Zenith Bank Plc has said that a portion of its ongoing N290bn hybrid offer will be allocated toward the growth and expansion of its global operations.
The capital raise is structured through a combination of a rights issue and a public offer.
The rights issue will offer 5.233 billion ordinary shares at 50 kobo each, priced at N36.00 per share, while the public offer will present 2.767 billion ordinary shares at the same nominal value, priced at N36.50 per share.
The offer, which commenced on August 1, 2024, is set to close on September 9, 2024.
The bank has assured its shareholders of enhanced dividend payouts in the future as part of its commitment to delivering value.
At the ‘Facts Behind the Offer Presentation’ held at the Nigerian Exchange, the Group Managing Director/CEO of Zenith Bank, Dr. Adaora Umeoji, emphasized the bank’s strategic focus on strengthening its presence in major global financial centers while supporting the international operations and investments of its clients.
Regarding the allocation of the proceeds, Umeoji explained that the bank aims to bolster its capital base in compliance with the new minimum capital requirements.
This capital injection will enable the bank to pursue its strategic objectives, which include financing strategic business developments and expanding into new geographic markets to make quality banking services more accessible.
Additionally, the capital raised will facilitate the completion of the bank’s information technology infrastructure overhaul. This will provide the necessary working capital to support the bank’s expanding operations and allow it to capitalize on emerging opportunities in the market.
According to Umeoji, Zenith Bank has consistently demonstrated efficient capital utilization.
The bank plans to allocate 35 per cent of the proceeds from this offering to support its expansion strategy, aiming to increase its presence in Africa and other global markets.
Additionally, 20 per cent will be used to enhance the bank’s IT infrastructure and digital capabilities, while the remaining 45 per cent will be deployed as working capital to support the real sector of the economy, with a focus on the retail and SME segments.
Umeoji highlighted that Zenith Bank is committed to solidifying its presence in key global financial hubs, aiding its clients’ international operations and investments.
“A significant milestone in the bank’s expansion strategy is the upcoming establishment of a branch in Paris, France.
This new branch will serve as a critical bridge to enhance business prospects within the West African Economic and Monetary Union (UEMOA) and the Economic and Monetary Community of Central Africa (CEMAC) regions.
This move is expected to open up new avenues for trade, investment, and economic cooperation. Furthermore, the Paris branch will enable Zenith Bank to consolidate its operations in Francophone African countries, starting with Cameroon and Côte d’Ivoire.
With over three decades of operation, Zenith Bank has developed a strong brand loyalty and is recognized as a preferred banking partner for many Nigerians,” she said.
She noted that as of December 31, 2023, the bank achieved Tier-1 capital amounting to N1.9tn, the highest in the Nigerian banking industry. Shareholders’ funds reached N2.3tn and the market capitalization stood at N1.3tn.
The bank reported a profit before tax of N796bn, making it the most profitable bank in Nigeria. It also paid a dividend of N4.00 per share, positioning itself as the highest dividend-paying bank in the country.
She highlighted that this trend has been sustained over the past five years, adding, “Investors should be interested to note that our dividend payout represented 25 per cent of our organic profit, excluding foreign exchange revaluation gains.
This indicates our capacity to pay even higher dividends organically without relying on FX revaluation gains.”
Chairman of the Nigerian Exchange, Mr. Ahonsi Unuigbe, stated, “With a capital base of N1.8tn as of December 2023, Zenith Bank has consistently demonstrated its significance in the financial services sector in Nigeria.
“The bank has strategically positioned its business for sustainable long-term growth over its 30-year history, having been founded in January 1990 and listed on our exchange in 2004. It has continuously expanded its operations both domestically and internationally.”