Business
Recapitalisation: Wema Bank leverages innovations to retain national status
Recent developments in the affairs of Wema Bank Plc. are placing the lender among financial institutions that are well-positioned to meet the recapitalisation deadline set by the Central Bank of Nigeria (CBN).
The CBN in March 2024, launched a recapitalisation programme requiring banks to raise fresh capital in alignment with the minimum requirement for their respective banking licenses.
The exercise, intended to strengthen the Nigerian financial services institutions to play a bigger role in the economy, is to be completed within 24 months, from April 1, 2024, to March 31, 2026.
For Wema Bank, the push for N200 billion points to trajectories of critical statistics, which suggests that the recapitalisation programme presents a huge opportunity to record significant growth and boost market share, thereby getting stronger post-exercise.
The Tier-2 lender recently flagged off its capital raise to meet the target with the N40 billion rights issue, which has been approved by the Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC).
In a statement, the Managing Director/CEO, Moruf Oseni, reiterated the bank’s resolve to retain its Commercial Banking license with National Authorisation, adding that the N40 billion Rights Issue is a step in that direction.
He stated: “We are delighted to announce the conclusion of the first tranche of our Capital Raise Programme, after obtaining the relevant approvals of all regulatory authorities.
“Our move to commence our Capital Raise Programme very early demonstrates our push for excellence and with a strong emphasis on our digital play, we are set to amass more successes in the coming months.
“We were impressed by the vote of confidence given by our shareholders during the first Rights Issue exercise as our shares were fully subscribed. In addition, we obtained the approval of shareholders at our 2023 Annual General Meeting (AGM) to raise an additional N150 billion to meet the capitalisation threshold set by the CBN. The process is expected to be completed within 12-18 months.
“We are committed to providing optimum returns for every stakeholder and the successful conclusion of this N40 billion Rights Issue is a bold step in the right direction.”
Despite the unfavourable economic climate, the bank hauled N146.06 billion in interest income, which is 129.7 percent more than the N76.64 billion achieved in the preceding year.
Its profit before tax rose to N30.56 billion during the review period compared with N12.05 billion in H1 2023, translating to 153.6 percent. Similarly, profit after tax rose by 154.6 percent to N26.59 billion compared with N10.49 billion in H1 2023.
Investment in securities yielded a 120 percent increase in returns from N21.20 billion in H1 2023 to N47,29 billion in the review period on the back of a favourable interest environment as the government intensified borrowings through public-offered instruments during the period.
The lender’s profit was also boosted by non-interest income from FX transactions, which surged 1,028 percent to N6.4 billion from N571 million in H1 2023. The bank also reaped significantly from its huge investment in electronic products for which it has a tremendous reputation as an industry leader. Revenue from e-banking platforms rose to N6.1 billion from N3.1 billion in H1 2023 – a 95 percent increase.
Reinventing traditional banking
Founded in 1945, years before Nigeria even gained independence, Wema Bank gained its National Banking license in 2015 and went from being a Regional Bank to becoming a National Bank.
Since 2015, the Tier-2 lender has shaken the financial services industry, redefining the standards of banking with a myriad of unique, tailored, and impactful solutions that have transformed the lives and experiences of Nigerians across the globe.
Accordingly, the bank introduced a strategic range of platforms, in addition to solutions, supporting the lives and needs of its diverse customers by providing a healthy range of banking options tailored to their realities, experiences, and needs.
One of the most prominent solutions that caused a positive disruption in the African financial services industry is ALAT, Wema Bank’s exceptional digital banking platform, which doubles as Africa’s first fully digital bank.
ALAT by Wema, launched in 2016, is a digital banking platform that allows Nigerians from any part of the world to transact in Naira and Dollars from wherever they are, on their phones.
The pioneering platform is today, an ecosystem of dynamic financial solutions tailored to provide seamless, reliable, and convenient services for all.
To enhance its role in financial inclusion, Wema Bank also launched ALATHUB. This is its agency banking platform designed to help Nigerians of all ages in the most rural parts of the country access banking services via registered Wema Bank Agents.
Customers using this platform can do anything from opening accounts, withdrawals, deposits, and money transfers to accessing loans, getting cards, and sorting other financial needs, without having to go to the bank.
