Nigerian banker Jim Ovia’s Zenith Bank launches $181-million right issues

Oluwatosin Racheal Alabi -

Key Points:

  • Zenith Bank Plc, led by Jim Ovia, aims to raise N290 billion ($181 million) through a rights issue and public offer.
  • The capital raise will fund expansion across Africa, enhance technology infrastructure, and support ongoing working capital.
  • The offering will attract both existing shareholders and new investors, reinforcing Zenith’s position as a dividend leader.

Zenith Bank Plc, led by Nigerian banker Jim Ovia, is launching a substantial capital-raising initiative, aiming to secure N290 billion ($181 million) through a rights issue and a public offer. This move aligns with the Central Bank of Nigeria’s revised capital requirements for banks.

The fundraising will kick off on Thurs., Aug. 1, 2024, and conclude on Mon., Sept. 9, 2024.

Capital enhancement strategy

This capital enhancement was announced during a rights issue/public offer signing ceremony in Lagos on July 29, 2024. It marks a development in Zenith Bank’s strategy to strengthen its capital base and facilitate growth across its banking and non-banking subsidiaries.

The rights issue component will offer 5,232,748,964 ordinary shares priced at N36.00 each, while the public offer will release 2,767,251,036 ordinary shares at N36.50 per share.

This structure allows existing shareholders the opportunity to increase their stakes, maintaining their proportionate ownership, while also opening avenues for new investors through the public offer. Dame Adaora Umeoji, group managing director and CEO of Zenith Bank, conveyed her excitement about exceeding the N230 billion (143 million) recapitalization threshold set by the CBN.

She emphasized the enthusiastic response from existing shareholders and the strategic inclusion of a public offer to broaden ownership among customers not yet shareholders.

Growth and visionary leadership

Proceeds from the capital raise are designated for expanding Zenith Bank’s operations both within Africa and on the international stage, further investment in technology infrastructure, and bolstering working capital.

Umeoji explains Zenith Bank’s consistent profitability and its commitment to creating value for shareholders, evidenced by its track record as the highest dividend-paying bank in Nigeria over the last five years. In 2023, Zenith Bank set a dividend payout record of N4 per share, the highest in the Nigerian banking sector.

In her remarks, Umeoji also expressed profound gratitude to Jim Ovia for his foundational leadership, which has positioned Zenith Bank as a reputable, dominant, and innovative global financial institution.

Oladele Sotubo, CEO of Stanbic IBTC Capital Limited, praised Zenith Bank’s leadership for their commitment to the transaction, highlighting how the combined offer positions Zenith Bank as a leader and pacesetter in the capital market.

Zenith Bank has facilitated participation in this capital raise through various channels, including Zenith Bank Internet Banking, its mobile application, corporate internet banking, all nationwide branches, and the NGX Invest platform, ensuring that the rights issue and public offer are accessible to all potential investors.

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.