Wema Bank Targets Equity Raise, Increases 2023 Profit Outlook

Wema Bank will target a share placement or a public offer ahead of a forthcoming industry recapitalisation order, after raising N40 billion this month, its executive director said.

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 N160 billion including retained earnings, from N90 billion. 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 N0.86 in the third quarter. It expects pre-tax profit to more than double to N75 billion next year, up from N30 billion, 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).”