'N1 per share' - Bank invites Nigerians to buy shares as CBN moves for higher capitalisation

Wema Bank has successfully raised N40 billion naira this month ahead of the planned recapitalisation by the Central Bank of Nigeria (CBN).

In addition to this, the bank plans to pursue a share placement or public offer in advance, the bank's executive director announced. Tunde Mabawonku, Chief Finance Officer, told Reuters that its current share sale would close on December 29.

He said this would enable the bank to increase the current N90 billion in shareholder funds to N160 billion.

From 16% in September, Mabawonku said its capital would hit 20% at the end of the rights issue in September. In 2021, its capital ratio was at 12%. The bank is expected to earn N1 per share this year compared to N0.86 in the third quarter.

In addition, it expects pre-tax profit to more than double to N75 billion next year, up from N30 billion.

Mabawonku said: "We would have capital to do more next year. With more capital, our limit on lending is enhanced so we would be able to boost loans."

Considering the depreciation that has caused the naira to lose more than half of its value this year, Wema anticipates loan growth of 60% next year, up from 40% this year, according to Mabawonku.

He added: "In dollar terms, our balance sheet has fairly grown this year. We hope the exchange rate will be a little bit more stable next year."