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.

First quarter results for 2024 already indicated that the bank could surpass the 2023 performance in the current year. Gross earnings jumped by 189 per cent from N270 billion in first quarter 2023 to N781 billion in first quarter 2024. Profit before tax tripled by 267.8 per cent to N320 billion in March 2024 as against N87 billion recorded in March 2023. After taxes, net profit leapt by 291 per cent from N66 billion to N258 billion. Earnings per share rose simultaneously from N2.10 to N8.22.

Analysts believe Zenith Bank has entered a new phase of phenomenal growth. Annualised, the first quarter 2024 performance indicates that the bank’s net profit could surpass a trillion, with potential earnings per share that almost covers the cost of buying into the ongoing offers. Such fundamental performance usually triggers a rally for a stock, underscoring the belief by investment experts that the bank could set a new all-time high within the next few months.

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