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Wema Bank Plans Return to National Bank Position

By on November 12, 2012

Wema Bank HQ

Wema Bank has announced plans to return to national bank status by December 2012.

The bank announced its plans to reapply for National Banking License in view of a proposed tier 1-capital injection of around N35 billion by December 2012.

This development was fueled by a 29 per cent increase in gross earnings and 56 per cent increase in operating income by the bank for 2011, which was disclosed at a presentation to financial regulators and the public in Lagos.

On the bank’s performance and plans the Managing Director/CEO, Segun Oloketuyi, said despite the present situation of the bank, it was committed to its revival plans without compromising on the bank’s values of integrity, professionalism, and exceptional service delivery.

According to Oloketuyi, “The past three years have seen Wema Bank evolve into one of the leaders in the retail banking space through a well-structured transformation process that has seen the implementation of sound corporate governance and risk management frameworks to further engender a stronger and more dynamic business model.

We are thus confident in our resolve to translate challenges into opportunities and maximizing value for all stakeholders”

He said, the N35billion tier-1 Capital raising plans were almost concluded, which commenced a few months ago with a firm commitment of N15 billion by a core investor already in place.

“We expect to begin the process of seeking regulatory approval as soon as all the necessary plans are finalized,” he stated.

A review of the bank’s financial performance shows significant rising trend since 2009 when the new management came on board in December, with gross earnings growing from 35.02 per cent to N25.64 billion.

Oloketuyi confirmed that, in December the bank’s gains in earnings and various cost-containment strategies were largely wiped off by one-off impairment charges on assets culminating in a loss after-tax loss N7.6 billion, the bank is better well positioned financially and economically now.

He added “a growth of 9.45 per cent to N222.24 billion was recorded in total assets in 2011 whilst an aggressive focus on cleaner loan books and better risk management has seen a significant reduction in NPL ratio from 56 per cent in FY2010 to 14 per cent in FY2011 (NPL now 4.5 per cent as at Q3, 2012)”.

Speaking on the injection of additional capital, Oloketuyi articulated confidence that it will allow the bank attain most favourable business results by driving volumes as more risk assets and investment securities are financed in the short-to-medium term.