By Uche Usim
Dame Adaora Umeoji, the Group Managing Director and Chief Executive Officer of Zenith Bank Plc, has shed light on how the financial giant expanded its customer base from 5 million to 33 million in just five years.
During the “Facts Behind the Offer” meeting at the Nigerian Stock Exchange (NGX) on Monday, she highlighted the bank’s unwavering commitment to three core pillars: investing in people, leveraging cutting-edge technology, and delivering exceptional service.
She emphasised that this strategic focus has distinguished Zenith Bank within the highly competitive banking landscape, transforming it into a preferred choice for millions of enthusiastic depositors across the nation. Umeoji attributed the bank’s remarkable growth and success to its relentless pursuit of excellence in these areas, which has not only enhanced customer satisfaction but also solidified its reputation as a leading financial institution in Nigeria.
The Genesis
Zenith Bank’s achievement is a unique story of vision and value. It is an institution that was founded in May 1990 by our Chairman, Dr. Jim Ovia, whom we call the Nostradamus of our time because of his ability to forecast a day like this when banks would be required to raise more capital. He positioned Zenith Bank to be the number 1 bank by shareholders’ funds, with adequate capital buffers making us raise the least amount of capital among our peers.
His vision was to create a global first-in-class financial brand and a professional institution anchored on people, technology, and service, with the core aim of providing premium value to all stakeholders.
Capital raises
Zenith Bank’s entry into the capital market has been associated with huge successes.
Our Initial Public Offer in 2004 was massively oversubscribed by 524 per cent. This was closely followed by a Public Offer in 2006 which was equally oversubscribed. We then had a Combined Offer in 2007 which was oversubscribed by 496 per cent.
As a result of these successes, the bank was able to raise $1billion Eurobond in two tranches, which was successfully redeemed in 2022. It is also pertinent to note that during these series of capital raise, our riginal colour, red, did not change, our logo did not change, our Culture did not change, our name did not change, the brand did not change and we remained undiluted and we grew exponentially emerging the strongest among our peers.
This is because of the solid foundation and strong corporate governance culture laid by Dr. Jim Ovia. We will continue to ride on this legacy as we run a professional organization that will outlive generations to come It may interest you to note that as at December 31, 2023, Zenith Bank’s Tier-1 capital was N1.9 trillion, the highest in the Nigerian banking industry.
Shareholders’ funds stood at N2.3 trillion, the highest in the industry.
We recorded a market capitalisation of N1.3 trillion, also the highest.
The Bank achieved PBT of N796 billion, making us the most profitable bank in Nigeria.
We paid a dividend of N4 per share, making us the highest dividend paying bank in Nigeria.
This trend has been sustained in the past 5 years.
It would also interest you to note that our dividend payout was 25 per cent of our organic profit without FX revaluation gains; this implies that we have the capacity to even pay more dividend organically without FX revaluation gains.
Our total deposit liability stood at N15.2 trillion Naira, placing us among the top three banks in this category.
We recorded the largest loan portfolio of N7.1 trillion and yet our NPL Stood at 4.4 per cent, which is well below industry average; this shows our solid risk maagement capacity.
The total assets of the bank stood at N20.4 trillion.
We have a network of 447 branches and cash centers, as well as 2,100 ATMs across Nigeria and other countries.
We have leveraged on our huge network of agents to take banking services to the unserved and underserved communities, to consolidate our financial inclusion Agenda.
These achievements and more have encouraged us to expand our footprints In Africa, Europe, China, and the United Arab Emirates.
Key performance indicators
Our investment in our people, technology and service has transformed us into a global brand, placing us among the top 10 banks in Africa and the best in Nigeria. We have also won several awards over the years; some recent ones being: the number One Bank in Nigeria by Tier-1 Capital 2024, by The Financial Times. This is for the 15th consecutive time; the Best Commercial Bank in Nigeria, 2024 by World Finance Magazine; the Best Bank in Nigeria, 2024 by Global Finance.
Corporate identity
Our corporate culture is critical to our success. We have a solid Board and Management, comprising individuals from diverse skills, disciplines, and professional experience. The Executive Management team of the bank has an average of 30 years of banking experience in Zenith Bank, and all rose through the ranks. We pride ourselves in being a gender-inclusive organization, with a 31 per cent female representation on the Board and a 50:50 male and female ratio in the entire workforce. I am honoured to inform you that we have had five different CEOs over the years, including myself being the first female Group Managing Director of Zenith Bank. This shows that it is possible for the Girl Child. All these transitions were seamless and a clear testament to our solid succession planning.
