Adaora: Zenith Bank to Experience Exponential Growth with N289.4bn Fresh Capital

Kayode Tokede

The Group Managing Director/CEO, Dr. Umeoji Adaora, yesterday expressed confidence that the lender’s N289.4 billion recapitalisation exercise is poised to drive its financial performance exponentially and increase shareholders’ return.

Zenith Bank in following the Central Bank of Nigeria (CBN) directive is offering 5,232,748,964 new ordinary shares by way of a rights issue at N36.00 per share and based on a ratio of one ordinary share for every six ordinary shares held by existing shareholders.

It is also raising 2,767,251,036 ordinary shares of 50 kobo at N36.50 per share by way of public offering. This brings the total capital raising exercise to N289.44billion.

Speaking to the capital market community during Zenith Bank’s “Facts Behind the Offer” in Lagos, Adaora stated that the bank is a futuristic financial institution that values the loyalty of its existing shareholders.

She noted that on that note, it is equally responsive to the yearnings of prospective investors who want to be part of its success story, and opted to have a combined offering to accommodate both groups.

She expressed that the board and directors at Zenith Bank are very conscious of not diluting its existing shareholding structure, which is why it is offering 65per cent to existing shareholders’ and 35pepr cent to the public.

“We are very confident that after the ongoing recapitalization exercise, the bank will experience exponential growth, and shareholders will get greater value for their investment,” she said.

On the use of the proceeds, she explained that Zenith Bank has a track record of efficient capital utilization and expected to execute 35 per cent of the proceeds realized from the combined offering to fund its expansion strategy, increase footprint in Africa and other parts of the world.

“20per cent will be used to enhance our IT infrastructure and digital capabilities and the balance of 45per 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 said. 

She explained further that Zenith Bank’s dominant footprint in Nigeria, West Africa, and international network presents exciting growth opportunities.

“We currently have subsidiaries and representative offices in Ghana, Sierra Leone, Gambia, UK, UAE and China; and 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.

“Our expansion strategy is following our customers’ businesses and targeting countries where we have strong potentials for growth. Our FinTech subsidiary ZenPay has recently signed an agreement with African Continental Free Trade Area (AfCFTA) for the development of SMARTAfCFTA, a digital trade portal positioned to revolutionize Pan African trade. This trade agreement will help us dominate the entire African trade business,” she said.

The Zenith Bank boss stated that technology has always been one of the financial institution tripod as it has completely overhauled our IT infrastructure with the best-in-class and robust technology that would improve processes and services across all its business verticals.

She added that, “We have completed several modules of the IT infrastructure and will be going live with our core banking application very soon. Our Fintech subsidiary, ZenPay, is a comprehensive digital payment solution platform set to revolutionize the financial services landscape,”

Adaora acknowledged the Chairman of Zenith Bank, Dr. Jim Ovia’s dedication to position the bank to be number one in shareholders fund with adequate capital buffers, making it to raise the least amount among Tier-1 banks in the recapitalisation exercise operating in the country.

“His vision was to create a global first-in-class financial brand, and a professional institution anchored on people, technology and service, with the core aim of providing premium value to all stakeholders,” she said.

Earlier, the Chairman, NGX Limited, Mr. Ahonsi Unuigbe, applauded the “remarkable growth trajectory of the bank as a top performer in the industry.”

He described the relationship between NGX and Zenith bank as long standing and mutually beneficial with the commitment to drive economic growth and shared goals and value to investors. 

“We remain steadfast at the NGX in our commitment to protecting the interest of our investors through rigorous oversight, adherence to best practices and continuous engagement with market participants.

“We strive to maintain that this Market remains a fair transparent one that is conducive to investments. We believe that by safeguarding the investors’ confidence we can ensure the sustained growth and stability of our markets,” he said.

On his part, the Chief Executive Officer of the NGX Group Plc, Mr Temi Popoola, lauded the Zenith bank plan to use the funds to enhance its digital infrastructure and support its retail and corporate banking segments.

He said that the initiative aligns with the NGX vision to expand market presence and deliver superior value to shareholders.

In his remarks, the Chief Executive Officer, NGX, Mr Jude Chiemeka, commended the Zenith bank for its corporate governance in driving the exchange to greater heights.

“It is important to know that Zenith Bank is listed on our premium board, and that means that they have high corporate governance, speaks to the integrity of the market and brings in international investors.

“The NGX is a multi-asset Exchange and not just an equity based. It has the technology and market infrastructure to facilitate capital raise.

“Year-To-Date, we have been able to facilitate N5.7 trillion across different asset classes, which is nowhere near what the Nigerian banks are looking for in terms of capital raise,” he said.