KOREDE DAMIFOGO
Zenith Bank Plc is offering its ongoing hybrid rights and public offers at the bank’s lowest price range, locking in about 32 per cent gain in potential immediate return for existing shareholders and new investors.
Nigeria’s largest bank by profit, Zenith Bank is offering a rights issue of 5.233 billion ordinary shares of 50 kobo each at N36 per share.
The shares were pre-allotted to existing shareholders on the basis of one new ordinary share for every six existing ordinary shares held as at the close of business on Wednesday, July 24, 2024.
The bank is also simultaneously offering 2.767 billion ordinary shares of 50 kobo each in a public offer to the general investing public at N36.50 per share.
Minimum subscription is 250 shares, meaning that with N9,125.00, one can be a co-owner of Nigeria’s leading bank.
Application list for the offers, which opened on August 01, 2024, is scheduled to close on September 09, 2024.
A review of the trading history of Zenith Bank at the stock market indicated that the bank’s shares had recently traded as high as N47.35 per share, a price range that market pundits believe is a fair price for the stock.
This recent price range implies a discount of about 32 per cent locked into the ongoing hybrid rights and public offers.
With earnings per share of N21.55 for the 2023 business year, Zenith Bank’s offers carry earnings yield of about 60 per cent, the most attractive value addition among peers and competing offers.
This simply means that beyond its industry-leading dividend payout, investors in Zenith Bank has significant value creation in the investment that can sustain above-average, long-term returns.
At the latest audit, Zenith Bank led the banking industry with a pre-tax profit of N796 billion and profit after tax of N677 billion in 2023.
The bottom-line performance was driven by aggressive business expansion and brand adoption across domestic and foreign markets.
The bank’s gross earnings crossed two milestones from N946 billion in 2022 to N2.13 trillion in 2023. There are only three Nigerian banks with N2 trillion gross earnings.