Lagos — Zenith Bank Plc has been accorded the highest rating to any Nigerian bank by Standard & Poors.

The agency is the world's foremost provider of independent credit ratings, indices, risk evaluation, investment research and data and supplies investors with the independent benchmarks they need to feel more confident about their investment and financial decisions.

HRH Oba Adedotun Aremu Gbadebo, the Alake of Egbaland receiving the Afribank public offer road show led by Mr Henry Arogundade, General Manager, Commercial Banking (r ) and the Financial Controller, Mr Joseph Koleosho

Zenith Bank was awarded a BB- rating by Standards & Poors, with the foremost rating agency identifying the bank's leading market position in corporate banking; conservative risk profile and good asset quality; solid capitalization and robust funding and liquidity. This is the same as Nigeria 's foreign currency rating of BB-/Stable B.

"Standard & Poors Rating Services considers that the economic and industry risks of Nigeria act as the major constraints on the ratings," the agency said of its rating of Zenith Bank. This implies that Zenith Bank could have been rated higher but for the Nigeria's sovereign rating. The agency observes that Zenith's "stable outlook balances the bank's ability to benefit in terms of size and profitability, from strong macroeconomic growth,"

Meanwhile, the bank has concluded arrangements to raise N129.6 billion from the Nigerian capital market, as directors, parties to the Issue, regulators and shareholders unanimously endorse the offer at the completion Board meeting held weekend in Lagos.

The bank is floating a hybrid offering comprising of 1,763,000,000 ordinary shares of 50 kobo each at N38.90 per share and a Rights Issue of 1,654,557,911 ordinary shares of fifty kobo each at N36.90 per share.

The offer is scheduled to open on December 6, 2007 and to close on January 17, 2007. The lead Issuing House is Zenith Capital Limited, while joint Issuing Houses include: Access Bank Plc, FBN Capital Limited and IBTC Chartered Bank Plc.

Speaking to newsmen shortly after the meeting, Managing Director/CEO, Zenith Bank Plc, Mr. Jim Ovia said that the purpose of the offer is to enable the bank meet the ever increasing demand from its numerous clients for financing and to sustain its cutting edge technology for effective first class service in the desire to surpass superior performance.

According to him, "The proceeds of the offer would be channeled to the following areas: Information technology upgrade to gulp 4 per cent of the total proceeds; Expansion of branch network 6 per cent; Incremental working capital 40 per cent, and Project and infrastructure finance 50 per cent". He further disclosed that 60 new branches have been proposed to be constructed within the next eighteen months, while the bank intend to actively participate in real sector and infrastructural financing.

Ovia noted that the bank is poised to finance big ticket transactions in order to impact on the economy as well as add value to its shareholders.

Standard & Poors had in 2006 assigned Nigeria a long-term foreign currency rating of 'BB-putting the country at par with such countries as Turkey, Ukraine and Brazil. The country's rating was significantly influenced by Nigeria's debt buy back agreement with the Paris Club late 2005.

According to the agency, "The enterprise risk management of Zenith Bank is considered adequate. The bank is by nature a conservative institution with a robust risk culture that permeates the organization".

The report adds that "Zenith Bank aims to be the dominant corporate-focused bank in the Nigerian banking sector, using organic methods of business growth...and due to the bank's strong brand and corporate identity, Zenith is well positioned to profit from Nigeria's ongoing privatization and restructuring of the economy".

The report says Zenith has a good funding profile due to the high growth of low-cost but short-term deposits, which has eclipsed lending growth in recent periods as well as a highly liquid balance sheet, with cash, money-market instruments, and securities (mainly government and federal bonds) accounting for 63% of total assets.

Only last week, Zenith Bank was awarded the Aaa rating for the ninth consecutive year by Agusto & Co. Nigeria's foremost agency, saying that the bank's latest rating reflected its dominant position in the industry, strong asset quality, strong liquidity profile, good capitalization and good earning among others. "We consider Zenith Bank to have a strong capacity to meet its obligations when due, we thus uphold the bank's Aaa rating," Agusto said in its report.