Auditors Raise Alarm Over Jaiz Bank’s Breach Of SEC, CAMA Rules

jaiz bank

… As Bank’s Capital Adequacy Ratio Falls

Deloitte, the external auditor of Nigeria’s oldest non-interest bank, Jaiz Bank Plc has raised concern over the lenders’ non-compliance to regulatory provisions in its activities.

The development is coming as the lender posted gross earnings of N47bn up from N33.3bn. The bank’s profit rose to N 11.2bn in 2023, a surge from the N6.9bn recorded in 2022.

The lender’s financial records analyzed by NewsNGR show that Basic and Diluted Earnings per share rose to N32.53 and N13.8 kobo.

The company’s assets also surged 108 per cent to N580bn from N279bn recorded in 2022 ending.

But Deloitte said the bank has not instituted internal control according to Securities and Exchange Commission’s rules.

Deloitte said, “The bank is still in the process of complying with the Securities and Exchange Commission’s directive regarding internal control over financial reporting.

Section 60-63 of the Investment Act 2007 requires management and board of directors of public entities to report on the effectiveness of their entity’s internal control over financial reporting in their annual reports.

“As at the time of finalization of these financial statements, the bank’s management is still in the process of completing their assessment of the operating effectiveness of its internal controls over financial reporting. Consequently, the auditors review thereon is yet to commence.”

Another concern raised by the lender’s external auditor is its failure to maintain adequate share capital as provided by the Companies and Allied Matters Act 2020.

“The entity’s issued share capital is lower than the authorized share capital as of 31 December 2023. This is contrary to the provision of Section 124 of the Companies and Allied Matters Act 2020 which stipulates that issued and authorized share capital of an entity should be exactly the same amount,” Deloitte said.

Data on the Nigerian Exchange Ltd shows that Jaiz Bank has an outstanding of N34,541,172,377 as of May 20, 2024.

By the end of 2023, the bank’s Capital Adequacy Ratio fell by 5 per cent to 17.96 per cent from 18.8 per cent in 2022.

But it is still above the Central Bank of Nigeria’s prudential guideline of 10 per cent CAR for national and regional banks.

“Our opinion on the Financial Statements does not cover the other information and we do not express any form of assurance conclusion thereon.

“In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the Financial Statements, or our knowledge obtained in the audit, or otherwise appears to be materially misstated,” Deloitte said.

However, Deloitte said that so far, its examination shows that Jaiz Bank kept proper books of account.