Wema Bank Plc said it would target a share placement or a public offer ahead of its forthcoming industry recapitalization order, which will target a share placement after the bank raised N40 billion in December. The bank's executive director released this statement on Monday.
Commenting on this move, Wema’s chief finance officer, Tunde Mabawonku, said the bank's current share sale will close on December 29, which will raise shareholder funds to N160 billion, including the bank's retained earnings from N90 billion.
According to records, Wema Bank is the first Nigerian bank to raise additional funds this year. Its plans happened at the same time as the Central Bank of Nigeria Governor Olayemi Cardoso's order last month that banks would need to raise capital to support an expansion of the economy.
Mabawonku said, "The plan is to get this in ... then, depending on the quantum of the central bank order, we can decide to make a special placement or a public offer."
He added that Wema Bank's capital would reach 20% at closing the rights issue from 16% in September. In 2021, Wema's capital ratio stood at 12%.
Mabawonkus mentions that the bank expects to earn one naira per share this year, up from 0.86 naira in the third quarter. It expects pre-tax profit to double to 75 billion naira ($95.1 million) next year, up from 30 billion naira.
"We would have capital to do more next year," Mabawonku said. "With more capital, our lending limit is enhanced, so we would be able to boost loans."
Read more: https://www.investingport.com/wema-bank-plc-plans-to-raise-fresh-capital-through-share-sale/