Wema Bank Confirms Preparedness to Raise N25bn
By Uche Obike and Tunyosola Ayansiji
The management of Wema Bank Plc has commended the Central Bank of Nigeria (CBN) over its decision to raise the minimum capital base of banks in Nigeria to N25 billion.
Speaking at the weekend in Lagos, Mr. Eddy A. Ademosu, Senior Manager, Public Relations said Wema Bank's welcomes the new development which, according to him, is capable of consolidating the gains of the banking industry
He assured the investing public that Wema Bank has the capacity to meet the required recapitalisation with or without merger based on convincing factors.
Ademosu added that the bank's shareholders' fund which stands presently at N7.2 15 billion will definitely increase by the time the financial figures of the 2003/2004 are released.
He also disclosed that the bank has concluded plans to go to the capital market later in the new financial year (2004/2005- March ending) to raise fresh funds as will be deemed appropriate by its shareholders.
He explained further that "given the present configuration of the equity holdings of the bank, such public offer will be successful."
The bank is confident that five state governments of the South West (Oyo, Osun, Ondo, Ogun and Ekiti) as represented in Odua equity holdings of 40 per cent, will take up their shares of the Offer, while staff of the bank and other key stakeholders/associates of the bank accounting for 20 per cent of its equity share, will also automatically pick up their share of the Offer.
"This readily means that such a public offer for fresh fund would have attained at least 60 per cent success ab-initio," he said.
Ademosu expressed confidence that the goodwill which the bank enjoys presently in the industry and the country at large is enough to attract investors who will take up the balance of 40 per cent of the Offer that will be fully subscribed, if not over subscribed.
Wema Bank has maintained strong overall footings, safety borne out of long years of existence (about 60 years old) and profitability potentials to investors.
"On the option of Merger/Acquisition, (if it becomes imperative), the bank will retain its name, legacy, brand and goodwill at all cost. This means that in case of any alliance with any bank or group of banks, Wema Bank will remain a dominant partner in such arrangement," he said.
The bank has continued to record impressive performance in spite of the challenging operating environment within which it operated in the last financial year.
Its gross earnings increased by 23 per cent from N7.9 billion to N9.7 billion, while total deposits rose by 34 per cent from N32.8 billion to N43.8 billion.
Although, the bank's profit before taxation fell marginally by less than one per cent to N2.286 billion, its total assets grew by 39 per cent, thus bringing its total balance sheet size to N61 billion.
The bank's Rights Issue that executed towards the end of 2002 was fully subscribed, apparently demonstrated investors' confidence in the management of the bank. This has consequently impacted positively on its shareholders' funds which increased by 91 per cent from N3.8 billion to N7.2 billion.
Also, the bank declared a bonus issue of one for every three shares for the period ended March 31,2003, while it declared a dividend of 25 kobo per 50 kobo per share.
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