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Tag: Wema Bank Plc

  • Wema Bank plans N200b in placement, rights issues

    Wema Bank plans N200b in placement, rights issues

    Wema Bank Plc has approved plans to raise additional N200 billion in combination of Rights & Special Placement to complete the Central Bank of Nigeria (CBN) recapitalization requirement.

    The bank which pioneered Africa’s first fully digital bank, ALAT, said it will be completing its capital raise through a combination of a Rights issue and Special placement exercise set to go live on April 1, 2025, with the goal of raising N200 billion in fresh capital.

     This would mark the second and final tranche of the Bank’s capital raise exercise, supplementing the N40 billion raised in the first tranche, and ensuring the Bank surpasses the CBN minimum requirement for national banking authorization.

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    In its usual manner as a proactive, innovative and forward-thinking bank, Wema Bank, had prior to the CBN announcement, already launched a N40 billion rights issue as far back as December 2023, receiving the approval of the CBN and the Securities and Exchange Commission (SEC) in 2024. This resulted in the Bank’s successful completion of the first tranche of its capital raise exercise.

    With over 30per cent of the CBN target of N200 billion already met, Wema Bank is proceeding to initiate the second tranche of capital raise come April 2025, this time, with the goal of raising N200 billion in fresh capital to complete its capital requirement.

    Confident in the outcome of the upcoming rights issue, Wema Banks MD/CEO, Moruf Oseni, assured shareholders and other stakeholders of a successful conclusion of the capital raise program.

    According to him, We stand strong today not just as Nigeria’s oldest indigenous bank but also as Nigeria’s leading innovative bank.

  • Recapitalisation: Five banks bid for N1tr capital raising

    Recapitalisation: Five banks bid for N1tr capital raising

    Not less than five banks are rounding off preliminary documentation and approval processes to raise more than N1 trillion in the second cluster of the capital raising under the ongoing banking recapitalisation.

    Multiple sources yesterday confirmed that the banks have reached advanced stages in their pre-offer processes, with the two largest banks within the cluster expected to headline the capital raising this quarter.

    The banks include United Bank for Africa (UBA) Plc, Stanbic IBTC Holdings Plc, Wema Bank Plc, Premium Trust Bank and Jaiz Bank Plc among others. 

    In the first cluster, five banks were believed to have raised more than N1.5 trillion in a momentous opening to the Central Bank of Nigeria (CBN) directed programme. Those that have raised funds from the capital market are Guaranty Trust Holding Company (GTCO) Plc, Access Holdings Plc, Zenith Bank International Plc, Fidelity Bank Plc and FCMB Group Plc. Sterling Holding Company is rounding off its offer.

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    Investment banking sources said UBA and Stanbic IBTC Holdings would lead the next cluster with the two first-tier banks expected to launch their offers within this quarter.

    Nigeria’s apex capital market regulator, Securities and Exchange Commission (SEC), is already considering applications from the banks.

    A source close to SEC confirmed that there were some six offers currently undergoing regulatory approval process, the main regulatory hurdle preparatory to the launching of the offers.

     UBA, which has shareholders’ approval for multi-instrument capital raising programme, is expected to start with a rights issue under which the bank plans to raise more than N384 billion.

    Stanbic IBTC Holdings, which had launched a N550 billion capital raising process, has also reached advanced stage for the first tranche of its multi-instrument capital raising, according to market sources.

    Stanbic IBTC Holdings is also headlining its equity raising with a rights issue, a favourite instrument under the ongoing recapitalisation programme. Stanbic IBTC Holdings’ N550 billion capital raising include a rights issue of N150 billion and a N400 billion debt capital raising.

    Shareholders of the company had authorized the board “to raise additional equity capital of up to N150 billion by way of a rights issue or offer for subscription on such terms, tranches, conditions and dates as may be determined by the directors”.

    Wema Bank, with a national banking licence, is concluding pre-issuance processes to raise N200 billion in new equity funds, in a bid to preserve the 79 years old bank as a standalone entity post recapitalisation. Wema Bank, with a share capital and share premium of N15.13 billion, has one of the smallest starting points among the banks.

    Jaiz Bank has also secured preliminary approvals to float a rights issue of about 5.41 billion ordinary shares of 50 kobo each at offer price of N1 per share. This may take the bank’s minimum capital base, under the new definition, to more than N34 billion.

    Premium Trust Bank aims to raise about N180 billion in an ambitious plan to retain one of Nigeria’s youngest banks as a standalone entity. The bank commenced operations in April 2022.

    Experts had estimated that banks could raise about N5 trillion within the two-year recapitalisation period.

    The CBN in March released its circular on review of minimum capital requirement for commercial, merchant and non-interest banks. The apex bank increased the minimum capital for commercial banks with international affiliations, otherwise known as mega banks, to N500 billion; commercial banks with national authorisation, N200 billion and commercial banks with regional license, N50 billion.

    Others include merchant banks, N50 billion; non-interest banks with national license, N20 billion and non-interest banks with regional license will now have N10 billion minimum capital. The 24-month timeline for compliance ends on March 31, 2026. 

    Under the new minimum capital base, CBN uses a distinctive definition of the new minimum capital base for each category of banks as the addition of share capital and share premium, as against the previous use of shareholders’ funds. While several banks have shareholders’ funds in excess of the new minimum capital base, their share premium and share capital significantly fall short of the new minimum definition.

