Nigeria’s richest banker Jim Ovia’s Zenith Bank seeks approval for $117-million rights issue

Timilehin Adejumobi -

Key Point

  • Zenith Bank seeks NGX approval to issue 5.23 billion shares, raising N188.37 billion ($117 million) through a rights issue.
  • Bank’s board proposes doubling issued share capital to N31.4 billion ($20 million) at the upcoming AGM.
  • Zenith Bank aims for record N1 trillion ($700 million) profit in 2024 after a strong performance in 2023.

Zenith Bank Plc, under the leadership of Nigeria’s richest banker Jim Ovia, is seeking approval from the Nigeria Exchange (NGX) to issue 5.23 billion shares through a rights issue, aiming to raise N188.37 billion ($117 million).

Zenith Bank plans to double capital

Additionally, the bank plans to double its issued share capital from N15.7 billion ($9.8 million) to N31.4 billion ($20 million). This move follows a directive from the Central Bank of Nigeria (CBN) on March 28, mandating higher minimum capital requirements for banks.

The new capital base for commercial banks with international licenses is set at N500 billion ($316.3 million), while national and regional financial institutions must meet N200 billion ($126 million) and N50 billion ($31.5 million) thresholds, respectively. With a current capital base of N270.75 billion, Zenith Bank needs an additional N229.25 billion ($144.4 million) to comply with the new regulations.

NGX confirms rights issue date

The NGX confirmed the qualification date for the rights issue as July 24 in a statement signed by issuer regulation department head, Godstime Iwenekhai. Zenith Bank applied for approval through Stanbic IBTC Stockbrokers Limited.

The rights issue will involve 5.23 billion ordinary shares at N36 ($0.02) per share, on the basis of one new ordinary share for every six existing shares held as of July 24, 2024.

Zenith Bank eyes record profit

Founded in 1990 by Jim Ovia, Zenith Bank has been a significant force in the evolution and digitalization of the Nigerian banking sector. Ovia remains a significant shareholder with a 16.2 percent stake (5,072,104,311 ordinary shares).

As a leading financial services provider licensed by the Central Bank of Nigeria, Zenith Bank has a substantial presence across Nigeria and Anglophone West Africa. The bank’s compound annual growth rate in revenue has exceeded 27 percent over the past five years, according to Chief Financial Officer Mukhtar Adam.

Despite a recent legal battle with Nigerian billionaire Femi Otedola over a controversial debt involving Zenon Petroleum & Gas and other affiliated firms, Zenith Bank aims for a record N1-trillion ($700 million) profit in 2024, following a stellar 2023 and a strong first quarter.