LAGOS—WEMA Bank Plc unveiled, yesterday, its plan to meet the new capital base of N25 billion for banks recently announced by the Central Bank of Nigeria (CBN), saying it would seek additional funds from the capital market and consolidate with other banks
Managing Director/Chief Executive Officer of the bank, Mr. Alade Adeleke, at a pre-AGM luncheon by the organisation said it had taken decisive steps to ensure that it met the required minimum capital base before the December 2005 deadline given by the apex bank.
He said: “The Board of Directors of the Bank has approved a two-prolonged approach to meet the new capitalisation requirement: To approach the capital market to raise additional capital through a Public Offer of 5,000,000,000 ordinary shares at a price to be determined later.”
The Wema Bank boss who briefed newsmen on the bank’s performance for the current financial year said the bank’s proposed offer would commence in the next couple of weeks, after the shareholders might have endorsed the proposal at the forth coming Annual General Meeting (AGM) scheduled to hold on October 13, 2004 coupled with the approval of the regulatory authorities in the capital market.
Responding to a reporter’s question on the bank’s consolidation plan, the Wema Bank boss said: “We have been talking with no fewer than 20 banks, the National Bank inclusive.
We are yet to have any conclusion with National Bank. We want to consolidate with a number of smaller banks with competence in Investment Banking and branches in core north and eastern parts of the country. We have commenced serious discussions with a number of banks; we are likely to sign a Memorandum of Understanding (MOU) with the bank(s) and at the appropriate time, an announcement would be made to the public.”
Commenting on the provisions of N2.188 billion loan loss made in the financial year ended March 31, 2004, Adeleke said: “Management has taken proactive measures to clean up the bank’s balance sheet. This will place the bank at a vantage position in the aftermath of the reforms process while equally laying a solid foundation for sustainable future performance.
“We have consequently, made adequate provision on all our risk assets. I am delighted to inform you that a total N700 million was recovered in the first six months of this financial year from the risk assets already provided for. This will be written back to our profit and loss account, thereby boosting our profitability in the present financial year.”
Speaking on rewards to shareholders, he said: “The Board of Directors of the bank has approved the payment of a cash dividend of 10 kobo per share and a bonus of one ordinary share for every three held by shareholders. The Board took this decision as part of the strategies to build our reserve so as to improve the bank’s shareholders’ funds. Besides, if the bonus is added to the dividend payment, the payout to shareholders in real terms comes to about 55 kobo.”
On the future of the bank, Adeleke said the bank remained committed to achieving a top five position in the industry.
