After completing the first phase of its capital-raising plan, Wema Bank Plc secured N157 billion through a rights issue, surpassing its recapitalisation target.
The digital-focused lender initiated the exercise in response to the Central Bank of Nigeria’s recapitalisation directive. The robust investor response demonstrates confidence in its leadership, strategy, and long-term growth prospects.
Only N67 billion of the N200 billion the bank had in shareholder funds before the raise met regulatory capital requirements. Wema used a two-pronged approach to bridge the gap, including a special placement and a rights issue.
N157 billion capital raise awaits CBN verification
According to market analysts, the CBN is finalising the rights issue, which closed at N157 billion. Once approved, the bank’s qualifying capital is anticipated to surpass N210 billion, significantly more than the regulatory threshold.
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The bank has started a special placement to raise an extra N50 billion to build on this momentum.
The offer will be available for ten days, and investor commitments have already been obtained.
N157 billion capital raise to speed up digital innovation, others
Moruf Oseni, Wema Bank’s managing director and chief executive officer, stated that the strengthened capital base will allow the bank to increase lending capacity, speed up digital innovation, and improve customer experience.
“Upon meeting the recapitalisation target, our focus is on leveraging the strengthened capital base to drive sustainable growth, expand lending capacity, accelerate digital innovation, and enhance customer experience,” Oseni said.
Adebayo Adeleke, Group Managing Director of The Lancelot Group, said that Wema Bank’s more than 80 years in Nigeria’s banking industry is evidence of its adaptability and tenacity.
“Wema Bank was the only indigenous bank to have weathered the economic storm for over eight decades. It’s a testament to both its resilience and adaptability. It has reconnected with the younger generation by deploying ICT solutions in its services. Shareholders are always ready to support the bank by buying more of its shares,” Adeleke said.
Affordability of Wema Bank’s shares
According to an independent equity review by Global Asset Management, Wema Bank’s shares are still cheap compared to their intrinsic value.
The company rated the stock suitable for long-term investors looking for dividend income and capital gains.
Wema Bank’s stock has risen by almost 160 per cent on the Nigerian Exchange this year, placing it among the best-performing companies in the market.
According to analysts, the bank is well-positioned for long-term growth and may soon become an international bank thanks to the recent capital infusion and strong fundamentals.