Jaiz Bank Plc reported a 1.8% increase in profit after tax to N23.28 billion in the nine months ended September 30, 2026, compared with N22.88 billion in the corresponding period of 2025 despite a 16.2% increase in gross earnings.
The modest N405.56 million increase in net profit came as rising personnel expenses, higher returns to investment account holders and increased impairment charges absorbed much of the bank’s revenue growth.
According to its unaudited financial statements, gross earnings increased to N88.16 billion from N75.90 billion, representing an additional N12.26 billion in revenue.
However, profit before tax rose by just 1.7% to N23.69 billion from N23.29 billion, highlighting the widening gap between income generation and profitability.
A breakdown of the results showed that income from financing contracts increased by 47.3% to N45.87 billion from N31.14 billion, reflecting stronger earnings from the bank’s financing activities.
In contrast, income from investment activities declined by 7% to N38.14 billion from N41.03 billion, partially offsetting the improvement in financing income.
Consequently, gross income from financing and investment transactions increased by 16.4% to N84.01 billion from N72.18 billion.
However, returns paid to equity investment account holders rose by 23.3% to N23.74 billion from N19.24 billion, an increase of N4.49 billion.
The higher distribution to investment account holders reduced the portion of financing and investment income retained by the bank, limiting the benefit of stronger gross earnings.
Impairment charges also increased by 21.1% to N1.28 billion from N1.05 billion, reflecting an additional N221.95 million in provisions.
Although the increase in impairment charges was relatively modest compared with the bank’s total financing portfolio, it added to the pressure on earnings.
The most significant cost increase came from personnel expenses, which surged by 36.4% to N17.20 billion from N12.61 billion.
This represented an additional N4.59 billion in staff costs, substantially exceeding the N405.56 million increase in profit after tax.
Depreciation and amortisation expenses also increased by 33.1% to N2.39 billion from N1.79 billion.
However, other operating expenses declined by 10.9% to N19.87 billion from N22.30 billion, providing some relief against the increase in staff costs and other expenses.
Overall, operating expenses rose to N39.46 billion from N32.31 billion, representing an increase of approximately 22.1%, faster than the 13.6% growth in total income.
Total income increased to N63.15 billion from N55.61 billion, but the faster expansion in operating expenses left relatively little of the additional revenue available as profit.
As a result, the bank’s cost-to-income ratio increased to approximately 62.5% from 58.1% in the corresponding period of 2025.
The deterioration indicates that Jaiz Bank spent a larger proportion of its operating income on running the business, despite generating higher revenue.
Further analysis showed that net fee and commission income increased by 30.9% to N3.66 billion from N2.80 billion, providing additional support to earnings.
Nevertheless, the improvement was insufficient to offset the combined pressure from personnel costs, investment account holder distributions and other expense increases.
The weakness became more evident in the third quarter, when profit after tax declined by 3.3% to N8.16 billion from N8.43 billion in the corresponding quarter of 2025.
Third-quarter gross earnings also slipped marginally to N30.21 billion from N30.36 billion, suggesting that revenue growth recorded over the nine-month period was not sustained during the July-to-September quarter.
Meanwhile, Jaiz Bank’s balance sheet continued to expand.
Total assets increased by 31.6% to N1.69 trillion as of September 30, 2026, compared with N1.29 trillion at the end of December 2025.
Customer current deposits increased by 30.3% to N943.48 billion from N724.05 billion, while net financing assets rose by 23.7% to N305.25 billion from N246.77 billion.
Inventory financing also increased by 49.6% to N92.45 billion from N61.78 billion, indicating an expansion in the bank’s financing activities.
However, investment in sukuk declined by 31.2% to N337.48 billion from N490.57 billion, while balances due from banks and other financial institutions increased sharply to N509.90 billion from N174.57 billion.
The shift indicates a significant change in the composition of the bank’s assets, although the financial statements excerpt does not establish the reasons behind the reallocation.
Despite the expansion in assets and the profit recorded during the period, shareholders’ equity declined by 5% to N93.60 billion from N98.50 billion at the end of 2025.
Retained earnings also fell to N23.90 billion from N28.80 billion.
The decline in equity warrants closer examination of dividend payments and other movements in reserves before conclusions can be drawn about the bank’s capital position.
For investors, Jaiz Bank’s nine-month results highlight a growing challenge: expanding revenue and assets without achieving a corresponding improvement in profitability.
While the bank generated stronger financing income and attracted additional customer deposits, the increase in operating costs and returns to investment account holders limited earnings growth.
The key question for the remaining part of 2026 is whether Jaiz Bank can translate its expanding financing portfolio and deposit base into stronger profit growth while maintaining control over operating expenses.