Zenith Bank Public Offer: Why It Makes Sense to Buy Now
Investment is all about fundamentals, market sentiment and the numbers. Zenith Bank Plc has all these in place, plus strong capital and shareholders willingness to inject additional capital when necessary.
The ongoing public offer gives everyone a chance to own shares of one of the profit machines in the banking sector. And silently, some investors are betting on its new group managing director and chief executive office capability to grow Zenith Bank Plc in the next five and perhaps 10 years.
When the dust settled, Umeoji would have a big, strong balance sheet to play with under its group structure. The market would likely see an increase in business, and diversification from Zenith Bank PLC, with a stronger focus on the retail end of the market.
The additional shares from the rights issue and public offer would be listed on the Nigerian stock exchange. This will raise its market capitalisation in folds. Umeoji would be sitting on a financial services group that has the capability to be the most valuable on the Nigerian Exchange.
Track Record
The financial services company numbers rank strongly among the best performers in the banking sector. If you take a short look at Zenith bank shares, you are buying a slice of the financial services group at a cheaper rate. Zenith bank rights issue priced at N36 gives its shareholders an opportunity to increase their interest in the group.
The amount is fairly priced given its stock market performance at the time. The bank is trading at N37.90. This means you will pay more for buying on the Nigerian Exchange trading platform than when you subscribe to its public offerings.
The bank is selling its shares to new investors at N36.50 – the public offering – as part of efforts to meet new capital deadline. What this means for new investors is that you are buying into the future earnings performance and dividends that Zenith Bank plans to achieve.
Based on its historical performance, Zenith Bank is one of the top financial services that has seen consistent earnings growth over the years.
Zenith Bank remains profitable in the banking business and allied services, and its directors often declare dividends, both interim and final, for each financial reporting period. As an old or new investor in the bank, you have two ways to make profit or rather increase your wealth.
While the bank share profit twice in a year, you have chance to increase the value of your investment due to its track record of share price surge. In 10 years, Zenith Bank grew its gross earnings from N403 billion in 2014 to N2.13 trillion at the end of financial 2023.
The bank maintained consistent growth year on year which has positive effects on its profitability. Ajose Adeogun based Nigerian top lender has seen its profit climbing over that last 10 years on consistent basis, up from about N99.5 billion in 2014 to reach N676.909 billion at the end of 2023. This is where the game starts and as a shareholder, you own the proportion of the amount the group made as profit.
Dividend Payment
The board of directors, from time to time, acting as your manager will advise on dividend payment. Zenith pays dividend twice in a year and irrespective of the amount of shares you own, the rate is the same. Investors or shareholders in the company with huge shares will definitely get paid more.
You can easily sell and buy the shares in the stock market. As equities investors, it is important that you know that it is not all listed companies shares you can easily convert to cash in case of an emergency cash needs.
If you have Zenith shares, it is as good as cash in your bank account. You stand to see strong upside potential. Zenith Bank can boost your wealth if the share price surges, and you can also have a share of profit in terms of twice-distributed payments in 12 months.
