Jim Ovia
19 November 2007
Zenith Bank Plc last Thursday won the 2007 quoted company of the year award of the Nigerian Stock Exchange(NSE).
The award which was announced by the President of the NSE, Chief Oba Otudeko, at the Annual President's Merit Award on Thursday in Lagos saw Zenith surpassing 18 other companies to win the prestigious award.
The bank is currently the most capitalised companyon the NSE, with a market capitalisation of over N580 billion and the biggest bank in Nigeria with total assets and contingents of N1.2 trillion and a profit before tax of N26.15 billion as at June 2007. Otudeko, who is also the Chairman of the Council of the NSE while commending the winners said the award, inaugurated in 1972, was aimed at promoting corporate governance and creating healthycompetition among quoted companies.
In Washington recently at the 2007 IMF/World Bank annual meetings Zenith Bank was singled out of the several Banks in Africa as the most socially responsible bank in the continent. Zenith drive according to the organisers of the event is not all about customer satisfaction and technology.
It emerged as one of the biggest spenders for social causes in Nigeria. One of the outstanding social spending done by the bank was that disturbed by the state of roads in the vicinity of its head office building in Ajose Adeogun in Victoria Island, the bank collaborated with the government of Lagos state to reconstruct the road at a whooping cost of N1billion.
This not only brought relief to the road users but also beautified the environment. But an area it made the most strategic intervention in corporate social responsibility is in sports. Documented reports has it that it puts in as much as N52.5 million into sports and N30.67 million to educational development. The Bank considers these as necessary efforts to give back to a society that has given it so much.
The bank will again on the 6th of December open its door to investors to subscribe to its shares. The bank is offering for subscription 1,763,000,000 ordinary shares of 50 kobo each at N38.90 and a rights issue of 1,654,557,911 units at N36.90 per share.
The shares on offer are coming at a discount of at least N10 per share. As at the end of trading activities on Wednesday before the shares were placed on technical suspension, Zenith stocks were trading for N46.09, meaning that at the offer prices, a discount of or price gain is being given to prospective investors in the offer. The bank, two weeks ago announced a strong first quarter result showing a gross earning of N28.86 billion for the first quarter ending September 30, 2007. The bank's first quarter result, coming on the heels of the full year's result that saw Zenith Bank emerge the first to cross the trillion naira mark in total assets, was well received in the market.
Details of the first quarter result showed that the bank also recorded a profit before tax of N10.33 billion, up from N6.41 billion last year while profit after tax amounted to N8.06 billion, showing a remarkable jump of 70 per cent over the N4.73 billion recorded for the corresponding period last year.
The bank has in the last four years enjoyed high patronage on the floor of the Nigerian Stock Exchange (NSE) because of its consistently strong financial performance and successfully raised N53.63 billion from a public offer early 2006. Following the 2006 public offer, Zenith stocks rose from N16.90 to cross the N60 mark, making it the highest priced banking stock in the market. This represented a total gain of N49.24 per share or 291.36 per cent.
Altogether, the bank's capitalisation on the NSE appreciated by N451.7 billion within the period, meaning that an investor who bought a million shares at N16.9 million during the bank's last public offer would have made capital gains of N49.2 million within the period.
Zenith Bank remains the biggest bank in Nigeria in total assets plus contingents of N1.2 trillion and the most capitalised quoted company with a total market capitalisation of over N400 billion.
The bank at the end of its last financial year ending June 30, 2007 paid out a dividend of N9.26 billion representing one naira per share in addition to a four for one bonus issue.
The operating results of the bank in the last five years indicate an impressive performance on all parameters. Total assets plus contingents grew by 730.06% from N153.44 billion as at the end of June 2003 to N1.271 trillion.
Within the same period, gross earnings increased from N17.8 billion to N94.9 billion, representing a 433.14% growth while profit before tax also grew by 372.42% from N5.44 billion to N25.7 billion. Profit after tax for the same period rose by 327.27% from N4.42 billion to N18.8 billion. Also impressive were the remarkable growth in shareholders funds from N12.651 billion in 2003 to N114.6 billion in 2007, indicating an increase of 823.81 per cent and total deposit from N61.5 billion in 2003 to N634.5 billion in 2007 representing a 931.54 per cent jump.
