March 31, (THEWILL) – Nigeria’s largest bank by market capitalization, Zenith Bank Plc, expanded its balance sheet by a remarkable 47.2 percent to N30 trillion in FY 2024 against N20.36 trillion recorded in the previous year (FY 2023). According to its financial statements filed with the Nigerian Exchange last week, the group’s assets expansion points to a strong base for the recapitalization exercise that banks are currently undergoing.
Zenith Bank Plc earlier in the year announced that it had obtained approval from the Central Bank of Nigeria and the Securities and Exchange Commission for its recently concluded rights offer through which it successfully raised N350.46 billion.
In July 2024, the company announced a hybrid offer consisting of a rights issue and a public offer, seeking to raise N290 billion—a necessary step to meet the CBN’s capital requirement of N500 billion.
Following this, the bank announced on January 27, 2025, that its hybrid offer—consisting of a rights issue of 5,232,748,964 ordinary shares at 50 kobo each priced at N36.00 per share, alongside a public offer of 2,767,251,036 ordinary shares at 50 kobo priced at N36.50 per share—witnessed increased participation.
According to the company, the public offer was oversubscribed by 160.47 percent, leading to the allocation of 4,440,587,250 ordinary shares based on the offer’s terms and the Central Bank of Nigeria’s Capital Verification Exercise.
The rights issue had a subscription rate of 100.18 percent, resulting in the allotment of 5,232,748,964 ordinary shares.
With a total of N350.46 billion raised from this hybrid offering, the bank has now met the Central Bank of Nigeria’s N500 billion minimum capital requirement at a share capital of N614.65 billion.
According to the bank, the funds raised from this hybrid offering will be directed towards bolstering its market position, pursuing expansion opportunities in Africa and Europe, and investing in technology upgrades.
“To achieve the bank’s ambitions expansion and continued domination of the industry leadership, it requires a strong, expanding and sustainable balance sheet because of the competition as well as the uncertainties of economic headwinds that pervade the space,” said Macaulay Nnamani, an investment banker.
The bank’s strategic support for the economy was intensified during the year through its leading portfolio which saw loans and advances climb from N6.55 trillion in 2023 to N9.95 trillion in the review year, constituting a rise of 52 percent as the Nigerian government embarks on accelerated economic growth. Further examination of the financial statements showed that the bank’s exposure in oil and gas rose to N2.1 trillion against N4.1 trillion in 2023, with an impairment provision of N175.4 billion.
Exposure to manufacturing also rose to N2.6 trillion in the review period from N1.5 trillion in 2023.
The growing customer confidence in the 35-year-old financial services institution reflected in the significant rise of 41 percent recorded in deposits by customers to N21.9 trillion from N15.1 trillion in the previous year.
Zenith Bank Plc total assets of N29.96 trillion, cements its position as one of Nigeria’s largest financial institutions.
As already stated, a significant portion of Zenith Bank’s assets—N21.96 trillion—is made up of customer deposits, while its total shareholders’ funds stood at N4.03 trillion.
This comprises N2.02 trillion in retained earnings, N20.54 billion in share capital, and N594.11 billion in share premium.
Extant industry regulations forbid the banks from including retained earnings or profits as part of share capital for the ongoing recapitalisation exercise.
These contributed to the stellar performance of Zenith Bank in its 2024 operations — posting a record profit after tax of N1.03 trillion which represents a 52.5 percent increase over the N676.9 billion reported a year earlier.
The bank also reported a pre-tax profit of N1.32 trillion, which is also a record for the bank, and a 66.6 percent increase year on year.
A cursory analysis of the results also shows that the bank reported Gross Earnings of N3.9 trillion, with interest income and trading income contributing majorly to the top line.
As part of its earnings announcement, the bank proposed a final dividend of N4.00 per share, bringing its total dividend payout from 2024 profits to N5 per share, compared to N4 per share in 2023.
A bulk of Zenith Bank’s income was generated within Nigeria, accounting for N3.5 trillion out of the N3.97 trillion in net consolidated revenue.
Income from its African and European operations totaled N510 billion, up from N281.1 billion in the previous year.
The Group’s net interest income stood at N1.73 trillion, driven by robust earnings from loans and advances, as well as significant investments in risk-free government securities such as treasury bills.
Interest income from loans and advances to customers rose by 126 percent year-on-year to N1.52 trillion, while interest income from treasury bills grew by 224 percent to N579.92 billion.
On the cost side, interest expenses increased by 142.96 percent year-on-year to N992.47 billion, reflecting the rising cost of funds amid tighter monetary conditions.
The Group also reported N206.8 billion in net fees and commission income, largely driven by its electronic banking business, account maintenance fees, and foreign withdrawal charges.
Gross earnings from commissions and fees rose to N356.3 billion, up from N177.5 billion in the prior year.
A major income window was the e-banking income which earned the bank approximately N80 billion from electronic-related fees, N73 billion from account maintenance charges, and N79 billion from foreign withdrawal charges.
Having posted a profit before tax (PBT) of N796 billion at the end of its 2023 financial year, the group managing director/CEO, Zenith Bank Plc, Dr Adaora Umeoji, had said the bank was on the path to surpassing a N1 trillion PBT by the end of its 2024 financial year.
She expressed confidence that, with the quality of the board and management and a strong corporate culture, the bank is well-positioned to deliver superior value to investors and other stakeholders and to navigate the recapitalisation process successfully.
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