    Providing insights into the bank’s recapitalisation plan, Chairman, United Bank for Africa (UBA) Plc, Mr. Tony Elumelu, said the bank was confident of meeting the required minimum capital for its international license.

    He outlined three options UBA is considering to shareholders including rights issue which gives existing shareholders the first chance to buy new shares at a discounted price, private placement directly to a small group of investors and public offer to the general investing public.

    He urged shareholders to participate in the rights issue, highlighting the benefits of maintaining their ownership stake in the bank. He also plans to reinvest all his own dividends back into UBA.

    “We democratise prosperity. We like everyone to share it. So I’m requesting, advising shareholders, as you get your dividend, if you can, reinvest significant part of it. My group and I, we will reinvest 100 per cent in the dividend we get. Because if we do not do so, we are leaving food on the table for others who did not labour for it.

    “You know, we could have been sharing dividends over the years, that by today, our shareholders would have made N1 trillion. We would have shared N1 trillion to all of you. That additional money we have to bring to the table would have been brought from your earnings, from your dividends. But because we have been prudent and conservative, we felt no need to do so. Let’s keep banking. We need all the capital we can get. Let’s keep investing. And so we conserve.

    “We want to raise the rights in series. Next year, we’re going to finish all that. So we’re doing this to give shareholders the opportunity to raise money from at least your own investments to be able to reinvest. You know, three stages-rights, private placement, and public offer. I doubt that you get the public offer. I doubt it. Because we’ll be selling the shares at giveaways.

    “The reason we have it in one of the resolutions is that today, UBA is no longer a Nigerian bank, We’re a pan-African bank, we operate in different jurisdictions. So, we want to use this opportunity to create access for people from across Africa in particular. Especially in the present context we are operating to invest in UBA.

    “So, every country will have the opportunity. We allocate like $10 million to $20 million. Ghana, raise people who want to invest up to that, Tanzania, Kenya, etc. So, if what we don’t take by rights is, well will almost be taken out by our customers and friends. UBA remains a conservative bank,” Elumelu said.

  • Wema Bank Plc year end result excites shareholders

    Wema Bank Plc year end result excites shareholders

    Despite the economic headwinds which assailed most businesses as a result of forex crisis and other associated hiccups, last year Wema Bank Plc not only posted an unprecedented increase in profit before tax of N43.59billion in its year end results but also got the nod of its shareholders to raise fresh N40b capital to boost the business, reports Ibrahim Apekhade Yusuf

    The year 2023 will go down in the annals of Nigeria’s history as one year the people fought several demons literally as they battled artificial cash scarcity amidst a botched currency note redesign, initially hampering consumer spending while economic recovery in the second quarter was marred by the removal of fuel subsidies and the unification of the foreign exchange market, resulting in soaring inflation and considerable depreciation of the naira.

    However, in the midst of all these, some companies managed to stay afloat through it all.

    A cursory look at Wema Bank’s financial results for the fiscal year 2023 reads like a compelling narrative of strategic foresight, operational excellence, and innovative leadership, as the financial report showed that the bank’s remarkable achievements and financial health, thus showcasing a year of robust growth, strategic expansions, and increased profitability.

    The highlight of Wema Bank’s FY 2023 audited financial report is the remarkable 196% increase in profit before tax, soaring to ₦43.59 billion. This growth can be linked to the strategic operational efficiency, meticulous cost management, and agile response to the evolving financial sector. Wema Bank’s robust strategic framework emphasises revenue expansion and optimisation of operational processes, achieved through streamlining operations and leveraging technology.

    According to the report, the bank showed strong financial performance, with a 56% increase in total assets to ₦2,240.06 billion and a 60% surge in customer deposits to ₦1,860.57 billion.

    This asset growth allows for more lending, investment in digital infrastructure, and improved service quality, reflecting the bank’s strategic foresight and operational efficiency, showcasing its ability to judiciously allocate resources to areas promising the highest returns and customer satisfaction.

    Also worthy to note is Wema Bank’s gross earnings soared by 72% to reach N225.75 billion in FY 2023, up from N131.08 billion in FY 2022. This significant increase is a testament to the bank’s robust revenue-generating capabilities and its ability to capitalise on market opportunities. It is reflected in its diversified income streams and effective execution of business growth strategies, encompassing both interest and non-interest income underpinning the bank’s financial resilience and adaptability in a dynamic economic environment.

    Net interest income, which represents the difference between the revenue generated from a bank’s assets and the expenses associated with paying out its liabilities, witnessed a 69% jump to N91.62 billion. Concurrently, interest income grew by 74% to N184.48 billion. These increases underline the bank’s effectiveness in asset-liability management and its capacity to generate income from its core lending activities, benefiting from a favorable interest rate environment and a growing loan portfolio. The bank’s proactive lending strategies, coupled with an uptick in demand for credit in key sectors of the economy, contributed to this increase in interest income. Moreover, Wema Bank’s strategic investments in high-yield government securities have further bolstered its interest income, reflecting a prudent approach to asset management and income generation.

