Zenith Bank Value Surges After Interim Dividend Notice, YTD Return Rises
Yinka Olajoyetan, Lagos
Zenith Bank Plc fired up in the equity segment of the Nigerian Exchange after its board of directors increased interim dividends by 25% when others are cutting back.
Trading data from the Nigerian Exchange showed that the financial services group’s market value expanded by N240.258 billion after its half-year earnings releases and proposed interim dividend payment to shareholders.
Its share price surged to N69.85 on the Nigerian Exchange as 38.966 million units of Zenith Bank valued at N2.723 billion were traded on Friday – resulting in 56% year-to-date return.
The price appreciation of more than 9% week on week lifted the market value of Zenith Bank’s 41.069 billion shares outstanding to N2.868 trillion.
With one of the best in-class year-to-date returns of about 56%, Zenith Bank remains attractive, with a potential upside estimate range between 18% and 41.70% from Atlass Portfolio Limited and Afrinvest Securities Limited.
In a corporate action, the bank announced a plan to pay N1.25 per share to its shareholders on October 10, a week after its qualification date expires.
With expectations that the bank will deliver on its earnings target, equity analysts have raised their respective target prices for the bank ahead of the third quarter of 2025 earnings release.
Unlike its immediate rivals, the bank increased its interim dividends by 25% amidst tight conditions set by the Central Bank, reflecting confidence in its earnings outlook.
NGX trading data revealed that Zenith Bank’s market value increased by 9.14% week on week over rallies that were fueled by its N1.25 interim dividends.
Its significant trading volume reflects investors’ positive sentiment about the bank’s ability to deliver on its promise to boost shareholders despite its profitability slide – due to the decision to exit Central Bank forename.
The rally lifted Zenith Bank’s share price to N69.85 from N64 – reversing previous sell-offs. Its regulatory-induced late earnings release had stoked negative sentiment that left investors with no choice but to trim their holdings.
Following the scrutiny, Zenith Bank has the highest interim dividends despite a slide in net income—reflecting a rock-solid financial position by the cash-rich lender.
After Zenith Bank beats previous target price of N42.90, Afrinvest Securities Limited estimated 41.7% upside potential for Zenith Bank shareholders at the reference price of N68.
