“N1 Per Share”: Bank Invites Nigerians to Buy Shares as CBN Moves for Higher Capitalisation

• Wema Bank raised N40 billion this month as part of its efforts to shore up its capital base
• The bank is also looking to increase the current N90 billion in shareholder funds to N160 billion
• The company's chief finance officer said its current share sale closes on December 29, 2023

Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.

Wema Bank has successfully raised N40 billion naira this month ahead of the planned recapitalisation by the Central Bank of Nigeria (CBN).

In addition to this, the bank plans to pursue a share placement or public offer in advance, the bank's executive director announced.

Tunde Mabawonku, its chief finance officer, told Reuters that the company's current share sale would close on December 29.

Read also

Nigerian billionaire opens cement factory, intensifies competition with Dangote Cement

He said this would enable the bank to increase the current N90 billion in shareholder funds to N160 billion.

From 16% in September, Mabawonku said its capital would hit 20% at the end of the rights issue in September. In 2021, its capital ratio was at 12%.

The bank is expected to earn N1 per share this year compared to N0.86 in the third quarter. In addition, it expects pre-tax profit to more than double to N75 billion next year, up from N30 billion.

Mabawonku said:

"We would have capital to do more next year. With more capital, our limit on lending is enhanced so we would be able to boost loans."

Considering the depreciation that has caused the naira to lose more than half of its value this year, Wema anticipates loan growth of 60% next year, up from 40% this year, according to Mabawonku.

Read also

Expert speaks on naira to dollar exchange rate in 2024 as FG introduces new dollar account charges

He added:

"In dollar terms, our balance sheet has fairly grown this year. We hope the exchange rate will be a little bit more stable next year."

Wema Bank increases staff salaries as impact of fuel subsidy removal bites hard

Legit.ng earlier reported that Wema Bank announced an increase in staff compensation to soften the impact of the harsh economic reality brought on by the elimination of fuel subsidy.

Ololade Ogungbenro, Divisional Head, People, Brand & Culture, mentioned this in a statement by the bank.

Recently, Legit.ng reported that one of Nigeria's leading banks, Guaranty Trust Bank, reviewed upward the salaries of its junior and contract staff by 100%.

Source: Legit.ng