Wema Bank to raise N40bn from rights issue

Wema Bank Plc will hit the local capital market next month to raise N40 billion from its existing  shareholders via rights issue.

According to its Deputy Managing Director, Mr Moruf Oseni, who disclosed this during a virtual half-year 2021 investors’ call /analysts presentation, the proceeds of the rights issue will enable the lender expand its base and help it compete favourably at the market space.

He used the opportunity allay market fears that the exercise would not lead to exponential increase in the bank’s shares.

He stated: “The rights issuance is expected to hit the market in September. This month of August is for us to have a court-ordered meeting to get shareholders together and agree on the scheme of the arrangement. Wema Bank today has a large number of shares in issuance, but before we float the right issue, we need to get the shareholders to reduce the shares in issue and on the back of that we then issue those rights.“This will not change the shareholding structure of the shareholders. “We just want to manage the number of shares in issue, and that will impact on our ratios. It makes sense to have more efficient shares in issue before doing the rights issuance.

 He added that the bank would embark on a road show this week to sensitise shareholder groups and associations on its growth plans and the capital raising. Oseni also announced that Wema Bank would be  considering acquisition of a fintech firm or a merger with another commercial bank, saying a merger and acquisition (M&A) was part of the bank’s plan to ensure organic growth.

His said, “In organic growth, there is possibility of a combination; either you merge or you acquire, and this acquisition is not limited to acquiring another financial player in this space or a fintech. We are looking at all possible options, whether you like it or not, no matter how efficient you are in this game, we are playing skill to skill, and we also have huge aspirations to scale up in the shortest possible time.”

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