By Milcah Tanimu
Zenith Bank Plc’s recent hybrid offering is garnering significant attention, with strong indications that it may be oversubscribed as investors seek a stake in the bank known for its robust dividend payouts. This offering combines a Rights Issue and a Public Offer, aiming to raise N290 billion in new capital in response to the Central Bank of Nigeria’s (CBN) mandate requiring deposit money banks to increase their capital base to N500 billion.
Despite needing only N230 billion to meet the new CBN requirements—thanks to an already strong capital base of N270.7 billion—Zenith Bank has opted to raise N290 billion. The offering, which commenced on August 1, 2024, and closes on September 9, 2024, includes a rights issue of over 5.2 billion shares at N36.00 per share and a public offer of nearly 2.8 billion shares at N36.50 per share.
Existing shareholders are being offered the chance to purchase additional shares proportional to their current holdings, while the public offer is open to new investors, reflecting the bank’s inclusive approach to expanding its investor base.
Dr. Adaora Umeoji, Zenith Bank’s Group Managing Director/CEO, expressed confidence in the success of the capital raise, citing the bank’s consistent profitability and strong dividend record. At the Rights Issue/Public Offer Signing Ceremony on July 29, 2024, Umeoji emphasized that Zenith Bank remains committed to rewarding shareholders and maintaining its leadership in dividend payouts.
The capital raised will be used to expand Zenith Bank’s operations across Africa and internationally, invest in technology infrastructure, and support ongoing working capital needs. Umeoji also highlighted the bank’s plans to drive financial inclusion, expand corporate and retail banking through digital platforms, and establish a fintech subsidiary, ZenPay.
With a track record of excellent performance, including a profit before tax of N796 billion in 2023 and N320 billion in the first quarter of 2024, Zenith Bank is on course to surpass the N1 trillion profit mark in 2024. The bank’s impressive results have earned it numerous awards, including recognition as the Number One Bank in Nigeria by Tier-1 Capital for the 14th consecutive year.
Zenith Bank’s hybrid offering reflects the institution’s strategic positioning in the market and its commitment to maintaining its status as a leading financial institution in Nigeria and beyond.