The shares of Zenith Bank Plc soared N2.45 each or 5.32% on Wednesday when it closed at N48.50 each from Tuesday’s N46.05 per share in apparent investor reaction to the assurance by its board that the bank is on the verge of exiting the forbearance it currently enjoys from the Central Bank of Nigeria (CBN) as part of tightening oversight for banks with outstanding forbearance-related loans or breaches of the Single Obligor Limit (SOL).
Recall that the recent directive of the CBN barring banks in the country still enjoying some form of regulatory forbearance from paying dividend, engaging in executive compensation or investing in offshore subsidiaries, has continued to unsettle the equity market, given than those mostly affected are those from which they enjoy interim dividend at the end of half-year.
The growth in Zenith Bank Plc shares followed its midweek assurance that it will be off the forbearance window by the end of this month, and theefroe be able to pay the interim dividend as usual at the end of half-year ended June 30, 2025 due to the CBN directive.
Zenith Bank Plc, Nigeria’s biggest bank by Tier-1 Capital, in a statement to the NGX, stated that its exposure under the Single Obligor Limit (SOL) forbearance relates solely to a single obligor, and that this exposure will be brought within the applicable regulatory limit on or before June 30, 2025.
It also confirmed that the forbearance granted on other credit facilities applies to only two of its customers, noting that it has made substantial provisions in respect of these facilities and taken appropriate and comprehensive steps to ensure full provisioning by June 30, 2025.
In the notification to the NGX by Michael Otu, its company secretary, Zenith Bank said that upon completion of the ongoing efforts, it will no longer be under any forbearance arrangements, and “expects to have exited all CBN forbearance arrangements by the end of the first half of 2025.”
It also recalled the recent successful capital raising exercise that raised its capital base beyond the N500 billion regulatory requirement.
Exposure under the SOL forbearance, the statement added, relates solely to a single obligor, expressing confidence that this exposure will be brought
within the applicable regulatory limit on or before 30 June 2025.
With respect to the forbearance granted on two other credit facilities, the bank said it has made substantial provisions in respect of both customers, assuring that it remains confident of satisfying “all relevant conditions to enable it pay dividend to shareholders in the current year.
