Zenith Bank takes steps on new capital requirement

 

Zenith Bank Plc has revealed that it is taking urgent steps to meet the new N500bn capitalisation requirement of the Central Bank of Nigeria.

 

The lender disclosed this in a statement accompanying its newly released annual report for 2023.

In March, the CBN unveiled new minimum capital requirements for banks, pegging the minimum capital base for commercial banks with international authorisation at N500bn and commercial banks with national authorisation at N200bn, while the new requirement for those with regional authorisation is N50bn.

The banking group, which is in the middle of transitioning to a holding company structure, said, “In 2024, the group will complete the transition to a holding company structure, which is anticipated to position it advantageously for exploring emerging opportunities in the fintech space while bolstering its digital and retail banking initiatives.

“Furthermore, the group is undertaking urgent necessary actions to meet the new minimum NGN500bn equity capital requirement to maintain its international authorisation within the timeframe stipulated by the Central Bank of Nigeria. This will strengthen its presence in key markets to continue positioning for sustainable growth and value addition for stakeholders.”

Based on CBN’s recognition of only share capital and share premium as part of banks’ capital base, Zenith Bank would be looking to raise about N229.26bn to meet the new capital threshold by 2026.

As of December, its share capital and share premium stood at N15.69bn and N255.05bn, respectively.

In 2023, Zenith Bank achieved a triple-digit growth of 125 per cent in gross earnings from N945.6bn reported in 2022 to N2.13tn in 2023.

Year-on-year, profit before tax rose 180 per cent to N796bn from N284.7bn in 2022.

Similarly, profit after tax also recorded triple-digit growth of 202 per cent to N676.9bn from N223.9bn in the prior year.

The group said that the increase in gross earnings was primarily due to growth in interest and non-interest income.

So far, Zenith Bank has announced the highest final dividend payout to shareholders as the directors of the bank proposed a

final dividend payout of N3.50 per share, bringing the total dividend to N4.00 per share.

When approved, shareholders would pocket about N 109.89bn.