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 Daily
Independent Online.
* Thursday, July 01, 2004.
Zenith Bank guns for another
first with IPO
By Mojeed Jamiu
Finance
Editor
Today
Zenith International Bank Limited will be making history as a financial
institution with one of the highest Initial Public Offers (IPO) on the
floor of the prestigious Nigerian Stock Exchange (NSE).
With
73 branches online-real-time across the country coupled with a very
robust balance sheet and sound management led by Jim Ovia, investors and
other stakeholders are in for a real good time with the bank’s N8.7
billion worth of shares at N10.90 each.
Zenith
Bank is offering for subscription 800,000,000 Ordinary shares of 50Kobo
each at N10.90 Kobo per share with the proviso that should the offer be
over-subscribed, the directors may issue additional shares to the public
up to the authorized share capital of the bank.
The
board and management of Zenith International Bank Limited had last month
approved the IPO of the bank for listing on the floor of the Nigerian
Stock Exchange.
This
news more than gladdened the hearts of investors who believed any
investment on the shares of the bank could only be another success story
for them, given the bank’s antecedents in the financial sector of the
country.
The
Central Bank of Nigeria (CBN) had in 2002 formally confirmed the bank as
the fourth largest in the industry after First Bank, Union Bank and
United Bank for Africa.
The
apex regulatory body, also in the Banking Supervision Annual Report for
2002 said the bank emerged the most liquid among the new generation banks
as it recorded a liquidity ratio of 80.3 per cent against the regulator’s
requirement of 40 per cent.
In the
overall banking system, First Bank emerged the most liquid with 83.5 per
cent to be followed by Zenith, 80.3 per cent and Citibank with 65.4 per
cent respectively.
In
five years, from 1999 to 2003, the bank recorded impressive performance
on many fronts. Total assets plus contingent liabilities grew by 311 per
cent from N37.28 billion to N153.44 billion. Gross earnings increased
from N7.07 billion to N17.84 billion representing 152 per cent growth.
Other indicators like 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 representing 269 per cent growth.
Zenith
Bank has consistently maintained a triple A (Aaa) rating for six
consecutive years since 1999 as adjudged by Augusto & Co, a reputable
consulting firm and rating agency. The bank has maintained very good
asset quality achieving the lowest non-performing loans to total loans
ratio of 1.4 per cent as at 2003 year end, compared to the industry
average of about 18 per cent. The rating agency categorized the bank as
“…a financial institution of impeccable financial condition and
overwhelming capacity to meet obligations as and when they fall due.”
Zenith
was incorporated as a private limited liability company on May 30, 1990
and was granted a banking license in June 1990. It however commenced
operations on July 16, of the same year.
A
financial institution with Aaa rating is presumed to have an impeccable
financial condition and overwhelming capacity to meet obligations in a
timely manner.
The
rational for Zenith International Bank, which commenced banking business
in the country on July 16 1990, just a year after it was licensed,
according to Agusto, was a reflection of the bank’s sound financial
condition, which is complemented by its industry position as the
fourth-largest bank in Nigeria on the basis of total assets and core
capital.
According
to Agusto, a consulting firm and highly recognized rating agency in the
financial sector in the country, “the rating is supported by very good
asset quality, good and sustainable corporate earnings, strong capital,
good liquidity and good market share. The bank has increased its bank
network strategically and supported it with good service delivery,
leading to improvement in its market share of low cost deposits.”
Daily Independent also learnt that some prospective investors are
beginning to lodge their funds in the bank to take advantage of the IPO
in anticipation that the offer will be one of the highly over-subscribed
offers in the country.
The
bank’s board also approved Investment Banking and Trust Company Limited
(IBTC) and FBN merchant bankers as issuing house and First Registrars, a
subsidiary of First Bank Plc, as registrar to the issue.
Godwin
Nwigwe, a stockbroker also attributed the anticipatory mood of the bank’s
offer in the market to the performance of the bank over the years, which
has consistently enhanced its shareholders’ investment.
Nwigwe
said: “I am absolutely confident that the shares of Zenith, when it is
eventually introduced, will be over subscribed. The bank has continued to
enhance its shareholders’ value and that is what an average investor is
looking for. You need to study the annual report of the bank and see the
profitability trend for you to really understand what I am talking about.”
In a
chat with Daily Independent after the shareholders’ meeting, the
Chief Executive Officer of the bank said the decision to be publicly
quoted was borne out of the desire of the management to allow all
Nigerians share from the fortunes of the bank.
His
words: “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.”
It is
not just banking at Zenith, hence, as an emerging leader in social
responsibility, the bank is building on its superior performance to both
increase shareholders’ value as well as put smile on the faces of the
less privileged in the society.
As the bank grows in size and profitability, so also has it grown
to become a leader in shaping the impact of corporations as constructive
forces on the lives of people and communities within their spheres of
operations.
This
willingness to give to the “under privileged” has bred an unmatched
spirit of benevolence indicative of the bank’s many humanitarian and
charitable gestures. This philanthropic culture is embodied in the
resolute passion of the bank to give back to society that has played key
role in its success.
On the
role of Zenith Bank in the successful heart surgery of a two
year-old-girl (Vera Uwuagu) recently, Mr. Tony Chiejina, head of the
corporate communications department of the bank said, “the bank deemed it
appropriate to help because it feels good when you help make happy. It is not enough to be making
money from the society you operate within without giving back to
them. At Zenith, we have a
department whose responsibility is purely philanthropic. At our bank, Corporate Social
Responsibility is a way of life.
Zenith’s philanthropy is a fully functional department responsible
for identifying areas, sectors and causes deserving of philanthropic
aid. Some of these areas
include the less privileged and needy members of society, victims of
natural and man-made disasters and other charitable causes. We will continue to help those
who need help.”
With
such philanthropic gestures, it unimaginable to assume that Zenith Bank
will still create room for improvement in the giving arena. To this end,
it has further set aside one per cent of its Profit Before Tax for
philanthropic causes and it is making a huge policy statement out of it.
The bank looks poised to continue to build up on its already exemplary
track record.
For
the board and management of Zenith International Bank Limited, the stage
is set ant operators are not talking of the expected rate of success of
the initial public offer, but rather how the issuing houses are going to
many the expected high level of over-subscription.
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