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Tag: Wema Bank

  • Wema Bank gets $70m facility to boost trade

    Wema Bank gets $70m facility to boost trade

    Wema Bank said on Monday it had secured $70 million from foreign lenders to finance trade and lending to small-scale businesses.

    The mid-tier lender said in a statement $50 million would go towards financing trade, while the remainder would help support lending to small businesses.

    Nigeria’s economy is booming, but businesses are often constrained by a lack of credit and punitive interest rates, Reuters says.

    Wema said in April it had swung to a pretax profit of 591 million naira ($3.6 million) in the first quarter from a loss of 853 million naira in the same period a year before.

  • Wema Bank secures $70m facility from foreign banks, DFIs

    Wema Bank secures $70m facility from foreign banks, DFIs

    Wema Bank has secured $70 million facilities from foreign correspondent banks and Development Finance Institutions (DFIs) to support its operations.

    Over $50 million of the loans came from the bank’s foreign correspondent banks, while the remaining $20 million loan was from Development Finance Institutions (DFIs).

    In a statement yesterday, Wema Bank said the $20 million DFIs fund would be deployed in funding Small and Medium Enterprises (SMEs) among others in the country.

    The lender said by obtaining the loans, it has reaffirmed its capacity to handle large international trade transactions, provide necessary finance and support for SMEs while also underscoring the confidence of foreign financial institutions in its risk management systems.

    Wema Bank reaffirmed that it was committed to providing value for its customers while also giving financial support to various sectors of the economy, especially the SMEs sub-sector.

    The lender’s recent return to profitability has been hailed as outstanding by industry watchers and investors, given the challenges faced before the new management came on board.

    However, the management’s commitment to the transformation process it put in place has been hugely successful and has seen it return to profitability within four years while also instituting sound corporate governance and risk management frameworks in the process.

  • Wema Bank gets April deadline to restructure capital

    Wema Bank gets April deadline to restructure capital

    The Nigerian Stock Exchange (NSE) has given Wema Bank April 2014 deadline to restructure its capital to comply with the minimum requirement of 20 per cent free float of shares of companies listed on the main board of the NSE.

    Companies listed on the Exchange are required to maintain a minimum free float for the set standards under which they are listed to ensure that there is an orderly and liquid market in their securities. The free float requirement for firms on the main board is 20 per cent while companies on the second board, otherwise known as Alternative Securities Market (ASEM) are required to have 15 per cent free float.

    A report on free float deficiencies on the NSE obtained by The Nation indicated that Wema Bank is slightly under the 20 per cent free float with a free float of 19.64 per cent.

    According to the NSE, Wema Bank is expected to comply adjust its shareholding structure to free 20 per cent of its equities for unrelated shareholders by April 27.

    Free float, otherwise known as public float, refers to the number of shares of a quoted company held by ordinary shareholders other than those directly or indirectly held by its parent, subsidiary or associate companies or any subsidiaries or associates of its parent company; its directors who are holding office as directors of the entity and their close family members and any single individual or institutional shareholder holding a statutorily significant stake, which is five per cent and above in Nigeria.

    Thus, free float’s shares do not include shares held directly or indirectly by any officer, director, controlling shareholder or other concentrated, affiliated or family holdings.

    Stock markets maintain minimum public float to prevent undue concentration of securities in the hands of the core investors and related interests, a situation that can make the stock to be susceptible to price manipulation. Besides, it provides the public with opportunity to reasonably partake in the wealth creation by private enterprises.

    The NSE acceded to the bank’s request for extension, however, Wema Bank is required to provide quarterly disclosure reports to the exchange on the efforts being made to fully comply by the deadline.

    By the expiration of the deadline, Wema Bank is mandatorily required to have completed partial divestments or dilution of the ‘non-public’ shareholdings to free 20 per cent equity stake for public holding, unless the management of the NSE grants fresh waivers and extensions for the companies. In the extreme instance, a company with deficient public float may opt to delist its shares.

    Wema Bank said it is optimistic it will meet the deadline.

    Chief Financial Officer, Wema Bank, Mr. Tunde Mabawonku, said that the bank was expecting some of its existing investors to sell some of their holdings to free up additional float.

    “We expect some of our existing investors to free up some of their holdings as the market valuation improves; we believe we would achieve the minimum requirement for free-floating shares within an agreed timeline with the NSE,” Mabawonku stated in emailed response to The Nation.

