Zenith Bank VS GTBank Public Offer Investment: Which Gives a Better ROI?

[@oluwafemiadegoke5301]

Well, having gone through banks' track records on strong liquidity, capital base and goodwill, coupled with the records of highest Return on Investment (Dividend), as an Investor, I will go for Zenith Bank.

[@EzekielOluwafemiBabajide]

This is probably the best woman on my KZbin... I just have to subscribe, you are doing well madam.

[@eastgatetelevision]

During recapitalisation bank. Banks need to show that that have a liquidity of 500 billion, but the money is not meant to be deposited to the central bank. Rather the money will be channel to several investments that are fully audited and evidence. It has to be a positive invest

[@afrocraft1]

Good stuff, thanks. I would caution that banks are usually valued a little differently than regular operating companies (like a brewery). _Price-to-book,_ rather than price-to-earnings, is the preferred metric for comparing bank performance. It's the P/B value, _not_ the P/E, that you want to be close to 1.

[@danielikhayere4391]

This capitalization is geared towards increasing shareholders funds (equity) and it can be utilized in the business (building branches, improving technology and other infrastructure etc. However, the cash banks present to CBN is usually about 45% of their total customer's deposits which is known as Cash Reserve Ratio.

[@FloFinance]

Oh, ok. Thanks.

[@afrocraft1]

@@FloFinance That means the banks can do whatever they want with the equity -- just like any non-bank company that has raised capital through an initial public offer, a secondary offer, or a rights issue (like this one is). It's their shareholder's funds, after all. It's not money that is just banked at CBN. CBN wants big banks that put a large amount of shareholder's funds at risk (hopefully by longer term lending, dealmaking to productive ventures, like real estate, infrastructure, etc.) in order to grow the national economy.

[@FloFinance]

@@afrocraft1 my own is: if they can spend it on infrastructure BEFORE the consolidation deadline, these big banks already have infrastructure worth more than these amounts. Some have infrastructure that runs in trillions hence do not need to raise more money to prove their strength to CBN. You get where I'm coming from?

[@afrocraft1]

@@FloFinance I feel you. Honestly, I wouldn't put much stock in what they say they'll do with the money. They're under no legal obligation to follow through with that. It's equity. More likely, they'll use the excess equity for investments in Treasuries and bonds, liquid stocks, or captive infrastructure projects (like toll roads). So there'll be a gold rush for yield post-capitalization, as banks try to get return on billions in new equity. That's good for the broader economy -- interest rates will go down -- but that's why I'm nervous about investing in banks now. Their return on shareholders funds will collapse.

[@muritalaakande69]

Kudos to you for saying it the way it, more wisdom and knowledge.

[@adeyinkaadeniyi4833]

Ma'am, thanks for bringing this out to a lay man's level as mine. You've made me so set to buy into Nigerian shares now .

[@EmekaAmuta]

Thanks for that very important opening guide every trader knows - buy when price is low, sell when price is high.

[@kachie_88]

I just stormed on this video as I was contemplating about the recent public offers by different banks. Thank you for the simple explanations & vivid illustrations on how to make decisions on the shares to buy. As a first time investor with this few knowledge, I would go for Zenith bank shares because they are among the Tier 1 banks, they pay dividends consistently & there is every tendency that their share price can appreciate in the future. The P/E ratio for zenith bank is also an indication that their share price is fair enough to buy compared to GTbank. Thank you Flo for your analysis. Gained a new subscriber

[@FloFinance]

This your summary is top notch. And you say you are a first timer? No way! 👏👏👏

[@kachie_88]

Lolz. Thanks for the compliments. Although I have a background in accounting but a newbie in investing 😋

[@olayinka982]

I wish I saw this before buying gtbank shares from this recent public offering. Thanks for the detailed analysis.

[@ibkvids4595]

Maybe GTB already have a liquidity amount close to 400B and that's why they only needed 99B for the new central bank liqidity requirement. And just using the public offer as means to also raised money for other investments they want to Branch into, which would indicate that compared to other banks they have always been at the top end of banks that has good liquidity profile at least before the new central bank requirements..

[@FloFinance]

Is it me that did not understand this comment? GTBank is actually the one aiming to generate 400B (the most money in this public offer biz) from their public offer. Zenith bank is aiming for 290 Billion from the combined rights issue (190B) and public offer (99B). Access: 351B, Fidelity: 127B and FCMB 110B. So if it's by the amount of money they are trying to raise, GTBank is the illiquid one.

