Zenith Bank assures shareholders of no dilution in combined offering

Zenith Bank Plc has reassured its shareholders that its existing shareholding will remain unchanged during the bank’s ongoing combined offering.

Zenith Bank Plc’s Group Managing Director (GMD), Dr Adaora Umeoji, gave the assurance at the “Fact Behind the Combined Offer” event held at the Nigerian Exchange Ltd. (NGX) on Monday in Lagos.

Umeoji said that the bank was offering 65 per cent of its shares to existing shareholders and 35 per cent to the public to avoid diluting current holdings.

She said that Zenith Bank, on Aug. 1, launched a combined offering of eight billion units of shares to raise a total capital of N289.4 billion, and set to close on Sept. 9.

“A breakdown shows the shares offered shows that 5.23 billion units of shares of 50k each at N36 per share to its existing shareholders through a rights issue of one new share for every six held.

“We are also offering 2.77 billion ordinary shares of 50k each at 36.50 per share to the public through a public offer, in line with the Central Bank of Nigeria(CBN) recapitalisation directive to Nigerian banks.

“Again, 35 per cent of the proceeds realised from the ongoing combined offering will be used to fund the bank’s expansion strategy and increase its footprint in Africa and other parts of the world,” she said.

Emeoji further said that 20 per cent of the fund would also be used to enhance the bank’s Information Technology (IT) infrastructure and digital capabilities.

The bank chief said that the balance of 45 per cent raised would be deployed as working capital to support the real sector of the economy.

“We are very confident that after the ongoing recapitalisation exercise, the bank will experience exponential growth, and shareholders will get greater value for their investment.

“Our dominant footprint in Nigeria, West Africa, and our international network presents exciting growth opportunities.

“We currently have subsidiaries and representative offices in Ghana, Sierra Leone, Gambia, UK, UAE and China; and we recently obtained a banking license to commence operations in Paris.

“We are going to leverage on the Paris subsidiary to consolidate our business in the African Francophone region starting from Cote d’Ivoire and Cameroon.

“All our subsidiaries are making good profit and contributing almost 20 per cent to the group’s performance,” she said.

According to her, the bank’s historical and current financial performance, as well as its prospects provide a compelling reason for investors to invest in it.

The GMD stated that the bank’s investment in its people, technology and service had transformed it into a global brand, and placed it among the top 10 banks in Africa and the best in Nigeria.

Umeoji added that in ranking, compared to its peers, and backed by facts and figures, Zenith Bank emerged the number one bank by Tier-one capital, shareholders’ funds, market capitalisation, profit before tax and in dividend payout.

She said: “As at the end of 2023 financial year, we paid a dividend of four Naira per share, making us the highest dividend paying bank in Nigeria.

“This trend has been sustained in the past five years. Our dividend payout was 25 per cent of our organic profit without Foreign Exchange(FX) revaluation gains.

“This implies that we have the capacity to even pay more dividend organically without FX revaluation gains.

“The total assets of the bank stood at N20.4 trillion, while our total deposit liability stood at N15.2 trillion, placing us among the top three banks in this category.”

Accordingly to her, the bank recorded the largest loan portfolio of N7.1 trillion and NPL standing at 4.4 per cent, which is well below industry average.

“This shows our solid risk management capacity. Zenith Bank’s Tier-one capital was N1.9 trillion, indicating the highest in the Nigerian banking industry.

“Shareholders’ funds stood at N2.3 trillion, while we recorded a market capitalisation of N1.3 trillion Naira, which is also the highest in the industry.

“The Bank achieved PBT of N796 billion, making us the most profitable bank in Nigeria,” she added.

In his remarks, the Chief Executive Officer of the NGX Group, Mr Temi Popoola, commended the bank’s strategic use of funds to enhance its digital infrastructure and support its retail and corporate banking segments.

He noted that this aligned with NGX’s vision to expand its market presence and deliver superior value to investors.

The Chief Executive Officer of the NGX, Mr Jude Chiemeka, also commended the bank for its corporate governance, which contributed to the integrity of the market and attracted international investors.

Chiemeka emphasised that Zenith Bank’s listing on the NGX’s premium board signifies high corporate governance standards, reinforcing the bank’s reputation and fostering investor confidence.