In 2004, Central Bank of Nigeria governor Charles Soludo decreed that the minimum capital requirement for banks would rise to N25bn ($183m) – for most banks this was an increase of 12.5 times. The deadline was set for the end of 2005, less than 18 months after the announcement. After much protest, banks realised the governor was not backing down, precipitating a flurry of corporate activity.
Although it is too early to speculate what Nigeria’s banking system will look like once the dust settles, and more particularly which banks will emerge as leaders, the judges noted the pioneering actions of Zenith Bank to go to market with an well-timed IPO, raising N20.3bn from a massively over-subscribed offering. Zenith reported full-year profits of N6.4bn in 2004, up 18% on the year before. It also opened 32 new branches by June this year, while investing heavily in technology. Not content just to focus on the strengthening Nigerian market, Zenith also successfully applied for a banking licence in Ghana, a move that will expose it to the growing integration of the west African region.
“The future prospects of the bank are hinged on the need to maintain our position as a leading financial services provider in Nigeria while expanding our operations internationally. Factors driving this include globalisation, which fuels our customers’ need for cross-border transactions; the integration of the economies of the west African sub-region; and our strategic intent to be the quintessential financial services provider in Nigeria and the sub-region,” says Jim Ovia, MD and CEO of Zenith.
