Zenith bank head quarters

Tier one lender, Zenith Bank Plc may have some explaining to do, as reports indicate the Group Managing Director of Zenith Bank Plc, Peter Amangbo was picked up by the Economic and Financial Crimes Commission (EFCC).

Some other media have declined to specify the name of the bank but essentially carried the same details. The bank is yet to issue a statement pertaining to the issue.

What could be behind the action?

The bank appears to have failed to flag some large cash withdrawals carried out by officials of the Rivers State government. The EFCC has alleged these transactions amount to N117 billion and were carried out over the last three years. Banks by law are mandated to flag such transactions.

Implications

Bank executives being picked up in the country is not a new event. Nnamdi Okonkwo, Managing Director of Fidelity Bank Plc, was in April last year picked up by the EFCC pertaining to funds released by the then Minister of State for Petroleum Resources, Dieziani Allison Madueke. Access Bank MD Herbert Wigwe was also briefly interrogated by the EFCC in May last year.

Zenith Bank has two Deputy Managing Directors (DMDs) which will enable operations to continue smoothly.

The news, however, could lead to a drop in the bank’s share price as foreign investors are finicky about matters like this. Zenith is one of the stocks largely favoured by foreign investors due to its liquidity.

Zenith Bank is currently trading at N21.95 in today’s trading session on the Nigerian Stock Exchange (NSE).

Results for the Half year ended June 2018 show Gross Earnings dropped from N380 billion in 2017 to N322 billion in 2018. Profit before tax increased from N92 billion in 2017 to N107 billion in 2018. Profit after tax rose from N75 billion in 2017 to N81 billion in 2018.

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com

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