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Zenith Bank puts N32bn dividend income on table for Ovia, Stanbic nominees

by Iheanyi Nwachukwu

March 21, 2018 | 1:45 am
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Jim Ovia will earn N12billion as total dividend income from Zenith Bank Plc in the 2017 financial year.
The bank’s shareholding analysis shows Ovia as the Chairman/Non-Executive Director of Zenith Bank Plc directly owns 2.94billion or 9.38 percent of Zenith Bank Plc shares while he indirectly own 1.59billion units of the bank’s shares.
The Board of Directors of Zenith Bank Plc proposed a final dividend of N2.45 per share which in addition to the 25kobo per share paid as interim dividend amounts to N2.70 per share from the retained earnings account as at December 31, 2017.
Stanbic Nominees Nigeria Limited will be raking-in as dividend income about N12billion from the tier-one lender’s total dividend payout. Details of shareholders with substantial interest in Zenith Bank Plc show Stanbic Nominees Nigeria Limited cumulative holding of 7.25billion units of Zenith Bank Plc shares.
Stanbic IBTC Nominees, a subsidiary of Stanbic IBTC Holdings Plc provides custodial services to both local and international clients taking investment positions in Nigeria and are currently the largest custodian of non-pension assets in Nigeria.
Zenith Bank Plc is Nigeria’s largest lender by assets. The bank offers its clients wide range of corporate, investment, business and personal banking products and solutions across 500 plus branches, predominantly in Nigeria, with subsidiaries in the UK, Ghana, Sierra Leone and Gambia, as well as representative offices in South Africa and China.
As a direct shareholder, Ovia’s dividend income will amount to N7.8billion while as indirect shareholder; he should smile home with about N4.23billion.
The N2.7 per share dividend represents yield of 8.8percent on current market price. In 2016, the bank paid interim dividend of 25kobo per share and final of N1.77 per share.
Zenith Bank Plc recently published its full year results where it showed strong performance across top-to-bottom-line figures.
For the purposes of sections 275 and 276 of the Companies and Allied Matters Act (CAMA) and the listing requirements of the Nigerian Stock Exchange, the direct and indirect interests of directors in the issued share capital of Zenith Bank Plc as recorded in the register of directors shareholding is disclosed in the recently released audited results.
While Ovia directly accounts for 9.38percent of Zenith Bank Plc shares, the remaining 90.62percent are in the hands of other shareholders. In terms of number of shareholders, the bank’s share range shows it is weighty around holders of 50,001 to 1million units. For instance, 539,481 shareholders account for 83.97percent of the bank’s 31.396billion outstanding shares, according to the shareholding analysis of the bank.
Also, the bank has 81,858 shareholders who account for 12.74 percent of shareholding while its 20,122 shareholders account for 3.13percent of the total outstanding shares. The tier-one lender impressed the market and investors with full year 2017 results as group gross earnings increased by 46.69percent to N745.19billion against N507.99billion in 2016.
Also, Profit before tax (PBT) increased by 29.80percent to N203.46billion from N156.748billion in 2016, while Profit after tax (PAT) increased by 37.24percent to N177.933billion from N129.652billion in 2016.
“The strong dividend yield is expected to drive momentum to the stock in the short-term. We maintain a HOLD rating on the shares with a target price of N31.9”, said the Kayode Tinuoye-led team of research analysts at Lagos-based United Capital Plc.
Zenith Bank’s earnings are 55.14percent higher than Bloomberg’s polled estimates, and 8.49percent higher than our forecast, said analysts at Cordros Capital in a note to clients.
Net interest income (NII) increased by 7.4percent to N257.991billion from N240.179billion in 2016. Loans and advances decreased by 8.3percent to N2.100trillion from N2.289trillion in 2016. Zenith Bank grew deposits by 15.2percent to N3.437trillion from N2.983trillion. Cost to Income Ratio (CIR) declined to 42.9percent from 48percent in 2016. Return on Average Equity (ROAE) decreased to 15.9percent from a high of 19 percent in 2016.
Given the strength of these results, Olubunmi Asaolu-led team of research analysts at FBNQuest expects to see upward revisions to consensus estimates “and a positive reaction from the market.” For the analysts, their estimates are under review as they rate the shares of Zenith Bank Plc ‘outperform’.
In 2017, the bank’s Basic and Diluted earnings per share (kobo) increased to 566kobo from 412kobo in 2016. Listed on the Premium Board of the Nigerian Stock Exchange (NSE), Zenith Bank Plc is valued at about N866.543billion while share price stood at N28kobo per share as at Monday.

 

Iheanyi Nwachukwu

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by Iheanyi Nwachukwu

March 21, 2018 | 1:45 am
  |     |     |   Start Conversation

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