By Jeph Ajobaju, Chief Copy Editor
Jim Ovia is in pole position to earn N9.575 billion in dividend for the financial year ended December 2020 from Zenith Bank, Nigeria’s most profitable bank he founded in 1990, of which he is now chairman.
He is the single majority shareholder of Zenith Bank, directly owning 3,546,199,395 units out of the 31,396,493,787 ordinary shares, which gives him an 11.29 per cent direct interest in the Tier -1 bank.
Nairametrics adds, however, that such a dividend is subject to a 10 per cent withholding tax.
The board of directors of the bank in a statement released via the Nigerian Stock Exchange (NSE) proposed a final dividend of N2.70 which means a total payout of N3.00 per share for the financial year 2020 (interim: N0.30).
This proposal reflects the past year’s robust performance and signals that Zenith Bank remains well-positioned to perform in the current financial year. However, there was a lower payout ratio at 40.9 per cent compared to FY 2019 (42.1 per cent).
Key earnings drivers to the 2020 financial year performance were a 90 basis points drop in the cost of funds to 2.1 per cent, which propelled net interest income (+12.2per cent YoY) and a 3.8x jump in revaluation gains to N43.4 billion.
These offset pressures from operating costs (the cost to income ratio rose 1.2ppts to 50.0 per cent) and impairment charges (cost of risk rose 40basis points to 1.5 per cent).
Ovia, described by Forbes Africa as the ‘Godfather of banking in Nigeria’, is quite popular for his business dexterity and leadership skills, especially in the banking sector, per Nairametrics.
His early interest in technology was the reason Zenith Bank became the first Nigerian company to have a functional website in 1995 and was able to smoothly migrate its operations from analog to digital.
From a single branch in a residential building, the bank now has hundreds of branches all over Nigeria and several subsidiaries overseas.
Zenith Bank became a public limited company in 2001 and was listed on the NSE, and later on the London Stock Exchange (LSE).
On April 27, 2007, Zenith Bank became the first Nigerian bank in 25 years to be licensed by the UK Financial Services Authority (FSA), giving rise to Zenith Bank UK Limited.
Zenith Bank declares final dividend of N84.8 billion
On Tuesday, the board of directors announced the payment of a final dividend of N2.70 for every share of 50k held by shareholders, amounting to N84.8 billion for the year ended 2020.
A disclosure the company’s secretary, Michael Etu, sent to the NSE showed that the final dividend will be paid electronically to shareholders on March 16 subject to withholding tax and approval from the bank’s Annual General Meeting (AGM).
Other pre-requisite conditions for payment are:
· Only shareholders whose names appear in the registrar of members as of the close of business on March 8, 2021 will be considered.
· Shareholders must have completed the e-dividend registration and mandated the registrar (Veritas Registrar Limited) to pay their dividends directly into their bank accounts.
· The register of shareholders will be closed on March 9, 2021.
Zenith Bank had earlier paid an interim dividend of 30k to shareholders on September 22, 2020, raising total dividend declared in 2020 to N3.00 or about 7.1 per cent rise compared to N2.80 dividend declared in 2019.
The bank reported a Profit Before Tax of N255.9 billion for FY 2020, a growth of 5.2 per cent YoY.
It posted a Profit After Tax figure of N230.6 billion or 10.4 per cent growth YoY.
It has total shares outstanding of 31,396,493,787 and closed trading on February 23 with a share price of N26.
