We are seeking funds to grow and support small and medium enterprises says Zenith Bank CEO
Zenith Bank Aims to Support SMEs with N290 Billion Fundraising, Says CEO
Adaora Umeoji, CEO of Zenith Bank Plc, has announced that the bank’s ongoing effort to raise N290 billion will be used to expand its operations across Africa and other global markets, enhance IT infrastructure, and provide working capital to support the real sector, particularly Small and Medium-sized Enterprises (SMEs).
During the “Fact Behind the Offer” presentation at the Nigerian Exchange Limited (NGX) on Monday, Umeoji detailed that 35% of the funds, approximately N101 billion, will be allocated towards expanding Zenith Bank’s presence in key regions such as West Africa, Europe, and the Middle East.
“We recently secured a banking license for operations in Paris, which we will leverage to strengthen our business in the Francophone regions of Africa, beginning with Côte d’Ivoire and Cameroon. Notably, all our subsidiaries are profitable and contribute nearly 20% to the Group’s overall performance,” Umeoji stated.
This expansion aligns with Zenith Bank’s strategy to broaden its global footprint and tap into new markets with significant growth potential.
In addition, 20% of the raised capital, equivalent to N58.3 billion, will be used to upgrade the bank’s IT infrastructure. Umeoji emphasized, “Technology is one of our core pillars. We have completely revamped our IT systems with top-tier technology to enhance our processes and services across all business verticals. Several modules of this infrastructure have been completed, and we will soon launch our core banking application.”
She also highlighted the potential of ZenPay, the bank’s fintech subsidiary, which is poised to transform the financial services industry. Moreover, 45% of the proceeds, around N131.1 billion, will be allocated as working capital to support the real sector, with a focus on SMEs.
“A substantial portion of these funds will be dedicated to bolstering the real sector, especially SMEs, which are crucial to our economy,” Umeoji remarked, reaffirming Zenith Bank’s commitment to fostering economic growth by providing essential financial support to these key sectors.
Regarding the specifics of the fundraising offer, Umeoji explained that the bank is offering around 5.23 billion units of shares at 50 kobo each for N36.00 per share to existing shareholders through a Rights Issue of one new share for every six held. Additionally, 2.77 billion ordinary shares at 50 kobo each will be offered at N36.50 per share to the public through a Public Offer. “We are careful not to dilute our existing shareholding structure, which is why 65% is offered to existing shareholders and 35% to the public,” she added.
Umeoji also highlighted the bank’s strong history of attracting and managing capital, noting that previous offerings have been well-received, often oversubscribed.
“In the last financial year, Zenith Bank reported Tier-1 capital of N1.9 trillion, shareholders’ funds of N2.3 trillion, and a market capitalization of N1.3 trillion. These figures reflect the bank’s solid financial health, further evidenced by a Profit Before Tax (PBT) of N796 billion, making us the most profitable bank in Nigeria. We continue to lead in profitability and deliver significant returns to our shareholders, maintaining the highest dividend payouts in the banking industry.”
Temi Popoola, CEO of the Nigerian Exchange Group, highlighted the importance of this capital-raising initiative, noting its alignment with the bank’s goals of expanding market presence and delivering enhanced value to shareholders. “This effort aligns with our vision to expand market presence and offer superior value to our shareholders,” Popoola stated.
Jude Chiemeka, CEO of the Nigerian Exchange Limited, also praised Zenith Bank for its strong corporate governance, which he identified as a key factor in the Exchange’s growth.
