N'000 266,697 96,421 80,167 26,377 34,898 12,568 381,762 135,366

9 Month Eneded 30 Sept N'000 340,511 17,332 42,738 400,581

30

JAIZ BANK NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST SEPTEMBER, 2017

31

Other Expenses Advertising and marketing Administrative - note 31 (i) Subscription and Professional fees ACE's Expense Rental charges (Occupancy Cost) Licences Bank Charges Audit fee & Other Expenses Directors expenses Others

31

(i) Administrative Telephone expenses Internet connection SWIFT/NIBBS Charges Courier charges Local and foreign travels Printing & Stationeries Repairs and maintenance Security Guards Other security expenses Money and other Insurance NDIC Premium Fuel Expense Vehicle repairs Service contract (HR and Admin) Data recovery and other software exp Donation Newspapaer, Magazine & Periodials Entertainment Penalty charge Sundry expenses Cash shortage W/O Technical service Generator expenses Cleaning expxnses ATM related expenses Sukuk Premium expenses ISO 27001 Treasury expenses E-Business expenses Corporate and retail banking expenses Regulatory expenses

9 Month 3 Month Eneded 30 Eneded 30 Sept Sept N'000 N'000 53,455 16,032 1,320,989 478,227 32,871 9,235 41,072 16,315 185,317 64,395 6,581 1,674 37,340 12,286 27,000 9,000 188,522 78,406 15,944 2,492 1,909,091 683,078

9 Month 3 Month Eneded 30 Eneded 30 Sept Sept N'000 N'000 187,315 91,169 765,878 357,652 17,246 6,145 24,227 13,856 154,912 58,498 70,942 25,705 29,861 9,820 18,370 6,870 104,755 42,784 914 914 1,374,420 613,413

9 Month 3 Month Eneded 30 Eneded 30 Sept Sept N'000 N'000 1,437 373 122,632 39,770 12,887 4,216 13,068 3,178 44,935 9,108 43,542 18,560 22,908 13,401 27,438 14,748 16,113 1,921 22,867 8,890 159,201 54,900 13,027 4,448 9,843 3,884 207,017 81,268 122,149 61,532 150 1,251 454 3,789 1,540 29,271 20,226 227 71 214,799 52,438 43,331 12,054 3,078 1,098 13,514 3,112 13,731 4,577 4,454 32,313 10,250 75,894 39,908 230 45,893 16,144 1,320,989 478,227

9 Month 3 Month Eneded 30 Eneded 30 Sept Sept N'000 N'000 11,026 397 104,491 65,489 13,035 4,204 5,779 3,179 26,777 9,380 28,507 14,952 45,002 17,414 20,969 4,370 21,024 8,430 15,886 5,621 110,648 38,651 9,240 3,483 4,546 1,663 120,320 61,908 105,515 67,988 202 952 442 2,791 717 100 12,466 6,085 213 117 2,400 800 26,798 13,650 10,698 1,254 8,265 1,110 13,770 4,577 31,393 9,545 13,065 12,226 765,878 357,652

31

JAIZ BANK NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30TH SEPTEMBER, 2017 32(a) PROVISION FOR IMPAIREMENT OF FINANCING AND INVESTMENT Prudential Adjustment for the period ended 30th September 2017 During the period under review, no transfer was made from Statement of Changes in Equity (SCE) to Risk Regulatory Reserve(Non Distributsble Reserve).

Provision on Risk Assets

Specific N'000 976,958 118,106 858,852

Provision per CBN Prudential Guideline Impairement Allowance per IAS 39 (Specific and Collective) As at 30,September. 2017

General N'000 834,657 332,735 501,922

OKL N'000 40,950 40,950 -

TOTAL N'000 1,852,565 491,791 1,360,774

32 (b) PROVISION FOR IMPAIREMENT OF FINANCING AND INVESTMENT The Provision for impairement is based on the impairement test conducted by the Bank's Consultants in accordance with the International Acconunting Standard (IAS 39). The first table is for the impairement while the second table is for the provision on Risk Assets in accordance to the Central bank of Nigeria's Prudential Guidelines. Under the total Colown in International Financial reporting Standard (IFRS) impairement table below, addition of the prior year over impairement charges and impairement for current year makes up the current year charges.

