Details: Zenith Bank’s After-Hybrid-Offer Plan To Multiply Value For Investors
Zenith Bank has intentionally kept maintaining and enhancing shareholder value a priority in its post-hybrid offer play
Zenith Bank, an industry leader across different parameters, is executing an ambitious growth plan to soar its market lead beyond measure.
A report by SocietyNow NG revealed the recently concluded hybrid rights issue and public offer as part of a far-reaching strategy that will massively impact the economy and multiply value for stakeholders of the financial institution, which has remained the highest dividend payer for five years running.
The capital raised during the hybrid offering—a targeted N290 billion—provides the bank, with issued and fully paid share capital standing at N15.698 billion, complemented by a share premium of N255.047 billion, the added financial weight to undertake key initiatives aimed at driving immediate and long-term growth.
These growth-driving initiatives are focused on pushing its market leadership status through innovation, improved operational efficiency, expanding market reach, and particularly enhancing digital capabilities.
The bank, with Dame Adaora Umeoji as Chief Executive Officer, is keen on enhancing digital capabilities due to the leadership’s understanding that the future of banking is digital. That to sustain its status as market leader, offering cutting-edge and technology-driven financial services is a must.
Although the financial institution, number one by Tier-1 capital for the past fifteen years (now at N1.9 trillion), is a pioneer in the Nigerian digital banking space, it is now backed by fresh capital. The post-hybrid offer will see it embrace deeper advancements in technologies like artificial intelligence, blockchain, big data analytics, and machine learning, along with more extensive collaboration with fintechs.
This move comes with the significant gains of not just improved efficiency, but also the security of its operations, while providing customized and easier experiences for customers. Moreover, it offers a more cost-effective way of running business, with the reduced need for a brick-and-mortar approach.
“The demand for instant, digital financial services is huge and growing, and everything points to Zenith Bank making bold and intentional steps with heavy investments in developing proprietary solutions, extensive partnerships with fintechs, digital banking platforms, and automation tools,” is the consensus among experts.
The infusion of fresh capital—which also ensures meeting the Central Bank of Nigeria’s new rule of a N500 billion minimum capital requirement—has further positioned Zenith Bank in a vantage place to passionately pursue its digital transformation goals and other growth objectives, industry watchers affirm.
With plans to capitalize on opportunities in markets beyond Nigeria as part of a larger ambition to become the pan-African financial institution to emulate among global banking giants, sources say financial inclusion is taking immediate attention, with a focus on capturing a significant portion of Nigeria’s unbanked and underbanked population.
The bank is said to be working on using enhanced mobile banking solutions, digital wallets, and agency banking to reach millions of unbanked Nigerians, deepening its frontline role in championing financial inclusion for those lacking access to traditional banking services.
Industry watchers hint that the award-winning management of the financial institution, which just posted a N727 billion profit before tax (117% revenue growth) in half-year 2024, is embracing emerging trends such as open banking, where third-party fintech companies collaborate with traditional banks to offer innovative financial products.
The bank, which is also number one in shareholders’ funds (N2.3 trillion) and market capitalization (N1.3 trillion), is expanding its interest—and reach—into small and medium enterprises (SMEs) with the introduction of tailored financial products, including easy-to-access loans and business management tools. This move is expected to further boost the nation’s fortunes, as the SME segment is a critical growth area and a massive contributor to the Nigerian economy.
With a strategic focus on sustainable growth, efficient cost management, and increasing market share, Zenith Bank has intentionally kept maintaining and enhancing shareholder value a priority in its post-hybrid offer play, according to available data.
The hybrid rights issue and public offer were structured in a way that prevents the dilution (a decrease in ownership percentage) of existing shareholders, while the infusion of new capital positions the bank for long-term profitability, with continuing returns for investors guaranteed.
The financial institution, well-known for its prudent risk management practices and strong corporate governance framework—globally recognized as the best corporate governance bank in Nigeria at the World Finance Corporate Governance Awards for three consecutive years from 2022 to 2024—showed strong care for investors by offering the hybrid rights and public offers at the bank’s lowest price range, locking in about a 32 percent gain in immediate returns for both existing and new shareholders. …Continue Reading
