By Jeph Ajobaju, Chief Copy Editor
Tony Elumelu, United Bank for Africa (UBA) chairman, is on the cusp of earning N1.24 billion in dividend for the financial year ended December 2020.
He acquired Standard Trust Bank in 2005 and in that year merged it with UBA and became the managing director/chief executive officer of UBA, in which he owns the majority shares.
He retired as MD/CEO in 2010 and returned as board chairman in 2014.
Elumelu is the second banker reported to be angling for a jumbo pay in FY 2020; the first being Jim Ovia, who is set to earn N9.575 billion from Zenith Bank, Nigeria’s most profitable bank he founded in 1990, of which he is now chairman.
Elumelu owns 194,699,555 direct shares in UBA and 2,185,394,184 indirect stakes through three other companies – Heirs Holdings, Heirs Alliance, and HH Capital Limited.
This puts his total equity holdings at 2,380,603,739 out of the 34,199,421,368 ordinary shares available, giving him a collective 6.96 per cent interest in UBA.
On Monday, the UBA board of directors proposed a final dividend of N0.35 per share, in addition to an interim dividend of N0.17 per share already disbursed. This takes the total dividend for the year to N0.53 per share.
Nairametrics reports that computation of Elumelu’s dividend per share and shares (direct and indirect) shows he will receive a gross dividend of N1,237,913,944.28 for FY 2020, subject to 10 per cent withholding tax.
Elumelu was named in TIME 100 most influential people in the world in 2020, and he is well known for his business acumen, astuteness and philanthropy, part of which led to his establishment of the Tony Elumelu Foundation in 2010.
UBA FY 2020 results
UBA had earlier released its audited FY 2020 results showing a profit after tax of N113.77 billion. (+27.7 per cent YoY).
The proposed dividend will be approved by shareholders of the bank at an annual general meeting on April 1.
Jim Ovia’s N9.575 billion dividend
Ovia is also 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.
However the dividend is subject to a 10 per cent withholding tax.
The board of directors of Zenith Bank proposed a final dividend of N2.70 which means a total payout of N3.00 per share for FY 2020 (interim: N0.30). There is, however, a lower payout ratio at 40.9 per cent compared to FY 2019 (42.1 per cent).
Key earnings drivers to FY 2020 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, it 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.
The board of directors announced on February 23, 2021 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.
Zenith Bank had 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.