(ii) Impairement by Products (IFRS)

Balance at 1 January Re-classification Impairment for current year Balance at 31 September Notes (iii) Provision by Products (CBN)

Balance at 1 January Re-classification Provision no Longer Required Impairement for current year Balance at 31 September

Murabaha N'000

Musharaka N'000

Qard Hassan N'000

Istisina N'000

Ijara N'000

129,079 (145,002) 166,149 150,226 6

8,296 526 8,822 7

52 52 8

123,889 60,320 184,209 9

98,577 5,424 3,101 107,102 10

Murabaha N'000 819,591 (79,001) 166,149 906,739

Musharaka N'000 24,000 24,000

Qard Hassan N'000 2,554 2,554

Istisina N'000 287,372 (60,000) 60,320 287,692

Ijara N'000 587,099 3,101 590,200

Salam Other Assets N'000 N'000 430 430 10

Total N'000

62,271 (21,321) 40,950 15

422,112 (160,321) 230,000 491,791

Salam Other Assets N'000 N'000 62,271

Total N'000 1,782,887 (139,001) (21,321) 230,000 1,852,565

430 430

(21,321) 40,950

32

33 SIGNIFICANT SHAREHOLDING (5% UNIT & ABOVE) Dantata Investment & Securities Limited Dantat Aminu Alhassan Islamic Development Bank Dangote Industries Ltd Altani Investment Limited Indimi Muhammadu Mutallab Umaru Abdul At 30 September

30-Sep-17 Holdings 1,410,209,270 618,136,207 1,002,160,494 1,000,000,000 800,000,000 1,366,906,522 977,722,774 7,175,135,267

% 12 5 8 8 7 12 8 61

31-Dec-16 Holdings 1,839,684,663 772,672,258 1,253,333,294 1,250,000,000 1,100,000,000 1,366,906,522 1,989,532,234 9,572,128,971

% 12 5 9 8 7 9 14 65

30-Sep-16 Holdings 1,923,220,476 1,002,160,494 1,000,000,000 800,000,000 1,366,906,522 1,430,117,383 7,522,404,875

% 16 9 9 7 12 12 64

34 Earnings per share Basic earnings per share Basic earnings per share of N0.05kobo ( 2017:N0.01kobo) is based on the profit attributable to ordinary shareholders of 779695 ( 2017:N107167) and on the ordinary shares of14732125 ( 2016:14732125).

Profit attributable to ordinary shareholders Profit for the period Profit attributable to ordinary shareholders Weighted average number of ordinary shares Issued ordinary shares at 1 January Effect of share options exercised Weighted average number of ordinary shares at 31 September Basic earnings per share

30-Sep-17 N'000 779,695 779,695

31-Dec-16 N'000 343,017 343,017

30-Sep-16 N'000 107,167 107,167

30-Sep-17 N'000 14,732,125 14,732,125

31-Dec-16 N'000 14,732,125 14,732,125

30-Sep-16 N'000 14,732,125 14,732,125

0.05

0.02

0.01

There have been no transactions during the year which caused dilution of the earnings per share.

