– Increases 2023 profit outlook
Abuja — Nigeria’s Wema Bank (WEMABAN.LG) will target a share placement or a public offer ahead of a forthcoming industry recapitalisation order, after raising 40 billion naira ($50.7 million) this month, its executive director said on Monday.
Tunde Mabawonku, who also serves as Wema’s chief finance officer, said its current share sale would close on Dec. 29 and would help catapult shareholder funds to 160 billion naira ($202.79 million) including retained earnings, from 90 billion naira.
Wema is the first Nigerian bank to raise additional funds this year. Its plans coincided with Central Bank of Nigeria Governor Olayemi Cardoso’s order last month that banks would need to raise capital to support an expansion of the economy.
“The plan is to get this in … then depending on the quantum of the central bank order, we can decide to do a special placement or a public offer,” Mabawonku said.
Mabawonku said its capital level would hit 20% at the end of the rights issue from 16% in September. Its capital ratio stood at 12% in 2021.
Mid-tier lender Wema expects to earn one naira per share this year, up from 0.86 naira in the third quarter. It expects pre-tax profit to more than double to 75 billion naira ($95.1 million) next year, up from 30 billion naira, Mabawonku said.
“We would have capital to do more next year,” Mabawonku said. “With more capital, our limit on lending is enhanced so we would be able to (boost loans).”
Wema expects loan growth of 60% next year, from 40% this year, taking into account a devaluation which has seen the naira loss more than half its value this year, Mabawonku said.
“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.”
($1 = 789.00 naira)
*Chijioke Ohuocha; editing: Lisa Shumaker – Reuters
