The largest lender in Nigeria based on market capitalisation, Zenith Bank Plc, aims to raise $290 billion ($182 million) to fund expansion and grow its loan book. On Monday, the bank announced the launch of its combined offer on the Nigeria Exchange Limited (NGX) floor.
Zenith Bank has announced a public offering of shares, allowing existing shareholders to increase their stake. A total of 5.2 billion shares are being offered for ₦36.00 per share, allowing existing shareholders to expand their holdings in the bank.
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In addition, 2.7 billion shares are being offered to the general public at a slightly higher price of ₦36.50 per share, allowing new investors to buy into the bank’s growth prospects.
The offer period opened on August 1, 2024, and will close on September 9, 2024, providing a window of opportunity for investors to participate. This share offering aims to raise capital for the bank’s future growth initiatives and strengthen its position in the financial sector
Zenith Bank’s Commitment to Shareholder Value
Zenith Bank’s transformation into a publicly traded company in 2004 marked a significant milestone. Since then, the bank has focused on maximising shareholder value, delivering robust financial performance, sustainable growth, and impressive returns.
With a market capitalisation of ₦1.9 trillion, Zenith Bank’s shares have become attractive to investors seeking to benefit from its proven track record and future growth potential.
Adaora Umeoji, Zenith Bank’s Group MD/CEO, said during her presentation that the bank pays a dividend of ₦4 per share, the highest paid by any bank in Nigeria. This trend has been sustained for the last five years. The shares are paid from organic profits without FX revaluation gain; she added that Zenith Bank’s offer is investors’ delight.
Also, Zenith Bank discussed how it grew from a mid-size lender to the biggest tier-1 bank in terms of market value over several decades. 58% of the group’s revenue comes from its corporate banking division, and 42% comes from its retail brand.
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What Strategies is Zenith Bank Implementing for SMEs?
Adaora further said that all the subsidiaries are making almost 20% profits and contributing to group profits.
The 35% of the total capital raised₦99 billion—will be used to fund the strategic expansion of the banking business. The plan is to expand its footprints in West Africa and set up shop in Paris, the French capital, to consolidate Francophone expansion.
Zenith Bank has 33 million customers and will concentrate on the SME and retail markets. Working capital to support both divisions will be utilised, accounting for 45% of the total capital generated, or ₦128 billion. Twenty per cent of the earnings, or 57 billion, will remain and be used to fund IT infrastructure.