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 Daily
Independent Online.
* Thursday, July 01, 2004.
Zenith Bank makes history today with N15b IPO
By Mojeed
Jamiu
Finance Editor
and Esan
Sunday
Snr. Finance
Correspondent
Zenith Bank broke new records on Wednesday as investors from all
nooks and crannies expressed support for its Initial Public Offer (IPO)
of over N15 billion, the biggest by any company in the history of the
Nigerian Stock Exchange (NSE).
The bank, through the Investment Banking & Trust Company
(IBTC) and FBN (Merchant Bankers), is offering 800 million ordinary
shares of 50 kobo at N10.90 each, and has secured approval to allot more
shares up to its authorised share capital in the event of over
subscription.
The subscription begins today.
Feelers from stockbrokers on Wednesday showed that investors have
already started buying the stock, which analysts said would be heavily
over-subscribed.
At the investors’ forum organised by the bank to sensitise
investors and the general public on the IPO, the bank’s Chief Executive,
Jim Ovia, described the offer as “a national cake”, which it wants shared
among Nigerians.
The bank has “benefited so generously from the society”, he said,
and that the offer is a way
of saying thank you to “all those who have had confidence and faith in
both the management and board of the bank”.
He advised the public to cobble up enough funds for the offer and
assured that there would be “a bumper harvest for all those who toe the
line of wisdom” by so investing.
Said Ovia: “The IPO really is to allow Nigerians who have been
supporting us over the years share part of the successes of Zenith. We
are sure that the IPO will be grossly over-subscribed, because, over the
years, our results have been highly impressive. While congratulating our
prospective investors, I will like to assure them of the highest returns
on their investment and equity in the industry”.
The bank’s Deputy Managing Director, Godwin Emefiele added: “The
management of Zenith Bank
has assured that investors will live to remember for good, the day they
decided to invest in the bank’s shares which they can pass on from
generation to generation”.
He expressed gratitude to the “distinguished and prominent
Nigerians” present at the event, saying that from today (Thursday) a new
dawn will be set in the Nigerian capital market with the offer.
Chairman of the occasion and doyen of accounting, Akintola
Williams, in his remarks, said “Zenith Bank has proved to be a bank for
today and a bank for the future, it has modernised the business of
banking in the country”.
Chief Executive of Dangote Group, Aliko Dangote, the special
guest of honour, urged Nigerians to invest in the bank’s stocks, the
“best buy” in the industry as of today. He said though he is not in the
habit of buying banks’ stocks he would endeavour to acquire as much of
Zenith’s shares as possible.
His words: “I am a very happy customer of the bank. They have
never disappointed us for the past 10 years we have been doing business
with them. I have also looked at the targets set and I know the targets
are very conservative. I am sure that the bank would beat those targets.
The IPO is even cheap at its current price, I know there would be lots of
returns on the investment, so I will appeal to you all to massively
invest in it”.
Legal luminary Richard Akinjide compared the bank to those in the
developed countries, saying the quality of service it renders is as good
as any other in the world.
He also described the offer price as “too cheap”, adding that the
bank has built a formidable reputation of outright success for itself
both in Nigeria and also in the global financing world.
He added: “Zenith Bank is a big success, we thank the management
for giving us the opportunity to be part of their family. While urging
all of you to buy and be part of history, I assure you that I am going to
take a substantial part of the shares”.
A representative of the stockbrokers, Henry Olayemi, said the market is already agog and
waiting for the shares, stating that with the mood of the investors,
Zenith is about to make history with the IPO.
Aside being the third most profitable bank in the country, the
Central Bank of Nigeria (CBN) had in 2002 confirmed the bank as the
fourth largest after First Bank, Union Bank and United Bank for Africa.
CBN, in its annual report, also said Zenith was the most liquid
among the new generation banks, recording a liquidity ratio of 80.3 per
cent, against the regulator’s requirement of 40 per cent.
In five years to 2003, the bank recorded impressive performance
in several fronts. Total assets plus contingent liabilities grew by 311
per cent from N37.28 billion to N153.44 billion. Gross earnings rose from
N7.07 billion to N17.84 billion (152 per cent). Other indicators such as
pre-tax profit also grew by 255 per cent, from N1.52 billion to N5.44 billion,
while shareholders’ funds increased from N3.42 billion to N12.65 billion
(269 per cent).
Also,
the bank has maintained a triple A (Aaa) rating for six consecutive years
as adjudged by Augusto & Co, a consulting firm and rating agency.
It maintained very good asset quality achieving the lowest
non-performing loans to total loans ratio of 1.4 per cent last year,
compared to the industry average of about 18 per cent.
Augusto categorised Zenith as “… a financial institution of
impeccable financial condition and overwhelming capacity to meet
obligations as and when they fall due”.
The bank was incorporated as a private limited liability company
on May 30, 1990 and was granted a banking licence in June 1990. It began
operations on July 16 of the same year.
It has remained a local international bank with branches
everywhere, a fact which African Petroleum (AP) Chairman Peter Okocha
attested to when he advised prospective investors to take a good
advantage of the bank’s offer.
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