The Nigerian multimillionaire and businessman Jim Ovia (pictured) will receive in the coming days, a pre-tax income of about N12.64 billion (about $34.5 million). Less known abroad than his compatriots Aliko Dangote and Tony Elumelu, he owns 5.1 billion common shares in Zenith Bank, one of Nigeria's biggest banking groups, which he founded in 1990 and chairs.

The Board of the bank has recently proposed that shareholders should receive for 2019, an extra dividend of N2.5 per share by March 23, 2020. In addition to the N0.3 per share received for the same financial year, the pre-tax benefit for the bank’s CEO now stands at N14.2 billion ($39.2 million).

The total shares held by Jim Ovia in his bank were valued at $180.1 million as of March 10, 2020, the deadline for receiving the dividends. This means that the amount he will now take represents a 19.16% return, well above investments in long term Nigerian government bonds.

However, in addition to this actual gain, Zenith Bank shares posted a potential loss of 47.7% between the beginning of 2019 and March 11, 2020, of which a large part (-41.2%) was conceded from March 6. Investors have certainly reacted to the decline in oil prices around the world. Fears of a price crash have been confirmed, with possible impacts on the oil sector and the government. According to the 2019 annual report, these two customer profiles account for 40.63% of the outstanding loans granted by the banking group.

Apart from Jim Ovia, 11 other executives of Zenith Bank who jointly own 184.5 million shares in the institution’s capital, will receive a dividend of N463.5 million. Data available on the Capital IQ platform indicates that 56 African and non-African investment funds with nearly 4.6 billion shares in the bank will receive a total dividend of N11.7 billion.

The Nigerian financial group remains on solid fundamentals, but for investors adjusting their financial performance in US dollars, 2019 was a mixed year. Net banking income improved by 3.7% at the end of the year. This is the smallest increase in the last three years, after +27.6% in 2017 and +8.9% in 2018.

Idriss Linge