The strength of the Zenith brand was put to test during its Initial Public Offering in July 2004 when the bank went to the floor of the Nigeria Stock Exchange to raise funds for capital projects. It was a referendum of sort and a grand endorsement of the Zenith brand as the bank's offer recorded tremendous successes, with an unprecedented and record-breaking subscription level of 554 per cent and number of shareholders increasing to over 300,000, the largest number of shareholders in any one company in Nigeria.
Nigerians spread across 36 states of the federation, foreign and institutional investors, all took part in what is regarded as a share of the national cake The Zenith Bank stock which was listed at N10.90 per share within a period of 14 trading days hit a high of N20.70 per share, about 90 per cent growth, arguably the quickest rise by any listing. The Zenith stock combines capital appreciation with high liquidity.
The benchmark All Share Index, a value-based overall index that gauges share price movements of all equities, during this period merely grew by 5.53 per cent. The stock combines capital appreciation with high liquidity. Zenith Bank was the third most-active stock last week and accounted for 16 per cent of turnover in 32-stock banking sub-group, 13 per cent of aggregate turnover on the two tiers of NSE consisting of 205 companies.
There cannot be any doubt that over the past 16 years of its existence, Zenith Bank has succeeded in entrenching itself in the Nigerian banking industry as a leader in providing innovative customer services solutions. It has particularly played the pioneering role in bringing to existence most of the IT-based services that now dot the industry. Not only this, the Bank is constantly on the move technologically all in its desire to always move to the next level in the customer services strategy.
About a decade ago, the Bank became the first in the industry to offer on-line, real time services to customers. This revolutionalised customer services delivery and brought about unprecedented convenience in its wake as operators endeavoured to achieve maximum branch coverage with this service for competitive advantage.
Similarly, the Bank became the first to build its own website and went ahead to equip the site with substantial e-banking capabilities. These pioneering roles inspired Zenith Bank to subsequently develop a number of other leading I-T products such that the Zenith franchise has become synonymous with Information Technology in Nigeria.
Some of these products include Electronic Point of Sale, Zenith Flowline, Zenith Automated Direct Payment System, Etranzact, Zenith Siftpay, Z-Save Card, Z-Credit Card, Web-Surffer Card, Z-Travelex Cash Passport, Z-Mobile Commerce etc.
Perhaps, one other area it has of recent tried to replicate earlier technological successes is in the ATM technology. It launched a unique and first ever branded ATM Galary in Lagos. This is a virtual banking office, without human tellers, with capability to handle more complex transactions than the conventional ones.
It hopes to see at least 30 per cent literate Nigerians patronise ATM by 2011.
Usage rate currently is still below five per cent. In fact, another independent study found that in Nigeria as a percentage of that of South was as low as two per cent. Given its efforts to revolutionalise ATM usage, it is hoped that the situation will improve tremendously in a few years time.
Recently, Zenith Bank opened a full fledge bank in London, banking subsidiary in Ghana with a pledge to replicate its customer-centric quality standards outside the shores of Nigeria. Interestingly, the Ghana subsidiary is first in the series of such investments planned between 2006 and 2011.
In order to use gross selling capabilities to achieve its broad goals, Zenith Bank has joined the rank of others that seek to become financial supermarkets.
Accordingly, it set up subsidiaries to operate in the insurance, securities trading, pension custodian and registraship markets with the mandate to ensure uniform Zenith quality services to clients.
Apart from these key investments, another major area the Bank took major interest is the small and medium-scale sector. During the period alone, it increased equity exposure to this sector by N1.16 billion to attain a total of N2.62 billion. But an important observation here is the preponderance of information, technology and telecom-related enterprises. This reflects in the known orientation of management.
Be the first to Write a Comment!
Copyright © 2007 Vanguard. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