    Wema Bank’s non-interest income witnessed a significant climb of 65% to ₦41.27 billion, driven by an exceptional performance in fees, commissions, and other innovative banking solutions. This surge underscores the bank’s strategic diversification of its revenue base beyond traditional banking services. A substantial contributor to this growth is the bank’s investment in digital innovation, especially through its ALAT platform, which has not only attracted a new customer base but also enhanced transaction volumes across digital channels. By adopting a digital-first approach, Wema Bank effectively meets the evolving needs of the modern banking customer, paving the way for increased non-interest income through digital transactions.

    Furthermore, the bank has intensified its focus on expanding trade finance operations and offering tailored banking solutions to corporate and SME clients. These efforts have enriched its non-interest income streams, as these services are critical in facilitating international trade and stimulating economic activity. The heightened demand for such services has significantly contributed to the bank’s revenue, marking its success in broadening its revenue base with digital banking services, transaction fees, and other innovative products that resonate well with customer needs.

    Wema Bank’s operating income saw a substantial growth of 65%, reaching N122.33 billion. This surge is indicative of the bank’s exceptional operational efficiency and its adeptness at scaling revenue significantly without a corresponding increase in operational costs. Such an achievement highlights the bank’s focus on maximising profitability while ensuring sustainable growth.

    The increase in operating income is a direct reflection of Wema Bank’s strategic initiatives aimed at enhancing its revenue-generating capabilities. Central to this success has been the bank’s investment in digital innovation and the expansion of its product offerings. By tapping into the digital banking space with products like the ALAT platform, Wema Bank has not only attracted a broader customer base but also streamlined its operations, leading to increased efficiency and reduced cost-to-income ratios.

    Read Also: Wema Bank records 196% rise in PBT from N14.7b

    Despite the remarkable increase in operating income, the bank did experience a rise in operating expenses, which grew by 32% to N78.74 billion. While this increase is noteworthy, it falls below the growth rate of the bank’s income, showcasing Wema Bank’s strategic and careful management of costs. This controlled rise in expenses underscores the bank’s prioritisation of investments that yield significant returns, particularly in technology and customer service enhancements.

    The bank’s deliberate investment in technology has been a critical factor in managing operational costs effectively. By automating processes and enhancing digital channels, Wema Bank has reduced the reliance on traditional, cost-intensive banking methods. This not only improves operational efficiency but also positions the bank as a forward-thinking institution in Nigeria’s competitive banking landscape.

    Moreover, the focus on customer service enhancements has played a pivotal role in sustaining the bank’s growth. Investments in this area have led to improved customer satisfaction and loyalty, which, in turn, drives revenue growth through increased customer engagement and transaction volumes. The bank’s ability to offer superior customer experiences while managing costs effectively is a testament to its strategic foresight and operational excellence.

    Net loans and advances to customers increased by 54% to ₦801.10 billion which is a clear indication of the bank’s commitment to fostering economic growth by providing the necessary capital to support a wide array of ventures, from small businesses seeking to expand their operations to individuals aiming for personal financial goals. Beyond enhancing the bank’s interest income, this strategic move serves a dual purpose. Firstly, it contributes significantly to economic development by injecting capital into critical sectors that drive growth, such as manufacturing, agriculture, technology, and retail. By supporting these sectors, Wema Bank plays an instrumental role in job creation, innovation, and the overall economic resilience of the community it serves. Secondly, this increase in lending demonstrates Wema Bank’s confidence in the Nigerian economy and its potential for growth. It signifies a robust risk management framework that enables the bank to identify viable ventures and provide them with the necessary financial support. This approach not only secures the bank’s financial health but also establishes it as a key player in the economic advancement of Nigeria, capable of navigating through the challenges and seizing opportunities for growth.

    The impressive 69% increase in shareholder’s funds to N139.32 billion demonstrates the robust financial health of Wema Bank and its enhanced capacity to draw further investment. This rise is indicative of a solid accumulation of retained earnings, coupled with potential new capital infusions, serving as a clear marker of growing investor and shareholder confidence in the bank’s strategic direction and future potential.

    This financial milestone not only signifies the bank’s successful past performance but also positions it as an attractive option for future investors looking for stable and promising opportunities. The increase in shareholder funds bolsters the bank’s equity base, providing a stronger foundation for future growth and the pursuit of new ventures. It reflects a vote of confidence from the market, suggesting that the bank’s strategies for growth and its management’s execution capabilities are well-regarded by those with a vested interest in its success.

    This enhancement of the bank’s financial framework enhances its ability to withstand economic fluctuations and navigate the challenges of the banking industry with greater resilience. It empowers Wema Bank to explore strategic expansions and innovative solutions that require financial backing, ensuring it remains competitive and continues to meet the evolving needs of its customers.

    The bank’s Return on Equity (ROE) and Return on Assets (ROA) stands at an impressive 39.28% and 2.37% respectively, showcasing exceptional levels of profitability and asset utilisation efficiency. The remarkable surge of over 100% in these key financial ratios is a clear testament to Wema Bank’s escalating growth trajectory and its heightened proficiency in profit generation from its equity and asset base.

    The ROE figure, being significantly high, indicates that Wema Bank is effectively using its shareholders’ investments to generate earnings, a sign of strong management performance and operational efficiency. This level of ROE not only underscores the bank’s ability to deliver substantial returns to its investors but also highlights its competitive edge in the financial sector.