[@chesilmusic2940]

My sister, whilst I praise you for bringing the financial awareness to our people, I would also like to make some remarks. Firstly, how can you make a comparison of 2 companies without talking about their market cap, enterprise value, free cash flow, their revenue etc? Share price for value investors doesn't really say much, because news follow the stock price. With regards to dividends, while it's a nice thing to have, you did not include the current share price during the dividend calculation, you did based on the price purchased. We all know that using FCF to pay dividends and upto 40% of it in dividends is not good for the investor. Apart from it's tax inefficiency, companies should invest their FCF and also buy back shares. That adds better value to investors rather than paying dividends. Maybe we should do a live video on investment. But I appreciate the efforts you put into creating these contents, God bless you.

[@FloFinance]

@@chesilmusic2940 ok, is this your answer to my question about what you consider? Well, I don't consider any of those because they don't concern me. Those are numbers that a company uses to brag, the board members should worry about those numbers because their job is to keep the company profitable for investors. I don't think you are an investor because your comment sounds like what a company owner will write. I am an investor so my own is, how much is in my pocket? If you watch a few of my videos you will know that I invest only for dividends, not just any dividends ooo, GOOD dividends! This is why I can sleep well at night knowing that if I wake up tomorrow and that company has gone under, I will be consoled by all the dividends I have been chopping. No company has my umblical cord so any day they start falling, I sell my shares and japa. These days that other instruments are paying higher, shares are no longer even worth it to be honest. Na to sell at this peak share prices and take my money to bonds or something. For my calculation, I use the average price for the year in question because that's the amount of your money in that company for that year. Assuming you sold your shares that year, the share price for that day/period/year will be used to calculate how much you will get after selling. I don't care about companies reinvesting ALL their profits, no be my papa get the company. Just give me my share of the profits, reinvest some and keep the rest. The company will not go down. See Zenith and GTBank that have been paying 40% dividends payout ratio for years, they still stand gidigba. Abeg ooo, I am not in the board of any company. You will be there telling them to reinvest your share of the profits while the CEO and top directors are chopping huge bonuses every year. E pelee ooo Father Christmas 😂, all these companies would be happy to have you as an investor wey no dey like chop dividends. And lastly, no be only me go dey do the work here ooo. You too, upload videos of your own analysis let's come and watch for the fun of it. Nobody dey invest with another pesin moni. As long as we are all achieving our investment goals, there's no wrong answer. 😆😅

[@joshuarowland3169]

I love this reply, automatic subscription to this channel​@@FloFinance

[@eduukemenam1556]

Great video. Big up to you. You need to write a book titled: stock investing for dummies. The breakdown is so easy to understand.

[@FloFinance]

😂 Edu abeg ooo. Thank you, glad you found it easy to understand.

[@James_150]

One thing I did with all these shares being sold currently is i bought 20k units from 3 banks. I am a novice when it comes to investing in stocks so I just invested what I know won’t hurt me if anything goes wrong

[@jackedosa6740]

First time I discovered this channel. Flo. I thought you only did building houses. One love from Denmark

[@FloFinance]

😆😂😅 This channel started with investing in paper instruments. Building houses was just a chance content on this channel because I was supervising the building of our house in the village and decided to share it and it attracted lots of people that want to build.

[@user-dj9zm1fd6d]

Just watched 4 videos and am understanding shares, wow bless you. You just earn a subscribe! #OT

[@samuelakpan103]

@Flo you’re doing well. Thanks for this update.

[@effiongjackson4820]

Thank you Flo for the insight.

[@Bibi_Taiwo]

Thanks for this Flo. Please can you compare Zenith bank to Acces bank

[@annamariaskin8531]

Brain box Thank you for your update

[@ethelokonkwo7943]

Thank you for this update. You have helped me make some decisions

[@blessingchidimma5038]

Loving this channel and May God give you strength as you keep giving it to us back to back.

[@agunloyeoke9842]

I like the way you break down the comparison, thank you Ma

[@akahibekingsley4316]

Why they have items like technology and infrastructure is because, these banks already have capital with the CBN but it's not up to 500 billion. So a percentage of the capital raised will be used to increase their deposit to N500bn, then the rest will be used for other things.

[@FloFinance]

That's good to know. Thank you.

[@ibawon]

Got the 2

[@babsola6509]

Madam Flo, there is no confusion on having cash and using the cash for infrastructure etc. Typical steps for bank raising funds via rights/offer are Step 1: Investors buy your shares Step 2: CBN verifies the purchases to ensure they meet the regulatory requirements Once approved by CBN, SEC approves for listing of the additional shares. Bank now has the cash to use (CBN is not holding on to the money. Money raised is not for bank license purchase but to give them capacity to meet their obligations). Step 3: This is where the usage of the cash comes in and that's where the branch expansion, upgrade of IT infrastructure, International expansion etc come in. Hope this is clearer?

