Wema Bank to raise N50b Tier-2 capital | Nigeria Newspaper- Nigeria News| Naija News


Wema Bank to raise N50b Tier-2 capital

Wema Bank to raise N50b Tier-2 capital
Wema Bank Plc is raising N50 billion tier two capital through bonds to enable it deepen its market penetration and profitability, its Managing Director, Segun Oloketuyi, has said.

Speaking at a briefing at the weekend, in Lagos, the bank chief said N20 billion would be raised in the first few weeks while the remaining N30 billion would come in the near future.
“We will increase the drive of the ongoing cost containment initiatives and leverage on technology to increase efficiency across our channels and platforms. The bank will also be raising additional debt capital in the next few weeks to further give it the necessary leverage to drive growth,” he said.
Continuing, he said: “We are doing debt capital. It is a tier two capital and it is a bond. The bond will open very soon, it is a N50 billion issuance programme, but we are doing it in two tranches. The first tranche is N20 billion, and the second tranche is N30 billion. So, we are taking N20 billion first, and sometimes in the near future, and as the need arises, we will take on the balance of N30 billion,” he disclosed.
Oloketuyi said the bank has witnessed a turnaround since the new management took over in June 2009, adding that before the coming of the new management, the lender had a negative capital position of N45 billion, with the lender virtually on its knees. He said the new management has grown the bank’s shareholders’ funds to N46 billion.
Explaining further, he said the lender previously had less than one per cent market share, and ran on obsolete technology, while non-performing loans (NPLs) stood at 89 per cent. But with the new management, the NPLs have dropped to 2.9 per cent while profitability has risen to new heights.
“So, we had to start to look at what to do with the bank and therefore, developed a containment strategy focusing on how to stabilise the bank. The periods of 2010 to 2014 was largely used to give life back to the bank. So, the first major assignment we had to do was to secure the regulatory capital. We had to recapitalise the bank, which we did,” he said.
Wema Bank boss said the lender received the Central Bank of Nigeria’s (CBN’s) final approval to convert from regional to national bank. The bank, he added, is also driving its growth with new products and technology.
For instance, it unveiled the card control platform, which gives customers absolute control of their cards both in Nigeria and abroad. The bank has received lots of testimonials based on the introduction of the product.
“The bank equally launched the Buxme platform, a social account that allows people to transfer money using their email or phone numbers, and has over 4,000 registered users as at August 15.
The lender also introduced the *955#, which enabled it to increase customer acquisition and makes banking convenient for users. The product has enabled the lender to reduce its cost of service with over 3,539 accounts opened on *945#”.
Speaking further, he said in spite of the challenges in the economy and in the industry, the lender remains optimistic about its future. “Our retail focus is beginning to yield good numbers and we are already ramping up efforts to ensure that we deliver on the promises to our stakeholders. In addition, the journey to lead the digital landscape is critical as it will propel us to the front of the industry,” he said.
He said the bank has also received final approval from the CBN’s to convert its banking license from regional authorisation to national authorisation. “The bank now operates as a full-fledged commercial bank in all geo-political zones and the Federal Capital Territory (FCT). The bank is fully prepared to scale up its operations to cover locations in the north and eastern parts of the country. We expect to re-open five branches in the next three months in Kaduna, Lokoja, Minna, Aba and Enugu,” he said.


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