Financial Analysis of Zenith Bank 2007

Table of Contents

Executive Summary 3

Introduction and General Company Description 4

Company Profile 4

History 4

Business Structure 4

Share holder structure 5

The Last Offer 6

Board of Directors/Management 6

Services/ Company Business 7

Score Cards 7

Awards & Achievements 8

Competitive Advantages 8

Strong Reputation 8

Impressive Financial Performance 9

Market Share 9

Awards and Ratings 9

Highly Diversified Revenue Base 9

Industry/ Sector Analysis: Challenges & Risk Factors 10

Challenges of the Nigerian Banking Industry Post-Consolidation 10

Perceived Market Risk 11

Economic/Industry risk 11

SWOT (Strength, Weaknesses, Opportunities and Threats) Analysis 12

Strengths & Opportunities 12

Weaknesses & Threats 12

Financial Analysis 12

Performance Overview (2003-2007) 12

Gross Revenue and Profit-After-Tax 12

Total Assets and Total Deposits 13

Asset Quality, Liquidity and Capital Adequacy 14

Earnings Performance 15

Investment Issues 19

Competitors Analysis 20

Zenith Bank and the Nigerian Stock Market 20

Recommendation 23

Sell/Buy Conclusion 24

References 24

Executive Summary

• Zenith Bank’s 3rd Public Offering (since inception) opened on Thursday, December 6, 2007. It is one of the foremost Banks returning to the Primary market to source for fresh equity capital as a means of augmenting and sustaining its cutting-edge competitive strategies in information technology and growing demands in real sector financing. The Bank is offering a hybrid Offer of 1.763bn Ordinary Shares of 50k at N38.90k and Rights Issue of 1.655bn Ordinary Shares of 50k at N36.90k.

• According to the Bank in its Offer prospectus, the strategic focus of the Offer is the real sector financing via project & infrastructure finance which accounts for 50 per cent of the expected Offer proceeds. The remaining proportion (50 per cent) will be channelled to expand branch network, upgrade ICT and support working capital.

• Zenith Bank has been a consistent winner of several classy laurels and awards of distinction locally and offshore in all spheres of performance benchmarks. It has continually been adjudged sound in growing earnings, healthy balance sheet with impeccable assets quality and financial soundness, excellent customer focused strategies and superb corporate social responsibility.

• The above are evidenced by the Bank’s steady and first rate record of risk assets quality. This feat has earned the Bank first class ratings from 2 both Nigerian and international rating agencies. It bagged Aaa ratings from both Agusto & Co (Nigeria's foremost rating agency, 1999-2007) and Pharez Composite Rating, AA- (2003-2004) & A(2007) by Fitch Rating, all extolling its second–to-none customer service delivery, excellent financial condition and uncompromising capacity to meet maturing obligations.

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Introduction and General Company Description

Company Profile

History

Zenith Bank Plc was incorporated as a private limited liability company by a group of Nigerians (including the Managing Director/Chief Executive) on 30th May 1990. The Bank received its commercial banking license on 20 June 1990 and commenced operations on 16 July 1990. On 21st April 2004, the shareholders of the Bank approved the subdivision of its shares