Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Nairalytics
    • Macro-Economic News
    • Research Analysis
    • Budget
    • Public Debt
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Nairalytics
    • Macro-Economic News
    • Research Analysis
    • Budget
    • Public Debt
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
No Result
View All Result
Nairametrics
No Result
View All Result
Home Industries Company News

Zenith Bank Shares Tank After Earnings Call “Blunder” 

Ugodre Obi-chukwubyUgodre Obi-chukwu
6 years ago
in Company News
Share on FacebookShare on TwitterShare on Linkedin

Nairametrics| Shares of Zenith Bank Plc took a major pounding after releasing impressive 2016 FY results. The bank had reported an impressive profit after tax of about N129. 6 billion, 26% higher than its 2015 results. 

This is the highest profit ever reported by a Nigerian Bank according to our records. The bank also proposed a final dividend of 177 kobo per share. 

All seemed well and good until the share price tanked. 

Why share price dropped? 

The bank followed up the results with an earnings call on Tuesday that apparently did not go down well with investors. According to our contributory analysts who listened in on the earnings call, the bank may have spooked investors after it mentioned plans to raise additional capital. 

Investors are weary of banks requiring capital raise for two main reasons. Firstly, they believe it is indicative that things may not be all that good with the banks capital adequacy ratios, a sign that more impairments are likely this year. The bank already took a N30billion impairment on power sector loans in 2016 and as things stand, could take another N50 billion  hit. It also took a N10 billion provision on oil and gas loans. 

Secondly, raising equity capital will dilute shareholdings thus reducing the company’s earnings per share in the short to medium term. This means share price looks more likely to fall further than rise ahead of any capital raise. 

One analysts wondered why Zenith Bank will be raising capital after declaring dividends that could cost the bank over N50 billion this year alone. 

Most quoted companies are thought to have massive plans to raise capital this year to create buffers against rising risk assets and cost of doing businesses. 

 

Related

Tags: 2016 FY ResultsANALYSISOIl and Gas NewsPower SectorZenith Bank News

Leave a Reply Cancel reply

HFM
Mega Millions
Mega Millions
Standard
Patricia





NM newsletters

Business News | Stock Market | Money Market | Cryptos | Financial Literacy | SME |

Recent News

  • Emefiele replies Kano State Governor, says he doesn’t understand connection between cash swap and security issue
  • 9 people including children killed as container falls on a bus at Ojuelegba, Lagos
  • Currency Swap Deadline: CPPE says 10-day extension is inadequate

Follow us on social media:

Recent News

Emefiele replies Kano State Governor, says he doesn’t understand relationship between naira redesign and security issues

Emefiele replies Kano State Governor, says he doesn’t understand connection between cash swap and security issue

January 29, 2023
9 people including children killed as container falls on a bus at Ojuelegba, Lagos

9 people including children killed as container falls on a bus at Ojuelegba, Lagos

January 29, 2023
  • Home
  • Exclusives
  • Markets
  • Industries
  • Economy
  • Business News
  • Financial Literacy
  • Lifestyle
  • Opinions

© 2023 Nairametrics

No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Industries
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Tech News
  • Economy
    • Nairalytics
    • Macro-Economic News
    • Research Analysis
    • Budget
    • Public Debt
  • Business News
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds

© 2023 Nairametrics