Wema Bank set to float N20 billion fresh debt capital

Wema Bank has announced plans general meeting, Wema Bank Plc has announced plans t o raise additional N20 billion debt capital in the next few weeks.The capital, which would position the bank to leverage future opportunities in the industry was sequel to an approval received by shareholders at the last yearly general meeting to issue bonds or preference shares this year to raise N20bn in the first tranche of a N50 billion programme

Speaking at a media parley in Lagos, the Managing Director of Wema Bank, Segun Oloketuyi, explained that the Tier 2 capital will position the bank for further growth after it obtained a banking licence upgrade from the Central Bank of Nigeria (CBN).

He noted that the bank is fully prepared to scale up its operations to cover locations in the North and Eastern parts of the country.“To ensure that this approval is leveraged appropriately, we are already in the process of raising N20 billion in Tier 2 capital. We expect to re-open five (5) branches in the next three months in Kaduna, Lokoja, Minna, Aba and Enugu.

“In spite of the challenges in the economy and in the industry, we remain optimistic about the future of the Bank. Our retail focus is beginning to yield good numbers and we are already ramping up efforts to ensure that we deliver on the promises to our stakeholders.”

He assured that the bank would increase the drive of the ongoing cost containment initiatives and leverage on technology to increase efficiency across all channels and platforms.Oloketuyi explained that in 2009 when the new management took over the operation of the bank, the lender was in a distressed situation with negative capital.

He added that the non-performing loan ratio was 89 per cent but due to prudent risk management framework by 2014, the non-performing loan came down to 15 per cent and currently reduced further down by 2.9 per cent.

Wema Bank recorded a 11.11 per cent growth in profit after tax for the half year ended June 30, 2016.In a filing from the Nigerian Stock Exchange (NSE), the bank’s net earnings for the half-year stood at N1.1 billion as against N99 million posted in 2015, representing an increase of 11.11 per cent.

Pre-tax profit also stood at N1.3 billion during the period under review, from N1.2 billion posted a year earlier, accounting for 8.33 per cent.The bank’s gross earnings grew by 16.3 per cent from N20.9 billion in 2015 to N24.3 billion during the second quarter of 2016.

“The 2016 financial year has been a rather eventful one for the Nigerian economy. The year has been characterised by deceleration on a number of economic indicators coupled with increasing energy costs, intensified by rising inflation, all within a tough operating environment.

“ The banking industry has not been immune to these challenges as we witnessed a decline in customer deposit growth rate, reduction in margins, and an increase in NPLs in some sectors.

“In spite of these challenges, Wema Bank has been able to deliver a modest improvement in the first half of the year. Interest income grew by 15.2 per cent from N17.5 billion in H1 2015 to N20.2 billion in the current period.”