Zenith Bank Plc has announced a plan to raise N290 billion through a combination of a rights issue and a public offer. This initiative is part of the bank’s strategy to comply with the Central Bank of Nigeria’s (CBN) revised minimum capital requirements for commercial banks, which mandates that banks with international authorization must increase their capital base to N500 billion.
The new directive is aimed at ensuring the resilience and stability of Nigerian banks in the face of global economic uncertainties, enabling them to effectively compete on an international scale.
The capital raise will be facilitated through two key avenues. The rights issue will involve offering 5,232,748,964 ordinary shares at 50 kobo each, priced at N36.00 per share. This offer is specifically targeted at existing shareholders, allowing them to purchase additional shares in proportion to their current holdings.
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The terms set for this issue are one new ordinary share for every six existing shares held as of July 24, 2024. On the other hand, the public offer for subscription, priced at N36.50 per share, includes 2,767,251,036 ordinary shares of 50 kobo each, opening the opportunity to the general public and new investors.
The signing ceremony for the capital raise was held at The Civic Centre, Victoria Island, Lagos, marking a significant milestone in Zenith Bank’s capital-raising program. Group Managing Director/CEO of Zenith Bank Plc, Dame (Dr.) Adaora Umeoji, OON, expressed optimism about the initiative.
She stated, “Today marks a pivotal moment for Zenith Bank as we embark on this capital-raising journey. We are not just meeting the CBN’s minimum recapitalization requirement; we are exceeding it by raising N290 billion, which places us well above the required N230 billion. This demonstrates our commitment to maintaining a robust capital base and our readiness to seize growth opportunities across Africa and beyond.”
Dr. Umeoji highlighted the bank’s consistent track record of profitability and shareholder rewards, noting that Zenith Bank has been the highest dividend-paying bank in Nigeria over the past five years.
“In terms of Tier-1 Capital, Zenith Bank has been adjudged by The Banker, Financial Times to be number one in Nigeria and the only Nigerian Bank in the top 600 banks globally. Over the years, we have consistently rewarded our esteemed shareholders. Specifically, in the last five years, we have maintained the record as the highest dividend-paying Bank in Nigeria. In 2023, we set a record as the only Nigerian Bank to pay a dividend of N4 per share,” she said.
She assured shareholders and potential investors that the proceeds from the capital raise would be used to expand the bank’s operations across Africa and internationally, invest in state-of-the-art technology infrastructure, and support working capital requirements.
“We are committed to continuing our legacy of delivering superior value to our shareholders, and this capital raise is a crucial part of that strategy,” she added.
The lead issuing house for the rights issue and Public Offer is Stanbic IBTC Capital Limited, with joint issuing houses including Quantum Zenith Capital & Investments Limited, CardinalStone Partners Limited, Meristem Capital Limited, Chapel Hill Denham Advisory Limited, Coronation Merchant Bank Limited and Vetiva Advisory Services Limited. The Offer will open on Thursday, August 1, 2024, and close on Monday, September 9, 2024.
The Chief Executive of Stanbic IBTC Capital Limited, Mr. Oladele Sotubo, praised Zenith Bank’s proactive approach, expressing gratitude for the opportunity for Stanbic IBTC Capital Limited to lead and guide the execution of the transactions.
“Zenith Bank’s dual approach of a rights issue and public offer is a significant move in the capital market. It not only allows existing shareholders to consolidate their holdings but also invites new investors to be part of Zenith Bank’s growth story. This initiative underscores the bank’s leadership and innovative capabilities in the financial sector,” he said.
The capital raise will be conducted through Zenith Bank’s various channels, including internet banking, mobile applications, corporate internet banking, and physical branches. Additionally, the NGX Invest platform (https://invest.ngxgroup.com), integrated with Zenith Bank’s electronic channels, will facilitate a seamless and efficient application process for investors. The offer is set to open on August 1, 2024, and will close on September 9, 2024.