[@yourmoneyfriendfadekemi]

Hmm this makes sense

[@emmanuelumukoro7986]

You're right

[@maryannosigwe3553]

Very correct

[@FloFinance]

Ok, that verification answers my question. At least their papa CBN must see and confirm the money before they spend it. Thanks.

[@olumideadejoro795]

You are doing well

[@oneaudience1545]

Please, Flo do a video about FCMB as well. Thanks for all you do.

[@omajonathan9928]

Very clear and educative. I subscribed and liked. Nice work. Thanks a lot for the headsUp.

[@ezonbodortarike-eyi566]

Thank you for the information

[@Sunmademicheal]

You did a very good analysis. God bless you ma'am

[@deleakinseye]

Thanks for sharing this knowledge

[@TheFPLManual]

Thanks for this analysis, Flo. Very insightful

[@enebechioliver3761]

Very informative and enlightning

[@E.M1.12-w3c]

A big thAnk you 🙂✌..

[@Allofndueso]

You are simply a genius

[@joyajim]

The speed with which I clicked on this eh 😂 Been waiting to hear your take on Zenith...the "selense bank"

[@FloFinance]

Their selense no be today. 😂

[@johannaaguh4438]

Thank you so much for this analysis. I pay more attention to investment deals thanks to you. I am also a lover of passive income but a baby investor 🙂

[@FloFinance]

hehehe the young shall grow. 👍

[@jnn8551]

Nice breakdown as always….may God bless you for doing this!

[@samuelani8754]

Very Educative

[@kehindeadetiloye2221]

Flo, to answer your question on where the capital raised goes and how banks use their new capitalisation funds, you have read where each of them chooses to put the incoming money. But let me explain more: 1. Banks obtain money from subscribers to their shares and the money becomes assets in the bank balances 2. These balances are used to invest in any profitable project that would bring them more money. 3. Banks only have to deposit the money from their shares to the CBN when they are starting new. 4. This is why banks are always awash with money and are ready to undertake riskier projects immediately they acquire new long-term capital which they can risk on projects that they would otherwise not have attempted. Don’t forget that riskier investments bring more returns, but losses are not uncommon. You only need to appraise well and mitigate possible risks. 5. The capital adequacy ratios of Basel III are stringent and they restrict the banks in their use of depositors' funds in their lending activities.

[@FloFinance]

Thank you so much for breaking it down.

[@praiselawrence4390]

Pls when will ZENITH bank sell out shares

[@francisamos8650]

To be able to know in which one to invest in, it is important to know the percentage of earning in their annual report. So what is % of their earning last year in the annual report?

[@ambroseutin2729]

I see a very good university professor of Banking and Finance/qualitative Analysis

[@FloFinance]

🤣🤣🤣 There's no job title you all will not give me on this channel.

[@omninspire]

Amazing video

[@magajiyahaya9898]

you re doing a good madam flo this is my first time watching your video's

[@igbokepaschal1490]

I've been watching your videos for a couple of days now, and all I can say is thank you for the analysis... You just got yourself a follower.

[@drpraxistv4284]

Don't just buy when low but 50% low to make money. Also consider fees, PE value, the health & balance of the company,, ... Do technical analysis

[@adedamolaadesina2215]

Very well explained and educative. Thank you Flo for this great piece 🙌🏼💯

[@nwachukwuchukwuebuka5933]

Recapitalisation is an accounting tool. CBN needs to see fully paid up share capital of N500B for international license and N200B for national license. So after the issue of shares, the balance sheet will have share capital increase up to or more than the recapitalisation minimum threshold. On the other side of the balance sheet, the asset will increase as well. Initially as cash and subsequently as perhaps non-currrent assets (building, renovations/building improvements, computers and software, etc). Changes from one asset class to another happen on one side of the balance sheet. The value of share capital is preserved on the other side of the balance sheet, so really .....the balance sheet is recapitalized regardless of ultimate use of proceeds of sale of shares (of course where we assume the usage will not incure losses that will wipe off capital).

[@agoiobunso]

Very informative video thank you

[@Sanussyyy]

Someone should pls help me explain a few things about these public offer: 1. How much do I stand to gain monthly or annually? 2. What are the risks involved? 3. If I decide to sell all my shares at any point in time, am I allowed to do so?

[@Sewwithsylvia]

Pls where do u buy share

[@feeldennis]

Very informative, thank you. Simple to understand straight forward and informative to follow up with more research on my end. Good stuff, I will share with friends for educational purposes. Thanks 🙏

[@charlesezechiedo8826]

Please be informed Flo, Zenith bank Facts Behind the Offer presentation holds on 12/08/24

[@FloFinance]

They should clap for themselves. A whole 12 days after their public offer went live?