    On the other hand, the ROA ratio reveals the bank’s capability to efficiently convert its assets into net income. This is indicative of prudent asset management and effective cost control mechanisms within the bank, ensuring that its resources are being utilised in the most productive manner possible.

    The dramatic improvement in these ratios signifies a strategic accomplishment for Wema Bank, illustrating its commitment to optimising operational processes and maximising shareholder value. It reflects the bank’s success in navigating the complexities of the financial landscape, capitalising on opportunities to enhance profitability, and ensuring sustainable growth. This performance not only elevates Wema Bank’s stature in the industry but also builds trust and confidence among its investors and stakeholders, positioning it as a formidable entity in Nigeria’s banking sector.

    The 10% rise in net interest margin (NIM) and a 5% increase in yield on assets are significant indicators of Wema Bank’s strategic acumen in enhancing income from its interest-earning assets. These improvements are not merely numerical achievements; they are a testament to the bank’s skillful navigation of interest rate environments and its effective management of credit risk to bolster earnings.

    The enhanced net interest margin, which measures the difference between the interest income generated by the bank and the amount of interest paid out to lenders relative to its interest-earning assets, reflects Wema Bank’s ability to lend at higher rates while maintaining or lowering the cost of funding. This is a clear indicator of the bank’s efficiency in capitalising on its lending activities and optimising its interest income, a crucial component of its overall profitability.

    Together, these metrics underscore Wema Bank’s strategic positioning and its proficiency in leveraging its asset portfolio to maximise income. By effectively managing the interest rate environments and minimising credit risk, the bank demonstrates its commitment to optimising earnings and, by extension, delivering value to its stakeholders. This strategic focus on improving NIM and yield on assets further solidifies Wema Bank’s reputation as a financially sound and strategically adept entity in the competitive banking sector.

    In line with the bank’s robust performance, the board proposed a dividend per share of 50 kobo, up from 30 kobo in 2022, reflecting a commitment to rewarding shareholders and reinforcing the bank’s solid financial health. The proposed dividend is a testament to Wema Bank’s prudent capital conservation strategy and its forward-looking approach to sustaining growth and profitability.

    Beyond financial metrics, Wema Bank’s commitment to societal impact is evident through strategic partnerships and initiatives aimed at fostering community development and economic growth. Notably, its collaboration with the Federal Government to upskill two million MSMEs, along with its contributions to health, education, women’s empowerment, and the green economy, demonstrate the bank’s holistic approach to growth—one that integrates societal advancement with business success. These efforts not only enhance Wema Bank’s reputation but also reinforce its market position as a driver of positive change.

    Looking to the future, Wema Bank is strategically positioned to maintain its growth momentum. The bank plans to harness technology to broaden its service offerings and enhance operational capabilities further. The strategic decision to raise N40 billion in capital, pending final regulatory nods, is aimed at satisfying the Central Bank of Nigeria’s revised capital licensing requirements. This move is not just about regulatory compliance but about equipping Wema Bank to seize future growth opportunities and cement its leadership in the industry.

  • Wema Bank posts N2.61b half-year PBT

    WEMA Bank Plc has announced N2.61 billion Profit Before Tax (PBT) in its half-year unaudited results for the period ended June 30, 2019. The result is a significant increase from N1.81 billion posted in 2018.

    Commenting on the results, the banks Managing Director/Chief Executive Officer Ademola Adebise, said: “The financial performance of the bank in the first half of the year is largely in line with our expectations and our strategic aspirations.

    “Despite the prevailing tepid economic conditions with Gross Domestic Product growing slowly at slightly above two per cent, the bank has been able to grow deposits by 20.80 per cent and increase its loan book by 11.41 per cent.”

    According to him, the bank’s Loan to Deposit ratio (LDR) was above the new minimum threshold of 60 per cent with non-performing loans below five per cent.  Earnings increased by 27.47 per cent to N40.83 billion from N32.03 billion reported in first half of 2018 driven by double-digit growth in interest and fee-based income. profit before tax was N2.61 billion, a 43.64 per cent growth when compared to N1.82 billion reported in first half of 2018.

    Read Also: Wema Bank gets brand ambassador

    He said regulatory ratios remained above the required thresholds with Capital Adequacy Ratio (CAR) at 14.59 per cent and Liquidity Ratio at 34.81 per cent.

    “Within the 1st half of the year, inspired by the need for improvement of women and the society, the bank launched “Sara by Wema”, a community designed to support women to benefit from growth opportunities that help maximise their personal or business goals. Also, within the period, the bank had its first hackathon event, Hackaholics, to bring young Nigerian entrepreneurs together to solve problems using technology and to provide them with financial and business advisory services. ALAT, our flagship digital bank, now accounts for close to half-a-million customers on our platform.”

    Adebise further stated that “the economy is still not growing fast enough and there are concerns that the fragile recovery can be derailed if key structural reforms are delayed.”

     

  • Wema Bank names Adebise MD/CEO, Oseni DMD

    Wema Bank Plc has named Ademola Adebise as its Managing Director/Chief Executive Officer following the retirement of Segun Oloketuyi in September. Adebise was initially appointed the Acting Managing Director in July after Oloketuyi proceeded on terminal leave in July 2018.  He assumes the new role today.

