Zenith Bank launches N290bn hybrid rights issue to meet CBN capital requirement

Zenith Bank Plc has initiated a Hybrid Rights Issue and public offer aiming to raise N290 billion to meet the Central Bank of Nigeria’s new minimum capital requirement of N500 billion.

With its current capital standing at N270.7 billion, the bank needs an additional N229.225 billion.

The offer includes 5.2 billion ordinary shares at N36 per share for existing shareholders and another 5.2 billion shares at N36.50 each for the public, available from August 1 to September 9, 2024. Investors are required to apply for a minimum of 250 shares.

The capital raised will also be used for technological investments and additional working capital to support Zenith Bank’s growth.

READ ALSO: Zenith Bank to raise N290bn through rights issue, public offer

The bank, which has a history of strong financial performance, saw its share price drop 6.86% this year, potentially offering a favorable entry point for investors.

Despite the recent decline, the bank’s five-year share price growth of 57% positions it as the second most capitalized bank on the Nigerian Exchange (NGX) with a market capitalization of N1.130 trillion.

Zenith Bank ranks 2nd in Africa according to the Africa Report New TAR Index, based on profitability, liquidity, solvency, asset quality, and size.

In 2023, it achieved the highest net interest income of N736.182 billion and pre-tax profit of N795.962 billion, making it the most profitable bank on the NGX.

Proceeds from the offer will support loans to corporate, SME, and retail sectors, and expansion into new markets.

The bank’s current valuation suggests potential for capital appreciation, though global market volatility poses a challenge to its recapitalization efforts.