Our dominant footprint in Nigeria, West Africa, and our international network presents exciting growth opportunities. We currently have subsidiaries and representative offices in Ghana, Sierra Leone, Gambia, UK, UAE, and China; and we recently obtained a banking license to commence operations in Paris. We are going to leverage the Paris subsidiary to consolidate our business in the African Francophone region, starting from Cote d’Ivoire and Cameroun. It is pertinent to note that all our subsidiaries are making good profits and contributing almost 20 per cent to the Group’s performance.
Our expansion strategy is following our customers’ businesses and targeting countries where we have strong potential for growth.
Our FinTech subsidiary, ZenPay, has recently signed an agreement with the African Continental Free Trade Area (AfCFTA) for the development of SMARTAfCFTA, a digital trade portal positioned to revolutionize Pan-African trade. This trade agreement will help us dominate the entire African trade business.
Technology
Technology has always been one of our tripods as a Bank. We have completely overhauled our IT infrastructure with best-in-class and robust technology that will improve our processes and services across all our business verticals. We have completed several modules of the IT infrastructure and will be going live with our core banking application very soon. Our Fintech subsidiary, ZenPay, is a comprehensive digital payment solution platform set to revolutionize the financial services landscape.
Loans
Our loan portfolio is well-diversified across upstream oil & gas, trade, manufacturing, public sector, and other key sectors of the economy, thereby spreading our risk and increasing value to our shareholders. The corporate arm of our business remains integral to our success, contributing 58 per cent to the group’s revenue in 2023, while the retail and SME segments contributed 42 per cent. Our partnerships with international financial institutions have improved our capacity to provide more support to critical sectors such as SME, retail, creative industries, among others. Trade Finance is a critical component of our business. Zenith controls 25 per cent of the import inflows and about per cent of the Export business in Nigeria.
Retail banking
Our retail drive and financial inclusion strategy have resulted in a significant increase in our customer base. We grew from 5m to 33m customers in the past five years. We will continue to drive this growth using our robust digital platforms. The bank’s revenue from retail business has recorded significant increases over the years. In addition, Zenith Bank will leverage digital banking channels, ATMs, and POS services, as well as agency banking relationships to drive the retail and SME segments of our business.
ESG
Zenith is committed to the tenets of ESG. We are an environmentally friendly bank and we encourage our customers to adopt ESG practices in all their operations. Cost savings are at the front burner for us and we have started the use of alternative energy, like solar and CNG generators, to power all our ATMs and some of our branches to enable us to save costs. We have reduced our carbon footprint by cutting down on greenhouse emissions, using other sources of renewable energy in all our business locations. As a Bank, we also incorporate sustainability practices in all our credit processes.
Zenith Bank is a futuristic financial institution that values the loyalty of its existing shareholders, and we are equally responsive to the yearnings of prospective investors who want to be part of the Zenith success story. This is why we decided to have a combined offering to accommodate both groups. We are offering approximately 5.23 billion units of shares of 50 kobo each at N36.00 per share to our existing shareholders through a Rights Issue of 1 new share for every 6 held. We are also offering 2.77 billion ordinary shares of 50 kobo each at N36.50 per share to the public through a Public Offer. We are very conscious of not diluting our existing shareholding structure, which is why we are offering 65 per cent to our existing shareholders and 35 per cent to the public. We are very confident that after the ongoing recapitalization exercise, the bank will experience exponential growth, and shareholders will get greater value for their investment.
Zenith Bank has a track record of efficient capital utilization: 35 per cent of the proceeds realized from this combined Offering would be used to fund our expansion strategy, increasing our footprint in Africa and other parts of the world; 20 per cent will be used to enhance our IT infrastructure and digital capabilities; the balance of 45 per cent will be deployed as working capital to support the real sector of the economy with a focus on the retail and SME segments.
Parties to the transaction
To ensure the success of this offer, we have engaged some of the best transaction partners such as Stanbic IBTC Capital, Quantum Zenith, Cardinal Stone, Chapel Hill Denham, Coronation Capital, Meristem Capital, and Vetiva. The offer opened on August 1, 2024, and will close on September 9, 2024. Investors can purchase our shares through the NGX Invest platform, Zenith bank digital platforms, and by visiting any of our branches nationwide.
