Prime Business AfricaJim Ovia, the chairman of Zenith Bank, has made a whopping N26.88 billion through his investment in the financial institution in 2024, following a 13.01 percent increase in the company’s share price. This significant gain is a testament to the bank’s strong performance and Ovia’s shrewd investment acumen. But what does this mean for the future of Zenith Bank and Ovia’s business empire? Let’s take a closer look.
An analysis of his investment in Zenith Bank, in 2024 shows that Ovia held 5.08 billion shares in the lender, comprising 3.55 billion direct shares and 1.52 billion indirect shares.
Join our WhatsApp ChannelOvia holds the indirect shares through investment companies: Lurot Burca Ltd, Jovis Nigeria Ltd, Veritas Registars Ltd, and Quantum Zenith Securities Ltd.
The value of the investment held by the businessman at the start of last year was N206.66 billion, however, Prime Business Africa gathered that it increased by 13.01 percent or N26.88 billion to N233.55 billion by the end of the reviewed period.
The increase in Ovia’s investment value was driven by moderate demand for Zenith Bank’s shares in the Nigerian stock exchange, as the company’s share price moved marginally from N40.66 on January 1 to N45.95 on December 31 last year.
However, the gain Ovia recorded is lower compared to the N74,46 billion the investment mogul got in 2023, when the company’s share rose by 61.04 percent, from N24 to N38.65 – pushing the chairman’s investment value from N121.98 billion to N196.45 billion.
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Further analysis showed that aside from the N26.88 billion Ovia made from the appreciation recorded by Zenith Bank’s share value last year, the financial expert also received N25.41 billion as dividends for the period.
At the end of the reviewed period, Ovia held a 12.37 percent stake in Zenith Bank, which has a market valuation of N1.88 trillion, compared to the N1.66 trillion recorded at the beginning of 2024.
Mr Rasaq Abiola, a financial sector analyst who is knowledgeable about investment and the processes, told Prime Business Africa that “Mr. Jim Ovia, as the founder and core shareholder of Zenith Bank does not actively trade his shares in the bank, so as much as the rise in the valuation of the bank is positive for his networth and perhaps ability to leverage his ownership in Zenith Bank to deepen his investments in other sectors, the gains are absolutely unrealized.”
He argued that the soaring valuation of the bank is supportive of the investment appetite for both core and non-core shareholders of the bank and indeed the general investing public.
“Notably, the stock, like most other lenders listed on the Nigerian Exchange, remains undervalued as it continues to trade at significant discount to its book value.”
The undervaluation of Nigerian banks’ stocks is particularly obvious when benchmarked to peers in other Frontier and Emerging Markets. All basic valuation metrics, including the price-to-earnings, price -to-book value as well as the ratio of P/BV to RoE remain below historical and cross-sectional levels.
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