Wema Bank Plc (NGX: WEMABANK) has surpassed its recapitalisation target following the successful conclusion of the first phase of its capital-raising exercise.
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The Board of the Bank in April announced a Rights Issue of 14,286,785,417 ordinary shares of 50 kobo each on the basis of two (2) new ordinary shares for every three (3) ordinary shares at ₦10.45 per share.
Punch reported that according to market analysts, the rights issue, which closed with subscriptions of ₦157bn, is currently undergoing final verification by the CBN.
Prior to the capital raise, Wema Bank held ₦200bn in shareholders’ funds, out of which only ₦67bn 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.
Approval is expected in the coming weeks, after which Wema Bank’s qualifying capital will rise above ₦210bn, surpassing the regulatory requirement.
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.
The Central Bank of Nigeria (CBN) had in March 2024 announced an upward review of the minimum capital requirements for commercial, merchant and non-interest banks in Nigeria. All existing banks are required to meet the minimum capital requirement within a period of 24 months commencing from April 1, 2024, and terminating on March 31, 2026.
For commercial banks with international authorisation, the minimum capital is now ₦500 billion. Commercial banks with national authorisation will require a minimum capital of ₦200 billion, while those with regional authorization will require ₦50 billion.
On the other hand, Merchant banks with national authorization will require a minimum capital of ₦50 billion. Non-interest banks with national authorization require ₦20 billion while those with regional authorization require ₦10 billion.
Nnamdi Maduakor is a Writer, Investor and Entrepreneur