    Other two companies with free float deficiencies included Dangote Cement and Union Bank of Nigeria Plc. The Nation had earlier reported that Alhaji Aliko Dangote, the core investor in Dangote Cement Plc and Union Global Partners Limited, the core investor in Union Bank of Nigeria Plc had been given deadlines to sell down their domineering equity stakes in the companies or issue new shares to the investing public to dilute their shareholdings.

    Dangote Cement(Dancem) has up till October, this year while Union Bank of Nigeria has up till June 2017 to comply with the free float. The updated free float record of the NSE indicated that Dancem has a free float of 4.93 per cent, 15.07 percentage points below the minimum required 20 per cent. Union Bank has a free float of 14.94 per cent, 5.06 per cent below the minimum standard.

  • Wema Bank to deploy N40b capital in loan expansion

    Wema Bank to deploy N40b capital in loan expansion

    Wema Bank Plc has said the N40 billion capital raised from shareholders will be channelled into growing its loan volume by over 60 per cent in the next few years.

    Its Chief Financial Officer (CFO), Tunde Mabawonku, said in an interview at the weekend that the lender is committed to growing its loan volume from N89 billion to between N150 billion and N160 billion over the next few years.

    He said managemnt is aware that the expectations of shareholders are extremely high, adding that management is committed to ensuring that such expectations are met. He disclosed that over 90 per cent of the new fund will be used as working capital.

    “We are not spending any money in terms of infrastructure or strengthening of Information Technology (IT) base because they are already in place. As we have got this money now, it will be strictly used for business. And in terms of business plan, our primary market simply remains the Southwest, South-south and the Federal Capital Teritory,” he said.

    He said last year was a challenging one for the lender as it was hampered by lack of capital and adverse effects of loan provisioning. “Those two factors affected our operations in 2012, we had very low capital and were unable to do as much business as we had wanted to,” he said.

    He explained that while that lasted, lending was slowed, but deposit mobilisation continued, adding that with the restrictions lifted, the lender is now on a path of growth.

    Mabawonku said while waiting for the new capital, the bank continued its aggressive deposit drive especially at the retail segment of the market. “Our idea is to go out and open as many accounts as possible and increase our deposit base,” he said.

    According to him, the bank has been able to clean up its loan book with its non-performing loans (NPLs) currently standing at three per cent from NPLs as high as 89 per cent three years ago. “We started pushing the NPLs down gradually, most importantly by putting in place proper structures of risk management. We are also interested in recoveries, but more so in good corporate governance. So, in 2010, we moved from 89 per cent to 56 per cent, to 18 per cent, 14 per cent and three per cent. And we believe we will not go above the three per cent mark in the nearest future,” he assured.

    He said the bank has strengthened its retail structure and workforce within the segment, adding that a customer could now walk into any branch of the bank and get loan approval within 24 hours.

    However, within such period, all the necessary credit checks on the account including the customer’s past loan history and credit rating will be analysed.

    The bank’s cost of funds, Mabawonku said is also impressive. “Our cost of funds in 2012 was 5.6 per cent and at the third quarter, it was 5.8 per cent. We believe that one of the ways to make profit is to reduce the cost of funds. We did not go into taking expensive funds, what we are doing is step by step retail growth,” he said.

    He reiterated the bank’s commitment to ensuring that its public sector deposit does not exceed 10 per cent of its deposit liability. “After the Central Bank of Nigeria (CBN) policy on public sector funds became effective, we began re-pricing our public sector funds. It hurts us that we lost some funds, but it is better to remain profitable than to be big and unprofitable. We intend to keep our public sector deposits below 10 per cent of our total liability,” he said.

    The CFO said the bank’s first priority remains providing superior returns to its shareholders, adding that in the last few years, the bank has been quiet, carrying out some internal restructuring on its processes, people and technology.

    He said the bank is not applying for national banking licence to operate in all parts of the country but in strategic areas, such as Kano, Kogi, Aba, Port Harcourt where its high-volume customers operate.

  • ‘AMCON not taking over Wema Bank’

    The Asset management Corporation of Nigeria (AMCON) on Wednesday dismissed as false, claims that it had taken over ownership of Wema Bank.

    Head, Corporate Affairs, AMCON, Mr Kayode Lambo said the corporation does not have any impact on Wema Bank’s normal business.

    AMCON he said was established to help revive and stabilise the Nigerian economy by effectively resolving the non-performing loan assets in the Nigerian banking sector.

  • ‘AMCON has not taken over WEMA Bank’

    The Asset Management Corporation of Nigeria (AMCON) has not taken over WEMA Bank, the Deputy Managing Director, Moruf Oseni, has said.

    He told The Nation that the management of the bank is intact, adding that there’s no takeover of any kind by AMCON.

