Wema Bank raises N40b fresh capital, to reapply for national licence
Almost three years after exchanging its universal operating licence for a regional one, the management of Wema Bank Plc, on Thursday announced plans to re-enter the national turf.
Addressing journalists in his Lagos office, Segun Oloketuyi also said the bank finally completed a N40 billion capital raising exercise, slightly more than the N35 billion announced some years ago.
The fresh fund sourced by way of placing of 23 billion new ordinary shares, he explained, is currently going through regulatory verification, which would likely be completed before August 1. When added to its current 12.8 billion shares in issue, the bank would have a total of 35.8 billion units.
“Once this is done, we would go back to the CBN (Central Bank of Nigeria) for a national licence,” he explained.
Fielding questions, Oloketuyi assured that the new Tier 1 capital will not be invested in growing branch network, information technology infrastructure, because it already has properties scattered across the country no presently in use, just as it uses the finacle 10.2 banking application, the latest in the industry. About 80 per cent of the new capital, he assured, will be deployed into working capital to grow the business for enhanced returns.
The Chief Executive also spoke of plans to source Tier II Capital (stable long-term tenored loan at reasonable rates) that would further help to provide liquidity and growth for the business.
Despite plans to go national, he assured that the bank’s business would mainly remain in South-West and South-South geo-political zones where it currently operates as a regional bank, while keeping an eye on opportunities that may emerge across the country.
Entry into other geo-political zones, he continued, would be “driven by imperatives backed by viability economic analysis, rather than the “me-too syndrome.”
Before opting for a regional licence, he continued, Wema Bank had to close 17 loss-making branches outside its present operating environment, thereby saving over N400 million, which he said is huge.
“We won’t go to every state or local government,” he said, assuring that the management is keen on extracting maximum value from its assets, rather than just competing for size.