Zenith Bank Under Fire: Shareholders Slam N15.4 Billion In Penalties Amid Shrinking Returns

Zenith Bank has come under fire as shareholders slammed N15.4 billion in penalties amid shrinking returns.

 

NaijaOnPoint Nigeria reports that Zenith Bank Plc is facing mounting criticism from its own shareholders following revelations that the institution paid a staggering ₦15.42 billion in regulatory fines in 2024 alone, a colossal leap from just ₦21 million in 2023.

The penalties, primarily imposed by the Central Bank of Nigeria (CBN), have sparked outrage, especially as shareholders watch their dividends stagnate despite the bank’s claimed profitability.

 

Regulatory Breaches Erode Shareholder Value

 

While Zenith Bank declared a total dividend of ₦5.00 per share which amounted to ₦195.67 billion for the 2024 financial year, many shareholders argue this figure could have been significantly higher were it not for the financial blow dealt by persistent infractions.

The ₦15.42 billion penalty includes sanctions for anti-money laundering failures, foreign exchange violations, and other serious regulatory breaches and has raised serious questions about the bank’s internal controls, compliance culture, and corporate governance.

“These fines are dragging institutions down,” said Zenith shareholder Okezie Boniface. “If not for this ₦15 billion penalty, our dividend would have easily gone beyond ₦5 per share.”

The comparison to peer banks makes Zenith’s situation more damning. While Access Bank paid ₦1.21 billion in penalties and GTBank ₦1.6 billion, Zenith Bank’s figure towers above the rest, suggesting a systemic failure to adhere to regulatory standards.

Growing Concerns Over Zenith Bank’s Risk Management

Stakeholders are beginning to question whether Zenith Bank is losing its grip on risk management and operational discipline. For a bank historically regarded as a pillar of prudence, such a leap in regulatory fines has rattled confidence.

“A company incurring this level of penalty is clearly failing at the top,” noted investment analyst Abiodun Adedotun. “It signals to investors that the board is not doing its job — or worse, that the management is indifferent to regulatory compliance.”

Zenith’s response, a vague assurance by new Group Managing Director, Adaora Umeoji, that “measures are being implemented”  has done little to calm nerves.

Windfall Taxes Add to the Strain

 

In addition to penalties, Zenith Bank was also among those hit hard by the windfall tax introduced under the Finance (Amendment) Act 2023, paying a hefty ₦63.3 billion in charges related to profits from forex transactions. Combined with other levies and regulatory fines, these losses pose a direct threat to investor returns.

While nine major Nigerian banks collectively paid ₦1.2 trillion in taxes in 2024 , a 111.4% spike from the previous year; the dividend payout was significantly lower at ₦951.4 billion, highlighting the disproportionate burden placed on institutions like Zenith.

Shareholders Demand Accountability and Reform

NaijaOnPoint Nigeria reports that Zenith Bank’s AGM was fraught with discontent. Long-time investor Dr. Farouk Umar lamented, “The taxes and penalties are becoming unbearable. We pay corporate tax, withholding tax, education tax, and now windfall taxes. What’s left for shareholders?”

Calls for board-level accountability have grown louder, with investors demanding clear action plans to clean up the bank’s compliance record. Some have even suggested rethinking their positions in the bank if leadership fails to act decisively.

A Leadership Test for Umeoji

For Adaora Umeoji, who recently took the helm as Zenith’s Group CEO, the challenge is steep. Restoring investor confidence will require more than PR reassurances; it demands real, structural change.

With the CBN tightening regulatory noose and investor patience wearing thin, Zenith Bank risks eroding its once-solid reputation as a blue-chip investment. Unless compliance lapses are addressed decisively, the damage to its brand and shareholder value could become permanent.

Is Zenith Bank Still Worth the Risk?

 

Once admired for its stability, Zenith Bank now finds itself at a crossroads. The N15.4 billion fine, skyrocketing taxes, and lackluster dividend growth all paint a troubling picture. With competitors managing to keep penalties under tighter control, stakeholders are beginning to ask: Is Zenith Bank truly prioritizing its investors  or is it sleepwalking into a credibility crisis?