Wema Bank exceeds recapitalisation target with N157bn rights issue

Wema Bank Plc has surpassed its recapitalisation target following the successful conclusion of the first phase of its capital-raising exercise, securing N157bn through a rights issue.

The digital-driven lender, which had set out to shore up its regulatory capital in line with the Central Bank of Nigeria’s recapitalisation directive, said the investor response reflects confidence in its strategy, leadership, and long-term growth outlook.

Before the capital raise, Wema Bank held N200bn in shareholders’ funds, out of which only N67bn qualified as regulatory capital. To address this gap, the bank initiated a two-pronged capital-raising strategy comprising a rights issue and a special placement.

According to market analysts, the rights issue, which closed with subscriptions of N157bn, is currently undergoing final verification by the CBN. Approval is expected in the coming weeks, after which Wema Bank’s qualifying capital will rise above N210bn, surpassing the regulatory requirement.

Building on the momentum, the lender recently launched a special placement aimed at raising an additional N50bn. Investor commitments have already been secured, and the offer will remain open for 10 days.

Commenting on the development, the Managing Director/Chief Executive Officer of Wema Bank, Moruf Oseni, said the strengthened capital base would provide the bank with more room to expand lending, accelerate digital innovation, and enhance customer experience.

“Upon meeting the recapitalisation target, our focus is on leveraging the strengthened capital base to drive sustainable growth, expand lending capacity, accelerate digital innovation, and enhance customer experience,” Oseni said.

Also, the group managing director of The Lancelot Group, Adebayo Adeleke, noted that Wema Bank’s survival for over eight decades in the Nigerian banking landscape underscores its adaptability.

“Wema Bank was the only indigenous bank to have weathered the economic storm for over eight decades. It’s a testament to both its resilience and adaptability. It has reconnected with the younger generation by deploying ICT solutions in its services. Shareholders are always ready to support the bank by buying more of its shares,” Adeleke said.

Independent equity analysis by Global Asset Management has also placed a positive outlook on the bank’s stock, describing it as undervalued relative to its intrinsic worth. The report recommends Wema Bank shares as a strong buy for long-term investors seeking both capital appreciation and dividend income.

On the Nigerian Exchange, Wema Bank’s stock has appreciated almost 160 per cent year-to-date, making it one of the attractive performers on the bourse. Analysts say with the new capital injection and strong fundamentals, the bank is well-positioned for sustainable growth and could make the transition to an international bank in the near future.