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Nigeria’s largest bank – Zenith Bank lists $850 million worth of shares on London Stock Exchange
Zenith Bank Plc, Nigeria’s largest bank by tier-1 capital and shareholders’ funds, was on Thursday listed on the London Stock Exchange (LSE).
The listing of US$850 million of its shares at US$6.80 each was a major step by the bank at improving liquidity in its stock through Global Depository Receipts (GDRs).
By its size, Zenith Bank’s US$850 million GDR listing is the largest of any Nigerian bank on the LSE to date and is expected to help the bank, with a market capitalisation of US$4.24 billion, access to a wide range of major institutional investors and significantly raise its international profile.
GDRs are negotiable certificates issued by depository banks, which represent ownership of a given number of a company’s shares which can be listed and traded independently from the underlying shares. The instruments are typically used by companies from emerging markets and marketed to professional investors only.
At a formal ceremony held at the LSE, the bank admitted 125 million GDRs, which will trade on LSE’s International Order Book, the world’s largest and most liquid GDR market. Each Zenith Bank GDR represents 50 ordinary shares
Speaking at the event, the Group Chief Executive Officer of Zenith Bank, Godwin Emefiele, said the listing on the LSE would afford foreign investors and fund managers in global emerging markets the opportunity to access the bank’s shares, particularly those, who due to internal policies or procedures are prevented from trading, purchasing, selling shares in markets other than through the LSE.
He also noted that establishing a liquid London GDR line would help Zenith Bank gain access to international investors, particularly those from the global emerging markets who are increasingly showing interest in Nigeria.
Emefiele said greater interest from global funds can be tapped into through the GDR listing as it would signal best in class disclosure, corporate governance and compliance.
Among other benefits, the listing is also expected to enable the bank, if the need arises, use international debt and equity markets for future capital raises, thereby lowering cost of capital.
It also gives willing investors additional comfort in the Zenith equity, as international corporate governance practices to which the bank will now have to submit, are considered “best in class”.
Head of Primary Markets, Africa, at LSE, Ibukun Adebayo, said: “Zenith Bank’s listing highlights London’s leading role in supporting Nigeria’s burgeoning financial sector.
“Three major Nigerian banks have listed in London, demonstrating UK and international investors’ appetite for exposure to this fast growing and increasingly diverse economy.”
By this feat, Zenith joins a vibrant community of 58 emerging market banks listed in London, valued collectively at just under US$75 billion. The listing also gives Zenith access to the deepest international pool of capital in the world, currently holding more than US$1.8 trillion in international equity assets.
The LSE is the largest international stock exchange for African companies. Since 2008, Africa-focused companies listed on the bourse have raised over £4.2 billion (US$6.4 billion) in new and further issues.
Zenith Bank, with total assets of US$27 billion, is the biggest Nigerian bank in terms of Tier 1 capital and shareholders’ funds.
The bank has subsidiaries in the UK, Ghana, Sierra Leone, The Gambia and representative offices in South Africa and China, and a customer base of over two million. The bank has in 23 years emerged as a financial powerhouse with its excellent performance on all parameters, consistently attracting commendations at home and internationally.
In 2012, the bank was named the “Best Bank in Corporate Governance” by World Finance and one of the “20 Global Super Brands” by FTSE Global Markets.
Source: This Day Live