[@goc4eva]

@@FloFinancethe plan was to do this earlier but for the Endhunger protest nationwide

[@chudiksc]

Gtb I will invest

[@muritalaakande69]

I don't have confidence in Nigerian banks' shares. I prefer mutual funds or investment into bonds to buying shares. The reports am hearing from previous subscribers of banks' shares is not convincing at all .

[@augustineopara2887]

Thank you so much. I just subscribed and I will take time to see your other videos to be informed more. Thank you so much for what you are doing. I will go for GTB because I have accounts with them and could do it electronically without a stockbroker. I love Zenith but I have not done anything with them before. So what do you think is my reason good enough, from your analysis and experience? Please don't tell me that you are not my professional adviser🤦‍♂️🤦‍♂️🤦‍♂️🤦‍♂️

[@chesilmusic2940]

Whist i am glad that you are preaching the need for people to consider investing, it is also good to include important aspects. How can you compare two companies without mentioning the market cap, enterprise value, free cash flow, revenue, return on invested capital etc. Dividend is the last thing companies use do with theor free cash flow. Please look more into the fundamentals analysis.

[@FloFinance]

The best thing would be for you to make that video that I have failed woefully at making, don't you think? Please do so because all the work of spreading financial education can't rest on poor me's shoulders.

[@MrAypumpin]

@@FloFinance maybe the man na gtb person. I will go for Zenith any day

[@okorojnr]

Zenith is clear. GTCO is a smaller bank in terms of Assets, and shareholders fund.

[@beatriceyilian1106]

Okay what those of us that invested in shares before, what happens now,i did with zenith

[@Lumixeddy]

I already went for zenith bank shares .... Its my bank we win together

[@abelgonsum9774]

Kudos, Great job on the investment analysis! Your thorough breakdown and empirical insights are really helpful. Thanks for sharing your knowledge and helping potential investors make a more informed decision!

[@abelgonsum9774]

Make I also drop my 2 kobo like a hot single! Abeg, add 'Total Returns' column for us price appreciation gangstars and traders extraordinaire! No be only dividend you dey chase, passive investor like you wey dey chill like a bottle of cold Stout!"😂😂

[@FloFinance]

Thank you! All these for me? Even though I did not mention appreciation? 😂🤣😂 Appreciation master! See eh, why I don't mention appreciation is because we are talking about EARNINGS. Until you sell, appreciation does not put money into your pocket. Please inform me when you sell your shares of a company with profit then I will happily add the profit to your earnings. Chai ooo!

[@blessok77]

Please it's any platform that oneTrade these Nigerian stuff without going through a broker.thank you

[@abelgonsum9774]

@@blessok77 You would be able to buy directly from NGX website but you will still need to regularised with a stockbroker. So I would suggest you stick to stockbrokers that have easy to use apps like that of Afrinvest

[@oladotunakinbani8028]

It's to meet up with CBN's stipulated minimum 'Share Capital' requirements. Investors investment in these public offer or rights issues leading increases in share capital on one side of the balance sheet and cash on the other side. CBN's focus is the credit side being share capital....debit side (asset) is better kept as non liquid asset thus investee disclosing plans for proceeds. I share your concerns about brick and mortar in this day an age 😅. Thanks for the excellent analysis ma'am

[@olugbengaomotosho2408]

Have you invested in any shares lately?

[@owoichojimoh6405]

I would rather invest my money in Zenith bank.

[@goldencoast8896]

Why say so?? could you explain because I was considering in investing in Nigerian companies

[@isaacchibuike1541]

I would prefer to buy from the secondary market.

[@emmanuelumukoro7986]

Banks raising finance through public offer and right issues is to increase their capital base. This is to ensure they have enough funds to run in this present economy and not to deposit with CBN. Thank you Flo for the videos, it's keeping us informed. Zenith bank all the way🥂.

[@FloFinance]

Oh ok thanks. I used to think they would keep the money with CBN till the 2026 deadline after which they can do with it whatever they will. But I saw Zenith's timetable and they will start spending some of the money within one year.

[@olufunkeheritage7915]

@madam flo. Thank you so much for the insights you give us per time on shares. Pls can you do the dividend yield of first bank for 5 years

[@FloFinance]

We are waiting for them to officially announce their own public offer.

