Zenith bank bolsters growth with 8bn share offering to fuel global expansion
By Esther Agbo
In a move aimed at strengthening its financial base, expanding its operations and providing shareholders with enhanced returns on their investments following the ongoing recapitalization programme, Zenith Bank Plc has announced a combined offering of 8 billion shares, which includes both a public offer and a rights issue.
The Group Managing Director and CEO, Dame Dr. Adaora Umeoji OON, made the announcement during the fact behind the offer presentation which took place at NGX, to discuss Zenith Bank’s current market offerings, emphasizing the bank’s dedication to environmental, social, and governance (ESG) principles and its strategic vision for the future.
The share offering, which opened on August 1st and will close on September 9th, 2024, consists of approximately 5.23 billion units of shares available to existing shareholders through a rights issue, priced at 36 Naira per share. Additionally, 2.77 billion ordinary shares will be offered to the public at 36.50 Naira per share. The bank has carefully structured the offering to avoid diluting its existing shareholding structure, allocating 65 per cent of the shares to existing shareholders and 35per cent to the public.
“We are offering approximately 5.23 billion units of shares of 50 cover each at 36 Naira per share to our existing shareholders through a rights issue of one new share for every six held.
“We are also offering 2.77 billion ordinary shares of 50 cover each at 36 Naira 50 cover per share to the public through a public offering,”
“We are very conscious of not diluting our existing shareholding structure, which is why we are offering 65per cent to our existing shareholders and 35per cent to the public, making a total of 8 billion shares we are issuing in the offer,” Dr Umeoji stated.
Dr. Umeoji assured stakeholders that the proceeds from the offering would be strategically utilized. “35per cent of the proceeds is going to be used for the strategic expansion, increasing our footprints in Africa and other parts of the world, while 20per cent will be used to enhance our IT infrastructure and digital capabilities. The remaining 45per cent is going to be used for the working capital to support the real sector of the economy with the focus on SME and retail segments of the business,” she explained.
Dr. Umeoji highlighted Zenith Bank’s commitment to sustainable business practices, noting that the bank has integrated ESG principles across its operations. “Zenith is committed to the tenets of ESG. We are an environmental-friendly bank, and we encourage our customers to adopt ESG practices in all their business operations,” she stated.
The Chairman of NGX, Mr. Ahonsi Unuigbe in his opening remark contextualized the bank’s performance within the broader dynamics of Nigeria’s financial landscape, particularly in light of recent regulatory advancements aimed at enhancing the resilience and stability of financial institutions noting that between 2019 and 2023, Zenith Bank’s gross earnings surged from 0.6 trillion naira to 1.9 trillion, reflecting a compound annual growth rate (CAGR) of 34.9per cent.
He said, “In 2023 alone, Zenith Bank reported a profit before tax of 796 billion naira and a profit after tax of 677 billion naira, thus showcasing an increase of 179per cent and 202per cent respectively from 2022.”
Continuing, Dr. Umeoji emphasized Zenith Bank’s preeminence in Nigeria’s financial sector, backed by solid figures and facts stating that ” It may interest you to know that as of December 31st, 2023, Zenith Bank’s year one capital was N1.9 trillion, being the highest in the Nigerian banking industry. Our shareholders funds stood at N2.3 trillion, being the highest again in the Nigerian banking industry.
“We recorded a market capitalization of N1.3 trillion, our PBT stood at N796 billion, also the highest in the Nigerian banking industry.
“We paid a dividend of 4 Naira per share, and this trend has been sustained for the past five years. Another point to note is that this dividend payout is actually from our organic profit without FX revaluation gain.
“Our total deposit liabilities stood at N15.2 trillion, placing us among the top three banks in Nigeria.
We recorded the largest low portfolio of N7.1 trillion Naira, and yet our NPL stood at 4.4per cent, which is below industry average. This shows our solid risk management capacity. The total asset of the bank stood at N20.4 trillion Naira.”
The Chief Executive Officer (CEO) of Nigerian Exchange Limited (NGX), Jude Chiemeka, in his market readiness remarks reiterated the Exchange’s commitment to maintaining the highest standards of corporate governance, sustainability, and market integrity.
He underscored the pivotal role of NGX in facilitating capital raises and attracting international investors emphasizing the significance of companies listed on NGX’s premium board, such as Zenith Bank noting that these companies are not only renowned for their robust leadership and governance structures but also play a critical role in enhancing the integrity of the Nigerian market.
Chiemeka concluded by elaborating on NGX’s diverse offerings, he noted that “It’s important to also point out that the NGX is a multi-asset exchange. It’s not just an equity-based exchange. So we have fixed income, we have ETLs.
“In fact, we’re the second largest ETF market in Africa. We also have derivatives and other exchange traded products that we offer. But one thing that I want to leave you with is really the fact that the NGX facilitates capital raise.
“So at the end of the day, we’ve been able to facilitate 5.7 trillion Naira across different asset classes. And I don’t think what the banks are looking for is anywhere near that. And if you think about the strong secondary market capability that we have, so it’s not just about investing in Zenith.”
To ensure the success of the offering, Zenith Bank has partnered with leading transaction advisors, including Stanbic IBTC Capital, Quantum Zenith, Cardinal Stone, Chapel Hill Denham, Coronation Capital, Meristem Capital, and Vetiva. Investors can purchase shares through the Nigerian Exchange Group (NGX) platform, Zenith Bank’s digital platforms, or by visiting any of the bank’s branches.
Zenith Bank’s proactive approach to recapitalization and growth reflects its ambition to continue delivering robust returns to its shareholders while expanding its reach and impact in the global financial landscape.