33

JAIZ BANK NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30TH SEPTEMBER, 2017 35 Related parties (i) Related parties: Parties are considered to be related if one party has the ability to control the other party or exercise influence over the other party in making financial and operational decisions, or one other party controls both. The definition includes investment as well as key management personnel. (ii) Transaction with key management personnel: The Bank's key management personnel, and persons connected with them, are also considered related parties. The definition of key management includes the close members family of key personnel and any entity over which key management exercise control. Close members family are those family members who may be expected to N'000 N'000 RELATED PARTY RELATIONSHIP WITH LIMIT AMOUNT THE BANK RECEIVABLE ALIKO DANGOTE DIRECTOR 96,863,913 BELLMARI ENERGY LIMITED 96,863,913 ALIKO DANGOTE DIRECTOR 124,107,293 FURSA FOODS LTD 586,391,087 AMINU DANTATA DIRECTOR 215,228,813 TAMIDAN NIGERIA LIMITED 216,167,260 AMINU DANTATA DIRECTOR 80,784,811 DANTATA PLASTIC LTD 83,200,000 AMINU DANTATA DIRECTOR 16,436,894 DARUL HUDA FOUNDATION 29,390,683 AMINU DANTATA DIRECTOR 630,000,000 TAMIDAN NIGERIA LIMITED 630,000,000 DR. UMARU ABDULMUTALLAB DIRECTOR GIDAUNIYAR JIHAR KATSINA 95,582,355 125,054,841 DR. UMARU ABDULMUTALLAB DIRECTOR 265,736,460 NOBLE HALL LIMITED 279,995,000 DR. UMARU ABDULMUTALLAB DIRECTOR 33,009,700 NOBLE HALL LIMITED 50,000,000 DR. UMARU ABDULMUTALLAB DIRECTOR 416,856,248 UMARU ABDUL MUTALLAB 810,000,000 DIRECTOR 1,198,448,100 1,506,497,368 MBS MERCHANTS LTD FALALU BELLO DIRECTOR 652,505,252 514,221,115 AHMAD RUFAI SANI HRH ENGR. SANI BELLO DIRECTOR 80,250,000 80,250,000 BELLO MUHAMMAD SANI HRH ENGR. SANI BELLO EXECUTIVE DIRECTOR 4,113,474 655,676 MAHE MAHMUD ABUBAKAR MAHE ABUBAKAR EXECUTIVE DIRECTOR 64,350,000 46,796,359 MAHE MAHMUD ABUBAKAR MAHE ABUBAKAR DIRECTOR 54,000,000 36,809,654 MUKHTAR DANLADI HANGA SANI MUKHTAR DANLADI HANGA SANI DIRECTOR 200,000,000 88,423,967 BAZE UNIVERSITY LIMITED NAFIU BABA-AHMAD Employee 1,735,558,049 1,480,437,131 Staff Facility Employee At 30 SEPTEMBER

6,866,815,174

5,758,170,244

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30TH SEPTEMBER, 2016 RELATED PARTY UMARU ABDUL MUTALLAB NOBLE HALL LIMITED NOBLE HALL LIMITED NOBLE HALL LIMITED PENMAN PENSIONS LIMITED GIDAUNIYAR JIHAR KATSINA TAMIDAN NIGERIA LIMITED DANTATA PLASTIC LTD DARUL HUDA FOUNDATION BELLMARI ENERGY LIMITED MUKHTAR DANLADI HANGA SANI MBS MERCHANTS LTD AHMAD RUFAI SANI AHMAD RUFAI SANI AHMAD RUFAI SANI BAZE UNIVERSITY LIMITED MAHE MAHMUD ABUBAKAR FURSA FOODS LTD Staff Facility At 30 SEPTEMBER

DR. UMARU ABDULMUTALLAB DR. UMARU ABDULMUTALLAB DR. UMARU ABDULMUTALLAB DR. UMARU ABDULMUTALLAB DR. UMARU ABDULMUTALLAB DR. UMARU ABDULMUTALLAB AMINU DANTATA AMINU DANTATA AMINU DANTATA ALIKO DANGOTE MUKHTAR DANLADI HANGA SANI FALALU BELLO HRH ENGR. SANI BELLO HRH ENGR. SANI BELLO HRH ENGR. SANI BELLO NAFIU BABA-AHMAD MAHE ABUBAKAR

RELATIONSHIP WITH THE BANK DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR EXECUTIVE DIRECTOR

ALIKO DANGOTE Employee

DIRECTOR Employee

LIMIT

N'000

810,000,000 30,000,000 50,000,000 279,995,000 9,800,315 118,416,295 1,000,004,750 83,520,000 29,390,683 51,811,722 54,000,000 1,116,302,000 77,500,002 65,005,250 510,000,000 160,000,000 68,463,474 81,900,000 1,615,198,365 6,211,307,857

N'000 AMOUNT RECEIVABLE 533,207,857 16,397,665 33,009,700 265,736,460 2,788,163 155,686,078 1,045,457,314 69,988,749 22,424,754 10,404,040 43,344,702 1,401,170,720 88,763,328 56,018,283 496,675,253 136,191,323 55,148,899 90,134,301 1,362,430,652 5,884,978,242

All Investments granted to ''Related Parties'' were at the same terms & Conditions with those granted to Non-related Parties. The amounts shown as Receivables comprises of the principal investments and the profit Mark-ups

JAIZ BANK

NOTES TO THE FINANCIAL STATEMENTS FOR THE PERIOD ENDED 30TH SEPTEMBER, 2017 36 INFORMATION REGARDING DIRECTORS

30-Sep-17 N'000

Emoluments Fees:

