By Chukwuma Umeorah
The Chief Executive Officer (CEO) of Zenith Bank Plc, Adaora Umeoji, has said that the N290 billion the bank aims to raise through its ongoing offer will be used for expanding its operations across Africa and other international markets, enhancing its IT infrastructure and providing working capital to support the real sector, particularly Small and Medium-sized Enterprises (SMEs).
Speaking during the bank’s “Fact Behind the Offer” presentation at the Nigerian Exchange Limited (NGX) on Monday, Umeoji explained that 35 per cent of the funds, approximately N101 billion, will be directed toward expanding Zenith Bank’s presence in key markets such as West Africa, Europe, and the Middle East.
Umeoji stated, “We recently obtained a banking license to commence operations in Paris. We are going to leverage on the Paris subsidiary to consolidate our business in the African Francophone region starting from Cote d’Ivoire and Cameroun. It is pertinent to note that all our subsidiaries are making good profit and contributing almost 20 per cent to the Group’s performance.”
According to her, this expansion is part of the bank’s strategy to deepen its global footprint and access new markets with significant growth potential.
Additionally, 20 per cent of the capital raised, equating to N58.3 billion, is set aside to upgrade the bank’s IT infrastructure to ensure that it continues to meet the evolving needs of its customers. Umeoji emphasised the importance of this investment, saying, “Technology has always been one of our tripod as a bank. We have completely overhauled our IT infrastructure with the best-in-class and robust technology that will improve our processes and services across all our business verticals. We have completed several modules of the IT infrastructure and will be going live with our core banking application very soon.”
She added that Zenith Bank’s fintech subsidiary, ZenPay, a comprehensive digital payment platform is set to revolutionise the financial services landscape. Furthermore, the remaining 45 per cent of the proceeds, around N131.1 billion, will be used as working capital to bolster the real sector, with a particular focus on supporting SMEs.
“We are dedicating a significant portion of the proceeds to support the real sector, especially the SMEs, which are the backbone of our economy,” Umeoji remarked. She highlighted Zenith Bank’s commitment to driving economic growth by providing essential financial support to these critical sectors.
Highlighting the facts behind the offer, Umeoji noted that the bank is offering approximately 5.23 billion units of shares of 50 kobo each at N36.00 per share for existing shareholders through a Rights Issue of one new share for every six held, while it offered 2.77 billion ordinary shares of 50 kobo each at N36.50 per share to the public through a Public Offer. “We are very conscious of not diluting our existing shareholding structure, which is why we are offering 65 per cent to our existing shareholders’ and 35 per cent to the public,” she said.
She underscored the bank’s strong ability to attract and manage capital effectively citing previous capital market offerings which have been met with considerable success, often being oversubscribed.
“In the previous financial year, Zenith Bank reported Tier-1 capital of N1.9 trillion, shareholders’ funds of N2.3 trillion, and a market capitalization of N1.3 trillion. These figures highlight the bank’s robust financial health, which is further evidenced by its Profit Before Tax (PBT) of N796 billion, making it the most profitable bank in Nigeria. We remain the leader in profitability and continue to provide significant returns to our shareholders as the highest dividend paying in the banking industry.”
The CEO of the Nigeria Exchange Group, Temi Popoola, emphasized the significance of this capital-raising effort, noting its alignment with the bank’s broader goals of expanding market presence and delivering enhanced value to shareholders. He stated, “This initiative is aligned with our vision to expand our market presence and deliver superior value to our shareholders.”
Popoola also mentioned that the raised funds would be strategically allocated to boost the bank’s digital infrastructure and strengthen its retail and corporate banking divisions which aligned with the Exchange’s technological innovations.
Echoing this sentiment, Jude Chiemeka, the CEO of Nigeria Exchange Limited, praised Zenith Bank for its strong corporate governance, which he identified as a driving force behind the exchange’s growth.