[@mrlolomari]

Madam, you're officially my financial gist updater .. 😂

[@FloFinance]

😂😂😂 I'll take any title that is not "advisor" hehehe

[@mrlolomari]

@@FloFinance lols... I intentionally avoided that word

[@FloFinance]

@@mrlolomari you no chop your school fees. 😂🙌

[@grandxanadu]

Though they don't literally submit the money to CBN but CBN must see and verify it before they spend it on those things.

[@Feedbackorg]

Infrastructure is counted ooo

[@awemosesakorede7705]

I can't find the Link to your books

[@tushlorhd6196]

I wanna invest in Zenith bank,why because thier selling price isn't high amd they a

[@kennethojeke5119]

Nice work, what about the share appreciation of both banks

[@FloFinance]

I don't consider that because it is not earnings. Appreciation can only be considered as earnings when the shareholder sells the shares and makes money. So till we sell, counting appreciation is like counting chickens before they are hatched. 😊

[@kennethojeke5119]

@@FloFinance For me i look at stock appreciation, example Apple does not give out dividend, but their stock is one of the best .....

[@FloFinance]

@@kennethojeke5119 so how do you make money from it?

[@abelgonsum9774]

​@@FloFinance Me, newbie 'tradvestor' wants to buy this question🤣. Well, I'll sell it to you at an all-time high price... just kidding! 🤑 But seriously, you're absolutely right! As a 'guruvestor' (cough, cough), you know that riding the stock market rollercoaster requires a strong stomach and a keen eye for dips and peaks. So, go ahead and take profits when it's high, and buy more when it's low... just don't forget to buckle up! 🎠💰

[@FloFinance]

​@abelgonsum9774 I don't know why his second comment is not showing here. He wrote that he invested in Apple which does not pay dividends at all. So I asked how he makes money from that investment.

[@denisadamu3436]

Where is the link for the e book

[@sanyaolugbuyi2868]

How can someone invest in zenith bank any response please

[@ajetunmobiabdulkareem6250]

Zenithbank fact and figures now available on KZbin

[@EmekaAmuta]

Just subscribed

[@henryamadi8727]

How do I buy shares from the US ?

[@empresskofoworola]

Well done Madam pls my name is showing up on the unclaimed dividend website. What do I do ? I have filled in all the requirements requested by sec, yet my name is still showing up

[@FloFinance]

Watch this video: kzbin.info/www/bejne/jHqcdX2iobKnl5I from start to finish for answers to your question.

[@illwillbeats]

Can I get a rundown of the books in the shelf behind you

[@FloFinance]

I will make a video.

[@angelUE23]

They just didn't drop their shares in the market. You can search youtube for the videos. It was done live on youtube. I watched it. You're misinforming people biko

[@ChannelHasNoName-pg4pt]

The CBN's deadline for recapitlization is 24months i.e. from 1st April 2024 - 31st March 2026. So I think the banks intend to used the money raised to improve their infrastructure and invest in other businesses, in order to position them to raise the recapitalization fee from profits within the set period. (I guess).

[@cyrusdogun316]

Is the dividend pay yearly or monthly

[@MxMx_Art]

Yearly ohhh

[@McDonaldIbekwe]

@FloFinance do you have a video of how you select stocks to buys?

[@FloFinance]

Yes, watch in this playlist: kzbin.info/www/bejne/f6u2Zppjgr15mrs

[@McDonaldIbekwe]

@@FloFinance Thanks very much.

[@godwinekoja9997]

This bank share that they use to dupe some of us in 2007 to 2010.

[@EMENIKEP]

Without watching, I knew you will tear GTB

[@FloFinance]

🤣🤣🤣 Which kain you knew I will tear them? Emenike see my armpit, no white hair. I am even their shareholder.

[@EMENIKEP]

@@FloFinance hahahaha 😂🤣. Anyways, thanks for all you are doing for us

[@olugbengaomotosho2408]

@@FloFinancehow much can I invest in GTCO shares ? Sis, it’s ending today

[@nomeruth6988]

Zenith bank all the way

[@nomeruth6988]

zeith bank all the way

[@kehindeadetiloye2221]

You did GTB in

[@FloFinance]

I am just analyzing data ooo. No banks were "done in" in the making of this video. 😆

[@kehindeadetiloye2221]

@@FloFinance Yes, I agree you are analysing data - hard data

[@McDonaldIbekwe]

🤣🤣🤣I'm not your financial advice.🤣🤣🤣

[@FloFinance]

At all ooo! I don dey receive queries in my email about my analysis. 😂

[@okochima3853]

Not knowing the meaning of recapitalization and yet you're educating the public...sorry o. You need to be taught yourself.

[@FloFinance]

Still, the only opportunity you had to teach me, you failed woefully at it. Shame, shame shame ... shaaaame!