31-Dec-16 N'000

30-Sep-16 N'000

5,000

1250

2,500

Other directors (N500,000 each)

40,000

14000

14,000

Emolument as executives

93,782

62950

10,336

Highest paid director

48,577

32611

36,432

Chairman

No. of Directors excluding the chairman with gross emoluments within the following ranges were: N 5,000,000 10,000,001 15,000,001

N -

10,000,000 15,000,000 above

30-Sep-17 N'000 2

31-Dec-16 N'000 2

30-Sep-16 N'000 2

37 INFORMATION REGARDING EMPLOYEES The number of employees excluding Directors in receipt of emoluments excluding allowances in the following ranges were: N N 30-Sep-17 Number Below 400,000 12 400,001 500,000 90 500,000 600,000 51 600,000 700,000 66 700,000 800,000 3 800,000 900,000 900,000 1,000,000 1,000,000 5,000,000 190 5,000,000 10,000,000 2 Above 10,000,000 Number of persons employed as at the end of the year were: 30-Sep-17 Number Manegerial 10 Senior 53 Junior 351 414 38 EVENTS AFTER THE REPORTING PERIOD There are no events after the reporting date which could have had a material effect on the financial statements as at 30 September 2017.

31-Dec-16 Number 95 15 76 42 272 69 24 31-Dec-16 Number 24 69 500 593

30-Sep-16 Number 259 50 23 11 27 30-Sep-16 Number 11 50 309 370

39 CARD ISSUANCE AND USAGE IN NIGERIA AS AT 30 SEPTEMBER 2017 In line with Sec.11 of the CBN' Circular on The Guidance for issance and usage of cards in Nigeria, below is the Bank's information on it's Card 2017 CARD TYPE MASTER CARD VERVE DEBIT CARD

TRANSACTION VOLUMES

235,986 2,210,666 2,446,652

TRANSACTION VALUE

-

N'000 2,783,768,017 27,121,026,253 29,904,794,271

2016 CARD TYPE MASTER CARD VERVE DEBIT CARD

TRANSACTION VOLUMES

4,501 1,664,109 1,668,610

TRANSACTION VALUE

-

N'000 43,138,224 19,913,429,534 19,956,567,758

40 COMPLAINTS DATA In line with CBN circular Ref FPR/DIR/CIR/GEN/01/020, below are the customer complaints data for the year: (i) ATM complaints data- 30 September 2017 Number of complaints Number of complaints resolved Number of complaints unresolved Amounts in dispute (N'000) (i) ATM complaints data- 31 December 2016 Number of complaints Number of complaints resolved Number of complaints unresolved Amounts in dispute (N'000)

41 FINANCING ANALYSIS

(I) By Performance Performing Non Performing: Substandard Doubtful Lost

(ii) By Security All Asset Debenture Corporate Guarantee Personal Guarantees Pledge of Asset/Lien of Assets Deposit of Title Deeds Legal Mortgage Equitable Mortgage Salary Domiciliation/ lien of Assets Post Dated Cheques Clean/Staff Qard Hassan Hyphotication of Goods Simple Deposit of Title Irrevocable Standing Payment Order/Letter of comfort Domiciliation of Contract proceeds

JAIZ BANK'S MACHINE

OTHER BANKS' MACHINE

JAIZ BANK'S MACHINE

OTHER BANKS' MACHINE

63 62 1 769,000

19 19 66,000

165 157 8 2,947,023

32 30 2 34,000

2017 N'000 33,711,760,316 312,241,188 985,014,516 673,783,452 35,682,799,472

2016 N'000 31,262,655,422 464,837,944 606,160,211 573,041,825 32,906,695,402

2017 N'000 137,870,833 567,353,008 89,877,637 157,334,888 71,373,776 22,199,704,614 2,552,764,399 4,672,294,911 86,109,165 122,190,029 130,045 3,847,021,160 110,417,821 1,068,357,187 35,682,799,472

2016 N'000 127,144,550 523,213,226 82,885,202 145,094,312 65,820,931 20,472,578,625 2,354,160,597 4,308,792,688 79,409,914 112,683,706 119,928 3,547,724,825 101,827,369 985,239,528 32,906,695,402

