Zenith Bank Plc, Nigeria’s largest and most profitable bank, has launched an ongoing hybrid rights and public offer, presenting an opportunity for investors to acquire shares at the bank’s lowest price range in years.
This offer could yield a potential immediate return of approximately 32% for both existing shareholders and new investors.
As part of the offer, Zenith Bank is issuing a rights offer of 5.233 billion ordinary shares of 50 kobo each at a price of N36 per share. These shares are pre-allotted to existing shareholders on the basis of one new ordinary share for every six shares held as of the close of business on July 24, 2024.
Concurrently, the bank is also offering 2.767 billion ordinary shares to the general public at N36.50 per share, with a minimum subscription of 250 shares, allowing investors to become part-owners of Nigeria’s leading bank with an investment as low as N9,125.
The offer, which opened on August 1, 2024, is scheduled to close on September 9, 2024.
A review of Zenith Bank’s recent stock market performance reveals that the bank’s shares have traded as high as N47.35 per share, suggesting that the current offer price represents a significant discount.
The ongoing hybrid rights and public offers are expected to provide substantial value to investors, particularly with an earnings yield of around 60%, which is currently the most attractive in the banking sector.
Zenith Bank’s impressive financial performance underscores the potential value of these offers. The bank reported a pre-tax profit of N796 billion and a profit after tax of N677 billion for the 2023 fiscal year, driven by aggressive business expansion and strong brand adoption both domestically and internationally.
Gross earnings for the bank surged from N946 billion in 2022 to a remarkable N2.13 trillion in 2023, placing Zenith Bank among the elite group of Nigerian banks with over N2 trillion in gross earnings.
The bank’s performance in the first quarter of 2024 suggests that it is on track to surpass its 2023 achievements. Gross earnings for the first quarter jumped by 189% to N781 billion, while profit before tax soared by 267.8% to N320 billion. Net profit for the period increased by 291% to N258 billion, with earnings per share rising from N2.10 to N8.22.
Analysts believe that Zenith Bank has entered a new phase of phenomenal growth, with predictions that the bank’s net profit could exceed N1 trillion by the end of the year. Such a fundamental performance is expected to drive a rally in the bank’s stock, making the current offer a particularly attractive investment opportunity.
Zenith Bank has consistently been recognized for its excellence in the banking industry. It has been named the Best Commercial Bank in Nigeria for the fourth consecutive year by the World Finance Banking Awards and has received accolades for its corporate governance practices. The bank was also ranked as the Number One Bank in Nigeria by Tier-1 Capital for the 14th consecutive year in The Banker Magazine’s 2023 Top 1000 World Banks Ranking.
Founded in 1990 by Jim Ovia, Zenith Bank has grown into one of Africa’s leading financial institutions, with a strong presence in Nigeria and subsidiaries in Ghana, Sierra Leone, The Gambia, and a representative office in China. The bank has been a pioneer in digital banking in Nigeria, leveraging Information and Communication Technology (ICT) to create innovative products and services that meet the evolving needs of its customers.
