Jaiz Bank Plc, Nigeria's pioneer non-interest bank, reported a staggering increase in regulatory penalties in 2025, with total fines reaching N530.9 million, according to the bank's audited financial statements for the year ended December 31, 2025. This represents a 1,220% surge from the N40.2 million paid in 2024, highlighting intensified regulatory oversight by the Central Bank of Nigeria (CBN).
Breakdown of Penalties
The bulk of the penalties, N500 million, was imposed by the CBN for contraventions related to the regulatory framework for non-interest banks. Additional fines included N15 million for late rendition of returns, N10 million for non-compliance with Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regulations, and N5.9 million for other infractions. The bank also incurred N500,000 in penalties for non-compliance with the Bank Verification Number (BVN) regulations.
Impact on Financial Performance
The sharp rise in penalties weighed on Jaiz Bank's profitability. Profit before tax declined by 12.3% to N8.2 billion in 2025, down from N9.35 billion in 2024. Despite the regulatory headwinds, the bank's gross earnings grew by 18.5% to N51.3 billion, driven by a 22% increase in income from financing and investment activities. However, operating expenses rose by 27% to N29.7 billion, partly due to the higher regulatory fines.
Management Response
In a statement, Jaiz Bank's Managing Director, Haruna Musa, acknowledged the penalties but emphasized the bank's commitment to compliance. He said, “We have taken steps to strengthen our compliance framework and ensure that all regulatory requirements are met promptly. The penalties are a reflection of the evolving regulatory landscape, and we are working closely with the CBN to address any gaps.” The bank has since invested in upgrading its compliance systems and staff training to prevent future infractions.
Industry Context
The increase in penalties is part of a broader trend in Nigeria's banking sector, where the CBN has ramped up enforcement of regulations to ensure stability and transparency. In 2025, the CBN imposed a total of N2.1 billion in fines on banks for various infractions, up from N800 million in 2024. Industry analysts note that non-interest banks, which operate under a different regulatory framework, face unique challenges in aligning with conventional banking rules.
Outlook
Jaiz Bank expects to reduce regulatory penalties in 2026 as its compliance initiatives take effect. The bank is also exploring digital solutions to streamline reporting and reduce human errors. Despite the setbacks, the bank remains optimistic about growth, targeting a 15% increase in customer deposits and a 20% expansion in its branch network across Nigeria.
