Zenith Bank eyes global expansion with N289.38bn hybrid offer

Business a.m.

Zenith Bank Plc has stated that a portion of its ongoing N290 billion hybrid offer will be allocated towards the growth and expansion of its global operations. The hybrid offer, which includes equity and debt components, is aimed at strengthening the bank’s capital base and enabling it to seize new opportunities in the global financial market. 

As part of its capital raising efforts, Zenith Bank Plc is offering 5.233 billion ordinary shares at N36.00 per share via a rights issue and an additional 2.767 billion ordinary shares at N36.50 per share through a public offer. The combined hybrid offer, which opened on August 1, 2024 and is set to close on September 9, 2024, is valued at a total of N290 billion.

Speaking at the ‘Facts Behind the Offer Presentation’ on the floor of the Nigerian Exchange, Adaora Umeoji,group managing director/CEO of Zenith Bank, highlighted the bank’s plans to solidify its presence in key global financial hubs and support the international operations and investments of its clients.

Umeoji explained that the capital raised through the hybrid offer will be used to support the bank’s strategic business development and expansion into new geographic markets, bringing the bank’s high-quality banking services to a wider range of customers. This capital raising initiative is part of the Bank’s efforts to meet the new minimum capital requirements and pursue its strategic objectives.

The group MD also stated that the proceeds from the hybrid offer will facilitate the completion of the Bank’s ongoing overhaul of its information technology infrastructure and provide additional working capital to support its expanding operations. 

Umeoji noted that Zenith Bank has a proven history of effective capital allocation, and the bank intends to distribute the proceeds from the combined offer as follows: 

-35 percent for expansion into new markets in Africa and other regions to support its global footprint.

– 20 percent for the enhancement of the Bank’s IT infrastructure and digital capabilities.

-45 percent for working capital to support retail and SME segments in the real sector of the economy.

“Zenith Bank is looking to solidify its presence in key global financial hubs while supporting its clients’ international operations and investments,” she added.

Umeoji underscored the significance of Zenith Bank’s forthcoming Paris branch, which will serve as a strategic gateway to expand the Bank’s business prospects within the West African Economic and Monetary Union (UEOMA) and Economic and Monetary Community of Central Africa (CEMAC) regions.

The GMD further highlighted that the Paris branch will enable the Bank to consolidate its operations across Francophone African countries, commencing with Cameroon and Côte d’Ivoire.

She stated further, “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.”

Umeoji explained that Zenith Bank’s impressive dividend track record has been consistently maintained over the past five years. She added that the Bank’s ability to pay out 25 percent of its organic profits as dividends, even without the inclusion of FX revaluation gains, demonstrates the Bank’s strong capacity to increase dividend payout organically.

Also speaking at the event, Ahonsi Unuigbe, chairman of the Nigerian Exchange, acknowledged Zenith Bank’s solid position in the Nigerian financial services sector, noting that the Bank’s impressive capital base of N1.8 trillion as of December 2023 serves as a testament to its continued relevance and significance to the country’s economy.