    Oseni revealed that WEMA Bank has recapitalised to the tune of N40 billion, stressing that what AMCON has in the bank was just an investment and did not amount to a takeover.

  • SEC set to okay AMCON’s takeover of Wema Bank

    Securities and Exchange Commission (SEC) is considering final approval for application by Wema Bank Plc to source about N20.02 billion from the Asset Management Corporation of Nigeria (AMCON) in a transaction that will see the emergence of the government-owned bad-loan resolution company as the core investor in first generation bank.

    An impeccable source yesterday told The Nation that the apex capital market regulator was considering the final approval for the private placement that will technically round off the cash-for-equity deal.

    The source said the bank and other parties to the issue have complied with regulatory requirements with regard to the placement and there are indications that SEC might approve the transaction within the next few days.

    The Nation had exclusively reported that Wema Bank Plc was seeking fresh equity funds of more than N20 billion from AMCON, a move that may turn the bad-loan resolution company into the majority controlling investor in the bank.

    Regulatory filing indicated that Wema Bank will be issuing 14 billion ordinary shares of 50 kobo each to AMCON- a government’s bad loans refinancing company, at N1.43 per share. The special placement to AMCON will inject N20.02 billion equity funds into the bank.

    The application for the special placement has already been approved by the Nigerian Stock Exchange (NSE), according to the filing.

    The special placement will however make AMCON the majority core investor in the bank with a post-placement equity stake of 52.2 per cent. Wema Bank has 12.821 billion outstanding ordinary shares, which will increase to 26.821 billion shares after the issuance to AMCON.

    The special placement will displace the two current major investors in the bank-SW8 Investment Company Limited and Odua Investment Company Limited. While AMCON’s new issue will more than halve SW8’s majority stake of 24.29 per cent to 11.6 per cent, Odua’s current equity stake of 9.98 per cent will become unsubstantial at 4.77 per cent after the AMCON placement.

    Latest update indicated that Wema Bank, an old generation bank, has about 255,000 shareholders.

    Also, a reliable source said the new issue to AMCON was not a debt for cash or shares but a regular capital issue, underlining the equity injection into the struggling bank.

    The management of Wema Bank has said its low capital base has been major drag in the reengineering of the bank. Wema Bank posted a loss after tax of N5.04 billion last year. Its capital base stood at N1.76 billion by the period ended June 30, this year.

    “As the banking industry continued to adapt to the changing regulatory and economic policies and reforms, your bank remained focused on its core areas of expertise such as retail banking and commercial banking by further leveraging on existing business relationships in different industries of the economy. However, as a result of capital constraints; we were unable to fully exploit the enormous business opportunities in the economy,” management of the bank stated in its latest audited review.

    According to the bank, growth in the loan book was restricted last year due to regulatory constraints on lending as a result of the low capital adequacy ratios as it was only able to undertake certain renewals for loans and undrawn commitments.

    It noted the importance of the capital raising exercise to the future performance outlook, pointing out that the successful completion of the capital raising exercise will undoubtedly release the potential within the bank and thus make the 2013 financial year a successful year.

     

  • Two Wema Bank staff arraigned for fraud

    The Police in Lagos on Wednesday arraigned two staff of Wema Bank Plc before a Tinubu Magistrates’ Court, for allegedly defrauding the bank of N93.2 million.

    The police prosecutor, Insp. Chidi Okoye, told the court that the accused– Joseph Adeleye (32) and Bankole Alade (36) were clerks at the headquarters of the bank at Marina, Lagos.

    Okoye said the duo was facing a three-count charge of conspiracy, fraud and stealing.

    He said they committed the offence, with others at large, between November 2012 and July this year at the bank’s headquarters and at Emrey Hotel, Lagos.

    The prosecutor said the duo and their accomplices revealed the passwords of the “BSM and TOFT“ (banking software) of their branches to fraudsters.

    “The fraudsters gained access to Wema Bank Fund Transfer menu and transferred the above mentioned sum to various fraudulent accounts and also withdrew same within 24 hours.

    “Adeleye and Alade also revealed the Impute Override Menu and the Override Menu of the bank to the fraudsters, which they used to steal the said amount, using 18 different bank accounts, “the News Agency of Nigeria quoted Okoye as saying during the hearing.

    According to the police prosecutor, the account numbers used by the accused persons are – 0228590857, 0228600022, 0228556552, 0228646558, 0228261847, 0228661344, 0228451413, 0228738905, 0228624574,

    Others are: 0228620124, 0228688141, 0228747675, 0228676645, 0225920608, 0221550018, 0223528581, 0228578220 and 0224440459.

