Wema Bank to Raise N5bn
New Capital
By Ayodele Aminu and Olugbuyiro Akinola
A campaign for N5 billion Initial Public Offer (IPO) on the Nigerian Stock Exchange (NSE) is soon to be launched by Wema Bank Plc.
A memo to staff of the bank to this effect signed by its Managing Director/Chief Executive Officer, Alhaji Musliu Adeleke was issued at the weekend.
Another option being considered by the bank to achieve the N25 billion new capital for banks, according to the Wema Bank's boss, is to initiate discussions with other smaller banks on the possibilities of consummating a formidable merger that will stand the challenges of the industry.
He also stated that the bank may out rightly acquire some of the ailing banks with a view to profiting from their strengths.
Currently, the bank's shareholders' funds stands at N7.215 billion.
Wema Bank had posted an improved balance sheet figure of N61.323 billion for the financial year ended March 31st, 2003.
The figure showed an increase of 39 percent over the N44.101 billion recorded for the corresponding year ended March 3lst, 2002.
Similarly, deposits, leapt from N32.775 billion in year 2002 to N43.763 billion in year 2003, representing a 34 per cent increase.
In the same vein, the bank's investments, paid-up capital and shareholders' funds increased significantly from N2. l49 billion; N778.86 million and N3.768 billion to N3.943 billion; N1.527 billion and N7.215 billion respectively, representing 83.96 and 91 per cent increases.
Its gross earnings also rose to N9.716 billion during the period under review, marking an increase of 23 per cent over N7.919 billion recorded in the previous year ended 31st March, 2002.
But the bank's Profit Before Tax (PBT) remained flat at N2.286 billion compared with the previous year's N2.293 billion.
The proposed Wema's Initial Public Offer is not new to the capital
market since the CBN announced that banks should jerk up their capital base from N2 billion to N25 billion.
Some banks that recently raised funds from the capital market include Guaranty Trust Bank Plc and Zenith Bank Plc.
GTB is said to have raked in over N22 billion thereby raising
its shareholders 'funds to over N30 billion.
Zenith Bank also raked in N48.5 billion, a feat that made its IPO the highest in the history of the Nigeria Stock Exchange.
This was trailed by the on-going Oceanic Bank International Plc's IPO geared towards raising N16.960 billion.
Access Bank is also expected to fall in before the end of this month, while the United Bank for Africa Plc is expected to follow suit before the end of the year. Ditto for Fidelity Bank Plc which is expected early next year.
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