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Shareholders approve Wema Bank’s change to regional bank

By Michael Eboh
Shareholders of Wema Bank Plc have approved the decision of the bank to apply for a regional banking licence.
This was after management of the bank, explained its decision and need for the transformation to a regional bank.

The management and Board of the bank said that its decision to acquire a regional banking license was borne out of the need to grow the bank systemically and adopt strategies that will strengthen and help it bounce back to national and global reckoning.

Speaking at the annual general meeting (AGM) of the bank in Lagos weekend, Mr. Segun Oloketuyi, Managing Director, Wema Bank, however noted that the bank will re-apply for a national banking license, in the medium to long term, after growing the bank organically.

According to him, re-designating as a regional bank does not exclude it from performing the normal commercial banking services, only that it can not become a settlement bank. He said that the strategy adopted by the bank is to close some of its non-viable banks in certain region, concentrating on the ones that are making significant contributions to the improvement in its top and bottom lines.

He further stated that the bank is currently pursuing an aggressive debt recover strategy to ensure that its debtors repay the loans granted them, while it is currently working out an arrangement with some of its key debtors to ensure a repayment of the loans.

He said, “Our decision to apply as a regional bank is as a result of certain factors affecting our operations. We discovered that a number of branches in certain regions of the country are not viable. These banks were not contributing any meaningful income to the Group, just adding to its costs.

“The management then came to the conclusion, that in order to grow the bank, we might have to close this branches and focus on the viable ones till we are able to stabilise, strengthen and grow our operations and activities.

“This led us to the decision to apply for a regional banking license, till a time when the bank is seen to be strong and active. The regional banking license will help us restrategise and refocus the bank, helping it to grow organically, after which we can now re-apply for a national banking license.

“However, it should be noted that a national bank is in no way superior to a regional bank. Both banks perform the same services, the only difference being that a regional bank can never become a settlement bank. Even at that, presently, of all the banks in the country, there are only about four or six settlement banks in Nigeria.

“As a regional bank, we can still perform all the services of a national bank, such as accept deposits, participate in foreign exchange transactions, give out loans among others.”


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