Nigeria: Zenith Bank targets global operation expansion with $181.9mln hybrid offer

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Zenith Bank Plc, has said part of its ongoing N289.38 billion hybrid offer will be used for the growth and expansion of its global operation.

The Bank is raising N289.38 billion through a combination of a rights issue and a public offer. The rights issue offers 5.233 billion ordinary shares of 50 kobo each at N36.00 per share, while the offer for subscription presents 2.767 billion ordinary shares of 50 Kobo each at N36.50 per share. The offer, which opened on August 1, 2024, is expected to close on September 9, 2024.

This is as the Bank reassured shareholders of improved dividend payout going forward.

Speaking at the ‘Facts Behind the Offer Presentation’ held on the floor of Nigerian Exchange on Monday, the Group managing director/CEO of Zenith Bank, Dr. Adaora Umeoji said that the Bank is looking to solidify its presence in key global financial hubs while supporting its clients’ international operations and investments.

On the use of the proceeding, she said Zenith Bank is undertaking the offer to increase its capital base in line with the new minimum capital requirement and also to enable it pursue its strategic objectives including financing its strategic business developments and expansion into other geographic markets in order to make quality banking more accessible.

She added that it will also enable the Bank to conclude the overhaul of its information technology infrastructure and provide additional working capital to support its expanding operations and enable the Bank to take maximum advantage of emerging opportunities.

According to her, Zenith Bank has a track record of efficient capital utilization: 35 per cent of the proceeds realized from this combined Offering would be used to fund our expansion strategy increasing our footprint in Africa and other parts of the world; 20 per cent will be used to enhance our IT infrastructure and digital capabilities; while the balance of 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.

She noted that “Zenith Bank is looking to solidify its presence in key global financial hubs while supporting its clients’ international operations and investments.

She added that a significant milestone in its expansion plan is the upcoming establishment of a branch in Paris, France, saying that this new branch would be a critical bridge for enhancing business prospects within the West African Economic and Monetary Union (UEOMA) and Economic and Monetary Community of Central Africa (CEMAC) regions.

She explained that with Paris being a major financial centre in Europe, this move is expected to facilitate greater economic integration and financial connectivity between Africa and Europe, thus opening up new avenues for trade, investment, and economic cooperation.

She added that the Bank will also leverage on the Paris branch to consolidate most of its businesses in the Francophone African countries, starting from Cameroon and Côte d’Ivoire.

Umeoji explained that “with over three decades of operation, Zenith Bank has developed a strong brand loyalty position as preferred banking partner for many Nigerians.

“The Bank as at December 31, 2023 achieved Tier-1 capital of N1.9 trillion, the highest in the Nigerian banking industry; shareholders’ funds stood at N2.3 trillion and a market capitalization of N1.3 trillion.

“The Bank achieved profit before tax of N796 billion, making us the most profitable bank in Nigeria and has paid a dividend of N4.00 per share, making the Bank the highest dividend paying bank in Nigeria,” she explained.

She pointed out that this trend has been sustained in the past five years, saying that “it would also interest investors to note that our dividend payout was 25 per cent of our organic profit without FX revaluation gains; this implies that we have the capacity to even pay more dividend organically without FX revaluation gains.”

Chairman of Nigerian Exchange, Mr. Ahonsi Unuigbe stated that “with a capital base of N1.8 trillion as of December 2023, Zenith Bank has consistently demonstrated its relevance in the financial services landscape in our country.

“The Bank has positioned its business for sustainable long-term growth over its 30-year history, founded in January 1990 and listed on our exchange in 2004. The bank has continuously expanded its operations, both within and beyond.”