    Prior to this appointment, he was the Deputy Managing Director of Wema Bank, a role he held since January 2017. Adebise has been part of the bank’s executive management team since 2009 and has played a pivotal role in the execution of the strategic turnaround plan of the bank. He has over 28 years’ experience in the banking industry (inclusive of four years in management consulting), and has worked in various capacities in Information Technology, Financial Control & Strategic Planning, Treasury, Corporate Banking, Risk Management and Performance Management.

    Before joining Wema Bank Plc. Adebise was the Head, Finance and Performance Management Practice at Accenture (Lagos Office), where he led multiple successful projects for banks in Business Process Re-engineering, Information Technology and Risk Management.

    A member of the Board of Directors for AIICO Insurance Plc, AIICO Pensions, Nigerian Interbank Settlement System (NIBSS), and Wema Bank Plc., Adebise is an alumnus of the Advanced Management Programme (AMP) of the Harvard Business School and a holder of a Bachelor’s degree in Computer Science from the University of Lagos. He holds a Master of Business Administration (MBA) from the Lagos Business School. He is a Fellow of the Institute of Chartered Accountants of Nigeria ICAN and an Honorary Member of the Chartered Institute of Bankers.

    Wema Bank has also appointed Moruf Oseni as its Deputy Managing Director, with effect from today. Since joining the Wema Bank board in 2012, Oseni has contributed to growing the bank’s retail business. Until his appointment, he was the Executive Director in charge of Retail, managing assets, including ALAT, Nigeria’s first digital bank.

    Both appointments have been ratified by the Central Bank of Nigeria.

    “In Ademola and Moruf, the bank has two finance veterans with a wealth of experience in senior executive positions across several countries,” said Babatunde Kasali, the Chairman of Wema Bank.

    “With their proven track record in the financial services sector, the board is confident that their appointments will lead to the continued transformation of the Bank as it positions itself as a market leader in Nigeria’s retail banking segment through technology and innovation.”

    Oseni brings a wealth of banking and non-banking experience to his new role. Before joining Wema Bank, he was the CEO of MG Ineso Limited, a principal investment and financial advisory firm. Prior to MG Ineso, he was a Vice President at Renaissance Capital, where he was responsible for capital markets origination and execution for Sub-Saharan African corporates and financial institutions. He was also an Associate at Salomon Brothers/Citigroup Global Markets in London, where he was involved in debt capital markets origination for European financial institutions.

    Oseni holds an MBA from the Institut European d’ Administration des Affaires (INSEAD) in France, a Masters in Finance (MiF) from London Business School, London and a BSc. in Computer Engineering from Obafemi Awolowo University (OAU), Ile-Ife. He is also an alumnus of King’s College, Lagos.

    Oseni is a member of the Institute of Directors (IoD), an Honorary Senior Member of the Chartered Institute of Bankers of Nigeria (CIBN) and a member of Nigerian Institute of Management (NIM). He serves on the board of Continental Broadcasting Services Limited and is a member of the Lagos State Economic Advisory Committee.

  • Wema Bank promotes MSMEs growth

    Wema Bank Plc has reiterated its commitment to supporting Micro, Small and Medium Enterprises (MSMEs) growth and development.

    It has been passionate about supporting micro, small and medium sized businesses in Nigeria. But over the last six months, it has reviewed the way it backs MSMEs by delivering sustainable and value-adding support that impacts positively on business growth and profitability.

    One of these offerings, the My Business Account Suite, was recently reviewed to improve cost effectiveness and deliver maximum convenience. It is a current account product with a concessionary transaction fee and ‘Zero Account Maintenance Fee’ for Startups and medium-sized businesses. Businesses can also earn interest on funds domiciled in this current account.

    The bank is also bringing businesses together for capacity building programmes, designed to enhance structuring and spur growth. In July, the Bank sponsored several small and medium scale businesses to a session on building sustainable wealth, organised by PwC in Lagos. The training featured experts from key growth sectors as well as business managers and successful entrepreneurs.

    Discussions and insights were shared, and these experts touched on critical aspects of business building including bookkeeping and accounting to tax efficiency, raising funds for business and much more.

    Though these training and product offerings help, funding remains critical to growth, particularly for MSMEs. Access to cheap funding continues to limit the ability of small businesses in Nigeria to scale adequately. This narrative can be changed with the new partnerships Wema Bank has entered.

    The bank recently entered into partnerships with Development Bank of Nigeria (DBN) to improve access to cheaper funds for small businesses. DBN is a licensed wholesale Development Financial Institution (DFI) set up by the Federal Government in collaboration with other international development partners to alleviate the financing constraints of the MSMEs.

    DBN will fund MSMEs through Participating Financial Institutions (PFIs). Wema is one of those selected. Through this partnership, MSMEs and commercial businesses may get N153 million and N610 million.

    Wema Bank also recently secured $35 million from the African Development Bank (AfDB) and ICD to fund small businesses.

  • Model demands N75m from Wema Bank for alleged copyright infringement

    Model demands N75m from Wema Bank for alleged copyright infringement

    An American-based Nigerian model, Nneoma Anosike, has sued Wema Bank plc at a Federal High Court in Lagos for alleged infringement of her  intellectual property.