(iii) By Location Head Office Abuja Kano Kaduna Gombe Maiduguri Kano 2 Katsina NASS Wuse Gusau ATBU Sokoto Zoo Road Kabuga NNPC Bauchi Yola Kaduna 2 Bannex Ikeja Ibadan Ilorin Port Harcourt Gwarimpa Samaru Hotoro Kebbi Marina Lokoja Staff Qard

(iv) By Product Murabaha Corporate Ijarah Wa Iqtina Corporate Musharakah Salam Qard Hassan Murabaha Household Appliance Murabaha Auto Finance Ijarah Auto Finance Ijarah Home Finance Ijarah Service Murabaha Retail/Gen. Istisna

2017 N'000 2,136,999,644 12,882,980,244 2,287,650,650 3,344,095,326 244,015,538 78,155,488 3,673,326,679 2,063,589,339 1,142,611,987 3,126,335,072 794,902,414 7,128,893 305,023,613 442,395,909 57,599,093 562,817,609 95,071,400 59,043,298 49,404,196 112,926,423 890,513,921 13,376,381 258,614,817 49,184,321 166,633,761 511,039,436 65,206,661 4,862,359 43,536,079 91,568,894 122,190,029 35,682,799,472

2016 N'000 2,305,002,827 13,244,784,704 2,803,274,577 3,535,834,777 339,379,263 78,739,152 2,463,409,014 1,592,686,243 1,193,854,693 2,807,302,381 883,021,586 38,338,764 260,351,162 147,548,083 51,077,562 316,967,675 50,470,006 303,871,061 42,688,334 32,391,726 258,936,512 4,150,884 5,229,896 147,384,524 32,906,695,402

2017 N'000 8,862,927,582 6,879,615,421 1,200,000,000 21,476,767 122,190,029 173,490,298 1,366,837,134 31,232,950 6,194,813,682 883,052,209 8,952,930,240 994,233,161 35,682,799,472

2016 N'000 7,005,956,893 6,772,197,478 1,200,000,000 147,384,524 112,631,927 1,541,793,915 26,357,353 5,759,170,003 1,070,872,740 8,004,491,531 1,265,839,038 32,906,695,402

(v) By Sector Agriculture Real estate Manufacturing Education Wholesale trading Construction Information technology General Oil and Gas Retail Transport

(vi) By Category Corporate Retail

(vii) By Age 0 - 30 days 31 - 60 days 61 - 90 days 91 - 180 days 180 - 360 days Over 30 days

2017 N'000 2,720,666,742 8,570,512,565 1,326,110,251 1,060,624,553 0 2,527,189,265 295,054,031 8,170,867,720 4,995,545,251 5,915,431,144 98,479,968 35,682,799,472

2016 N'000 2,117,684,907 7,900,658,731 475,712,848 1,100,482,034 0 2,642,280,507 384,619,913 7,309,143,087 3,188,388,135 6,980,156,792 804,479,318 32,906,695,402

2017 N'000 26,241,342,922 9,441,456,551 35,682,799,472

2016 N'000 23,554,806,975 9,351,888,427 32,906,695,402

2017 N'000 7,353,863 703,708,207 377,928,514 2,818,658,057 4,307,981,920 27,467,168,910 35,682,799,472

2016 N'000 457,752 99,600,214 91,075,180 1,013,740,756 4,844,609,822 26,857,211,679 32,906,695,402

42 LEGAL CLAIMS, CONTINGENT LIABILITIES AND COMMITMENTS

(i) Legal Claims During the period under review the Bank in its ordinary course of business was involved in 13 cases. The Directors having sought the advice of professional legal counsel are of the opinion that based on the advice received, only one may crystalize against the bank. The case with suit no BOHCMA/C/65/16 of USMAN MOHAMMED ADAMU V. JAIZ BANK PLC at Borno State High Court, Maiduguri. with a potential liability of N600,000.00.

(ii) Contingent Liabilities

2017 N'000 3,046,843 2,692,703 7,505,721 13,245,268

Advanced Payment Guarantees Letters of Credit Bonds and Guarantees Wakala

2016 N'000 897,304 1,660,000 1,204,175 3,761,479

(iii) Capital Commitments There were no capital commitments at the end of the reporting period of 30 September,2017

(iv) Guarantees and other Financial Commitments The Directors are of the opinion that all known liabilities and commitments which are relevant in assessing the company's financial position, financialperformance and cash flows have been taken into account in the preparation of these financial statements.

