Queries for Zenith Bank on 2024 dividend pay out, by Yemi Adebowale
More often than not, annual general meetings of Nigerian publicly quoted companies are usually settled in advance, with the majority shareholder(s) controlling such meetings (technically and tactically) to achieve a desired result. That was what played out at the 34th Annual General Meeting of Zenith Bank Plc held in Lagos on Tuesday April 29. The AGM approved the proposed final dividend payment of N4.00 per share, bringing the total dividend for the 2024 financial year to N5.00 per share, with a total value of N195.67 billion. In practical terms, the majority shareholder(s) approved this dividend payment. The “arranged” AGM had no choice but to approve it. Everything was settled long before the AGM. This is the practice in beloved Nigeria.
The founder of the bank, Jim Ovia, said despite challenges globally in 2024, Zenith Bank was able to leverage the opportunities within the environment of each subsidiary to record a performance that solidly attests to the bank’s resilience as a brand. The carefully selected shareholders quickly applauded the total dividend payment. Dr. Faruk Umar, President of the Association of the Rights of Nigerian Shareholders (AARNS), thundered: “We are very happy that the bank is paying us N5.
Mukhtar Mukhtar, Chairman, Trusted Shareholders Association of Nigeria, added: “The consistency of Zenith Bank dividend payout has never been matched in Nigeria. Since the inception of this bank, they have kept giving shareholders a consistent dividend payout, and this has made shareholders to be richer, happier. We are very happy.”
Yes, the N5.00 per share total dividend for the 2024 financial year (with a total value of N195.67 billion) is much higher than the N4.00 per share total dividend payment for the 2023 financial year, with a total value of N125.59 billion. So, the majority shareholder(s) and the “arranged” shareholders, as usual, are celebrating. But the minority shareholders are not too happy. Yes, minority shareholders! This is where you have the largest number of people; thousands of unrepresented shareholders. For these people, the N5.00 per share total dividend is clearly very low in relation to the Profit After Tax of the bank. They have invested and want high returns on investment. They want a higher percentage of the Profit After Tax paid out as dividend.
Let me break it down properly. In the 2024 financial performance, Zenith Bank recorded a Profit Before Tax of around N1.3 trillion. The Profit After Tax should be around N970 billion. The total value of the total dividend payout is N195.67 billion. This means that what was paid out was just about 20 percent of the Profit After Tax. The retained part of the PAT is about N775 billion. As usual, it would be ploughed back into operations. This is too much. I’m talking about the retained earnings on the high side. So, these minority shareholders can’t be celebrating. They want a bigger share of this cherry in 2025.
Why would these unrepresented shareholders be celebrating the sharing of just 20 percent of the PAT? Dividend payout by Zenith Bank in relation to PAT must rise. Shareholders deserve at least 50 percent of the PAT. Jim Ovia can do this. He should just do it in the 2025 financial year. This is what these voiceless shareholders want. GTbank’s total dividend for the 2024 financial year was N8.01 per share. Jim Ovia should take Zenith Bank to this level, and even beyond, in the 2025 financial year.