    The plaintiff, who is a 2014 brand Ambassador of Pepsi Cola Nigeria, sued through her father, Mr Frank Anosike, as lawful attorney, claiming N75 million against the bank as general damages for passing off her services.

    She is also claiming N20 million as damages for breach of her privacy by the bank advertising her photograph without her consent.

    Nneoma is also seeking a public apology from the defendant to be advertised in national dailies which circulate in the U.S and Nigeria.

    The plaintiff is further claiming two million naira as special damages of cost of action.

    Besides, she is seeking the court’s declaration that she is entitled to her privacy and those of her correspondences, under Section 37 of the 1999 Constitution of Federal Republic of Nigeria.

    At the resumed hearing of the case on Tuesday, the sole witness for the plaintiff, Anosike, continued his examination in chief.

    Led in evidence by his lawyer, Mr Gideon Okebu, the witness told the court that his daughter entered into a three-year management contract with an international firm, Ford Model Incorporated, New York, in 2014.

    He said that the plaintiff was granted a U.S. Visa through the instrumentality of Ford, following which she travelled from Nigeria to the U.S. to continue her career solely under Ford.

    According to the witness, on April 11, 2016, his daughter was requisitioned to attend a meeting with the board of Ford where she was presented with photographic advert of her picture from Instagram, which was photo-edited by Wema Bank and further advertised on its  website.

    He said that his daughter’s picture was used for the advert with the bank’s corporate logo beside her face and the words, “Be yourself, Everyone else is taken”.

    According to him, this projection of Nneoma by the bank was with the aim of projecting the bank’s value and goodwill using her fame and popularity.

    He told the court that the defendant’s action constituted a breach of Nneoma’s agreement with Ford Model, as it had caused her a retraction of contract extension by the firm.

    Justice Ibrahim Buba adjourned the case until Nov. 20 for cross examination of the witness.

    NAN

  • Efficent banking, good global rating

    Efficent banking, good global rating

    Wema Bank Plc’s strong risk management culture, low non-performing loans exposure and good liquidity levels are its strong assets. Fitch Ratings of the bank’s Long-term National Rating at BBB- despite the challenging macro-economic environment reinforces the creativity and efficiency it brings to its transactions. The agency’s report reflects the bank’s stable outlook and promising future, writes COLLINS NWEZE.

    It was a piece of news that caught the interest of financial sector analysts. But for those conversant with developments at Wema Bank, the report by Fitch Ratings, a global leader in credit ratings and research, affirming the bank’s Long-term National Rating at BBB-, was deserved.

    The bank kept its head high at a time others are struggling with low liquidity ratios and high non-performing loans (NPLs) triggered by falling crude oil prices, rising foreign exchange (forex) crisis and challenging macro-economic environment. The bank, which has a national banking licence, was not the only local lender assessed by Fitch Ratings but it was among the few that got positive feedback from the agency.

    The agency had also affirmed the Long-Term IDRs of Zenith Bank Plc, Guaranty Trust Bank Plc (GTBank), Access Bank Plc, United Bank for Africa Plc (UBA) and Bank of Industry (BoI).

    Wema Bank’s strengths, which underpin its long and short-term ratings, include its strong risk management culture, low NPLs exposure and good liquidity levels. The bank’s affirmed rating further reinforces its resolve to remain an efficient bank, driven by innovation and technology.

    Wema Bank’s Managing Director Segun Oloketuyi described the bank’s positive rating as an affirmation of its continued transformation, risk culture and positioning, as one of the major players in the retail banking landscape.

    Besides, the rating agency affirmed Wema Bank’s Viability Rating (VR), showing a stable outlook. The Long-term Issuer Default Ratings (IDR) of Wema Bank also remains stable at B-, as the rating is driven by the bank’s VR even as Wema Bank does not expect any material change in its intrinsic creditworthiness.

    In Fitch’s opinion, the industry would remain challenging no thanks to low oil prices, continued disruptions in oil production and constraints regarding the forex liquidity. As such, the industry could witness a rise in NPL ratios, though Fitch expects banks to remain profitable in 2016.

    The bank chief said despite the challenges in the economy and in the industry, the lender remains optimistic about its future. “Our retail focus is beginning to yield good numbers and we are already ramping up efforts to ensure that we deliver on the promises to our stakeholders. In addition, the journey to lead the digital landscape is critical as it will propel us to the front of the industry,” he said.

     

    Wema goes for new capital

    With this positive rating, Wema Bank was able to approach the bond market for N50 billion Tier-2 capital. The fund was expected to be deployed in deepening its market penetration and profitability, Oloketuyi said in Lagos.

    The bank chief said N20 billion would be raised in the first tranche while the balance  would come in the near future.

    “We will increase the drive of the ongoing cost containment initiatives and leverage on technology to increase efficiency across our channels and platforms. The bank will also be raising additional debt capital to further give it the necessary leverage to drive growth,” he said.

    Continuing, he said: “We are doing debt capital. It is a Tier-2 capital and it is a bond. The bond is a N50 billion issuance programme, but we are doing it in two tranches. The first tranche is N20 billion, and the second tranche is N30 billion. So, we are taking N20 billion first, and sometimes in the near future, and as the need arises, we will take on the balance of N30 billion,” he said.

