News

June 14, 2024

Recapitalisation: Wema Bank gets regulatory approvals for N40bn rights issue

Wema Bank

Wema Bank says it has successfully concluded the first tranche of its recapitalisation exercise having secured all relevant regulatory approvals for the allotment of its N40 billion rights issue.

Its Managing Director, Mr Moruf Oseni, disclosed this in a statement made available on Friday in Lagos.

Oseni said as a forward-thinking and pioneering bank, the financial institution in December 2023 launched N40 billion rights issue which had been approved by the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC).

The News Agency of Nigeria (NAN) reports that CBN, in March, launched a recapitalisation programme requiring commercial banks to raise fresh capital.

This is in alignment with the minimum requirement for their respective banking licenses within a 24-month timeline spanning April 1 to March 31, 2026.

The goal of recapitalisation is to simultaneously boost the Nigerian economy and strengthen its financial services industry.

Oseni said: “With this remarkable development, Wema Bank has now successfully raised the first tranche of its plan in the minimum requirement laid down by the CBN.

“The bank’s resolve in retaining its commercial banking license with National authorisation and the N40 billion rights issue is a step in that direction.

“Our move to commence our capital raise programme very early demonstrates our push for excellence, and with a strong emphasis on our digital play, we are set to amass more successes in the coming months,” he said.

The managing director expressed satisfaction with the vote of confidence given by the bank’s shareholders during its first rights issue exercise, noting that its shares were fully subscribed.

Oseni stated that the bank also obtained the approval of its shareholders at its 2023 annual general meeting to raise an additional N150 billion to meet the capitalisation threshold set by the CBN.

He hinted that the process was expected to be completed within 12-18 months.

Oseni said: “We are committed to providing optimum returns for every stakeholder and the successful conclusion of this N40 billion rights issue is a bold step in the right direction.

“In addition to the upward trend in the bank’s financial performance and the success recorded so far in its recapitalisation exercise, Wema Bank’s corporate rating was recently upgraded to BBB+ by Pan African credit rating agency, Agusto and Co.

“The bank was also retained at BBB by international rating agency, Fitch.”

According to him, over the medium to long term, Wema Bank is positioned to not only dominate the digital banking space but also the Nigerian financial services industry at large as it translates its industry leadership to significant market share.