43 OPERATING SEGMENTS INFORMATION For reporting purposes, the Bank is organised into business segments and has reportable operating segments as follows: Corporate Banking Retail Banking Resources are allocated based on the business segments and Management reviews the segments on periodic basis to assess their performance. The Chief Operating Decision Maker of the Bank is the Management Committee, which reviews and allocates the necessary resources for the achievement of the Bank's objectives.

As at 30 September 2017 Cash Balance Cash and Balance with Central Bank of Nigeria Due from Banks and Financial Institution Sukuk Murabaha Recievables Investment in Musharaka Investment in Qard Hassan Investment in Istisna Investment in Salam Asset Investment in Ijara Asset Investment in Asset Held for Sale Property, Plant and Equipment Leasehold Improvement Intangible Assets Other Assets Deferred Taxation

Corporate Banking N'000 3,542,780 17,618,197 8,417,245 6,068,953 13,589,711 1,191,178 122,138 700,600 19,924 6,572,794 764,432 2,073,124 37,222 355,341 7,794,441 1,772,577

Retail Banking N'000

4,151,694

7,306,711 -

Total N'000 3,542,780 17,618,197 8,417,245 6,068,953 17,741,405 1,191,178 122,138 700,600 19,924 13,879,505 764,432 2,073,124 37,222 355,341 7,794,441 1,772,577

Total Assets

70,640,657

11,458,405

82,099,062

As at 31 December 2016 Cash and Balance with Central Bank of Nigeria Due from Banks and Financial Institution Sukuk InterBank Murabaha Murabaha Recievables Investment in Musharaka Investment in Qard Hassan Investment in Istisna Investment in Ijara Asset Investment in Asset Held for Sale Property, Plant and Equipment Leasehold Improvement Intangible Assets Other Assets Deferred Taxation Total Assets

Corporate Banking

Retail Banking

N'000 19,191,993 1,369,976 1,108,290 1,011,754 10,700,651 1,187,000 147,369 832,500 6,703,527 364,079 1,709,885 54,160 371,652 5,714,520 1,726,574 52,193,930

N'000

3,816,187

6,708,688

10,524,875

Total N'000 19,191,993 1,369,976 1,108,290 1,011,754 14,516,838 1,187,000 147,369 832,500 13,412,215 364,079 1,709,885 54,160 371,652 5,714,520 1,726,574 62,718,805

The Investments in Islamic Finance are shown here as Gross , while on the face of Statement of Financial position they are shown as Net of Impairement and Deferred Profit , in line with AOAFII requirements. This account for the difference between the Balance sheet size in the Notes to the Account and what was shown on the face of the Statement of Financial Position.

44 CONTRAVENTION OF CBN GUIDELINES

2017 N'000 KYC deficiencies in some customers’ files. Approval of PEP account opening No AML/CFT Training Plan for 2015 Transaction monitoring Late Rendition of eFASS daily returns for 13th & 18th November 2015 and 11th & 13th January Late Rendition of eFASS daily returns for 11 & 12 May, 2016 The bank’s exposure to a Director exceeded the maximum 10% stipulated by CBN Compliance/AML-CFT in contravention of Section 9.1 (b) of Money Laundering Act 2011 Enhance Due Diligence (EDD) Breached of CBN approved foreign currency trading position limit Differences observed in its foreign currency trading position Non-rendition of Foreign Exchange Utilization Returns (DTR 305) Non-rendition of eFASS daily returns for June 29, 2016 by Fincon Late Rendition of eFASS daily returns for 3rd and 25th January, 2017 50 Failure to repatriate outstanding balance of export proceeds valued $12,422.80 against Alhaji Bukar Bakki & Sons Ltd 2,000 Disbursement of facilities to Government Agencies prior to obtaining the Finance Ministry consent. 2,000 Failure to submit quarterly updates on the implementation of auditors’ recommendation, and its failure to implement prior year’s 2,000 recommendation. Penalty for unmatured fx forwards utilisation 2,000 8,050 16,100

2016 N'000 2,000 2,000 2,000 2,000 100 50 2,000 2,000 2,000 2,000 2,000 4,000 25 22,175