     

    More details of the offer

    According to the subscription prospectus, the bonds are guaranteed and are direct, unsecured and unsubordinated obligation of the issuer and rank side by side without  preference among themselves and equally with the claims of all holders of unsubordinated indebtedness as provided for in the Series 1 Trust Deed.

    It said in case of the winding-up of the issuer, the claims of the trustee and the holders of unsubordinated notes against the issuer for payment of principal and interest in respect of the unsubordinated notes would be senior to the subordinated indebtedness of the issuer.

    It added that the bonds are backed by an undertaking issued by Wema Bank in favour of the trustee for bondholders supporting all the obligations of the Issuer under the programme. Besides, the bonds are exempted from taxation in accordance with the Companies Income Tax (exemption of bonds and short term government securities) Order 2011, the Value Added Tax (exemption of proceeds of the disposal of government and corporate securities) Order 2011 and the Personal Income Tax (Amendment) Act 2011.

    As such, all payments made to bondholders shall be free without deductions.

    Oloketuyi said the bank has witnessed a turnaround since the new management took over in June 2009, adding that before the coming of the new management, the lender had a negative capital position of N45 billion, with the lender virtually on its knees. He said the new management had grown the bank’s shareholders’ funds to N46 billion.

    He said the lender previously had less than one per cent market share, and ran on obsolete technology, while NPLs stood at 89 per cent. But with the new management, the NPLs have dropped to 2.9 per cent while profitability has risen to new heights.

    “So, we had to start to look at what to do with the bank and, therefore, developed a containment strategy focusing on how to stabilise the bank. The periods of 2010 to 2014 was largely used to give life back to the bank. So, the first major assignment we had to do were to secure the regulatory capital. We had to recapitalise the bank, which we did,” he said.

    Wema Bank boss said the lender received the Central Bank of Nigeria’s (CBN’s) final  nod to convert from regional to national bank. The bank, he added, is also driving its growth with new products and technology.

     

    Gross earnings soar

    Wema Bank Plc announced 16.36 per cent growth in gross earnings to N37.89 billion for the third quarter ended September 30, this year. The figure was an improvement from N32.57 billion recorded in the same period last year.

    The bank’s nine-month figure was driven by a 20.12 per cent and 16.79 per cent growth in interest income and fees and commission income.

    Oloketuyi said the lender’s third quarter result showed modest improvement in operating indices despite the slowdown in the operating environment.

    The bank chief also gave further insight into the numbers, adding that the domestic environment remained largely strained, as the country’s last August manufacturing and non- manufacturing Purchasing Managers’ Index (PMI) data continued to show underperformance(s) at 42.1 index points and 43.7 index points.

    He said inflation maintained an upward trend from 17.6 per cent (August 2016) to 17.9 per cent (September 2016), though at a slower pace (May to September 2016), as rising interest rate and foreign exchange illiquidity continue to impact prices.

    “Despite the harsh operating environment, Wema Bank continues to record growth, as gross earnings increased by 16.36 per cent to N37.89 billion from N32.57 billion in the same period last year. The bank optimised its balance sheet, as loans to customers rose by 20.78 per cent to N177.01 billion with interest income expanding by 20.12 per cent to N31.93 billion compared to last year while fees and commission increased by 16.79 per cent to N4.41 billion,” he said.

    According to Oloketuyi, his lender maintained its commitment to innovation, introducing *945# and other digital initiatives.

     

    Etisalat partnership on WemaEasySavers

    Wema Bank and Etisalat Nigeria last week partnered to introduce WemaEasySavers, a Tier-1 savings account, aimed at ensuring financial inclusion for more Nigerians, especially the youth.

    WemaEasySavers is easy to open, designed to enable youths to achieve their financial goals using their mobile phones.

    This partnership will enable Wema Bank’s new drive to expand its presence in the youth market and form a strong part of Etisalat’s commitment towards driving the achievement of the Federal Government’s financial inclusion goal. The bank, which recently launched its USSD banking code *945#, is seeking to leverage the market-wide acceptance of the product and Etisalat’s strong appeal in the youth market to bring on board new customers using a unique code *945*10#.

    Etisalat Nigeria Chief Executive Officer, Matthew Willsher, said other African countries are far into financial inclusion and the WemaEasySavers remains a milestone and a step forward in getting more people into the financial system.

  • Wema Bank’s winning model

    Wema Bank’s winning model

    After spending six years as a regional bank, Wema Bank Plc has stepped up to compete at the national level, and not even the current economic crisis can stop it from winning, it seems.
    In 1945, as the Second World War grinded to a bitter halt and much of the world struggled with momentous human and economic losses, Nigeria’s first indigenous financial institution, Wema Bank, was formed.
    The bank became a symbol of Nigerian Renaissance in a period of global distraught, which would culminate in economic and political independence of the nation 15 years later. Seventy-one years later, Wema Bank is repeating that feat. The financial institution is rising again at a time when everything – the Nigerian economy and the global businesses environment – seem to be going the other way.
    It began last year when, after spending seven years as a regional bank, the bank stepped up to compete at the national level, and it has continued this year as it steadily grows in balance sheet size and profitability despite the current economic challenges facing the country.
    Wema Bank is Nigeria’s oldest indigenous financial institution. It is also widely reputed as the most resilient Nigerian bank, a reputation that was put to test in the early and mid-2000s as the bank suffered its worst ever internal crisis. In 2009, Wema began its bounce back.
    It started with the reconstitution of the bank’s board, which saw seasoned banker Mr. Segun Oloketuyi take over as the Group Managing Director, and continued in 2011 with the strategic repositioning of the Bank to operate with a regional license covering South-South Nigeria, South-West Nigeria, Lagos and Abuja.
    Last year, the bank consolidated its rebound when it was granted a national license by the Central Bank of Nigeria.
    “Six years ago, we took a decision to refocus the bank’s operations on its areas of strength and build a sustainable institution,” said Oloketuyi following the Wema bank’s receipt of its national license in 2015. “We took advantage of the new licensing regime and applied for a regional authorisation with a pledge to expand in the near future, once the turnaround project was completed.
    The bank’s transformation was implemented in three phases; first to stabilize the Bank, second to prepare the building blocks for growth and third to go for growth. We are now within the third phase of the transformation project,” Oloketuyi enthused. Thus far, project growth seems to be going great.
    In its 2016 half year financials, Wema bank reported an 11 per cent rise in profit and a 15 per cent rise in turnover. It is the best performance by any Nigerian bank this year (among those who have declared their half year results). The bank delivered an impressive Interest income of N20.2 billion, a 15.2 per cent increase from N17.5 billion in first half 2015, while its fee and commission income rose by 42.3 per cent, from N2.2 billion in H1 2015 to N3.1 billion in H1 2016. The bank also enjoyed a 13.7 per cent growth in total assets, from N344.64 billion in first half 2015 to N391.76 7690 in first half 2016. Operating expenses only grew by 2.7 per cent, much lower than year-to-date inflation rate of 13.26 per cent; a testament to the bank’s disciplined and innovative approach towards keeping cost of doing business low.
    “The 2016 financial year has been characterized by deceleration on a number of economic indicators coupled with increasing energy costs, intensified by rising inflation, all within a tough operating environment,” said Oluketuyi following the release of Wema Bank’s half year financials.
    “In spite of these challenges, Wema Bank has been able to deliver a modest improvement in the first half of the year. We commence the second half of the year with a sense of cautious optimism; well aware that the economic fundamentals point to an economy heading for further slowdown, yet hopeful that additional fiscal initiatives will be implemented to stimulate growth.”
    Wema bank’s growth has not just been in terms of balance sheet size and return on equity. Its branding – a fine blend of aged experience and youthful vigour – is also gaining strength. The bank revitalized its hallmark colour purple, explaining the shade to reflect an organization that is unique, cool, modern and welcoming. And it also has a new logo, a “W” made of intersecting lines, which depicts the continuous connection between the bank and all of its Stakeholders, from the Staff to the Management and Board of Directors, and from the Customers to its Shareholders and all other groups in its business community. As is often the case, these seemingly little things do matter a great deal, as proven by the remarkable success of the bank’s *945# campaign.
    From the 14th of July to the 6th of August, Wema Bank ran a 945 game show to promote its USSD banking product, *945#. Unlike most game shows in the country, it was exclusively streamed live on Facebook. It involved any Nigerian who opened a bank account with *945# or existing customers who used the USSD service to purchase airtime, transfer money or to access several other basic banking services. These customers stood a chance to win 90,000, 40,000 or 50,000 if their mobile number was randomly picked up during the 945 game show. Over six dozen customers won the lottery.
    It’s a very tough job for any bank to keep up with the digital revolution rapidly transforming the financial service sector, but Wema Bank is gunning for more; it wants to lead the curve. The bank’s growing E-banking platform includes a revamped, feature-loaded and constantly updated mobile banking application, innovative SMS and USSD Banking products which do not require token, mobile data or internet connection to complete transactions and an internet banking platform which gives users real-time access to their account from any internet-enabled computer or device.
    Wema Bank’s Debit, Credit and Prepaid Cards are also secured with ground-breaking Card Control features to customers, which allows them enable or disable their card anytime, anywhere, via the WemaMobile Banking Suite app or SMS. The latest in Wema Bank’s innovative offerings is BuxMe, an app (currently running only on Android) that allows users to send money to email addresses and phone numbers.
    “Strengthening our digital offering and optimizing our value added services across all customer touch points is central to how we will win the 21st century battle in the financial services sector,” enthused Onome Odili, Wema Bank’s head of Brand and Marketing Communications.
    Wema’s Winning Model is in many ways built on its experiences from the challenges of the last decade. It is encapsulated in the Bank’s Project LEAP, a growth strategy adopted by the bank which narrows its focus to opportunities that provide great potential for business growth and increased profitability.
    This month, Chief Financial Officer Tunde Mabawonku said the Bank plans to issue 20 billion naira ($63 million) in bonds. “We expect to open in a couple of weeks. We are awaiting final regulatory approvals and we expect to conclude the process this quarter,” Mabawonku toldReuters news agency.
    For industry watchers, the bonds – issued to raise capital for further expansion – is an indication that Wema’s winning model is working. And for bookmakers and history watchers, it is a sign that a serial odds breaker is at it again.
    Eyiuche, a banking sector analyst, lives and works in Lagos.