    He said the offences contravened Sections 409, 333 and 285 (6) of the Criminal Law of Lagos State, 2011.

    The accused persons, however, pleaded not guilty to the charges.

    If convicted, they face a maximum sentence of seven years imprisonment, if no other charges are considered.

    The Magistrate, Ms. Abimbola Awogboro, granted them bail in the sum of N5 million with two sureties in like sum each.

     

  • Wema Bank raises N40b to implement growth strategy

    Wema Bank raises N40b to implement growth strategy

    Wema Bank Plc has said its capital raising exercise had led to the injection of N40bn fresh capital into the company.

    As a result, the bank said it had initiated the process of implementing its strategic growth plan geared towards increasing market share and profitability over the next five years.

    The bank’s Managing Director, Mr. Segun Oloketeyi, said this at a press conference in Lagos, while giving highlights of the 2012 and the half year of 2013 financials.

    He said the management was awaiting the final regulatory approval from the Securities and Exchange Commission as regards the allotment of new shares created by the recapitalisation.

    The fresh funds, he said, were raised through the support of shareholders and other strategic investors via a private placement involving private and institutional investors.

    Oloketuyi, who outlined the bank’s growth strategy, said the transformation of the bank from a regional to a national bank would help it to consolidate on the gains of the past three years where the management had been able to strengthen the balance sheet and return to profitability.

    Highlights of the 2012 results show an 11 per cent rise in total asset from N221.1bn in 2011 to N245.7bn, 18.2 per cent rise in deposits to N174.3bn up from N147.4bn.

    Similarly net interest income grew by 17.5 per cent from N10bn to N11.7bn while net fees and commission income rose by 63.5 per cent from N2.9bn in 2011 to N4.7bn in 2012.

  • Wema Bank, Eterna, Aiico, 48 others risk N90m NSE’s fines

    The Nigerian Stock Exchange (NSE) has identified some 51 companies that are technically due for fines for failure to meet the deadlines for submission of their earnings reports, even after the extension of such deadlines.

    Up-to-date lists of companies in default of earnings filings obtained by The Nation indicated that some 30 per cent of quoted companies have failed to meet the final extended deadlines for the submission of their audited reports and accounts. This implies that more than two-thirds, 70 per cent, of quoted companies submitted their earnings reports within the extended window for earnings reports.

    It was showed that more companies might be sanctioned for failure to file their audited reports this year than the previous year. In its latest compliance status report, the NSE had reported that it slammed some N60.2 million as fines on 34 firms for failure to meet deadlines for 2011 audited reports. With a range of N3.8 million and N100, 000, average fine for the previous year was N1.77 million.

    The companies currently tagged for failure to submit their annual reports within extended deadlines included Wema Bank, the only banking stock with such tag; AIICO Insurance, Eterna, Union Homes Savings & Loans, Omatek Ventures, Vono Products, Resort Savings and Loans, DN Meyer and Beco Petroleum.

    There was also large concentration of defaulters in the troubled insurance subsector with not less than 25 insurance companies penciled down as defaulters. Besides AIICO, other defaulting insurance companies included African Alliance, Continental Reinsurance, Cornerstone Insurance, Custodian and Allied, Equity Assurance, Goldlink Insurance, Great Nigeria Insurance, Guinea Insurance, International Energy Insurance, Lasaco Assurance, Law Union and Rock Insurance, Linkage Assurance, Mutual Benefit Assurance, NEM Insurance, Niger Insurance, Oasis Insurance, Prestige Assurance, Regency Alliance Insurance, Sovereign Trust Insurance, STACO, Standard Alliance, Unic Insurance, Unity Kapital Assurance, Universal Insurance Company and Investment and Allied Assurance.

    Other defaulters included Nigeria Energy Sector Fund (NESF), Nigerian-German Chemical, Rak Unity Petroleum, PS Mandrides & Co, FTN Cocoa Processors, Big Treat, UTC Nigeria, Fortis Microfinance Bank, Conoil, Royal Exchange Nigeria, Starcomms, MTI, IPWA, Nigerian Wire & Cable, Capital Hotel, Ikeja Hotel, Daar Communications and MTECH Communications.

    The NSE usually sanctioned earnings report defaulters in line with the provisions of Section 14 of Appendix 111 of the Listing Rules of NSE. Most of the firms tagged were also fined in the previous year.

    The lists also indicated that nearly three-quarters of quoted companies failed to meet the deadlines for their first quarter earnings reports for the year. However, NSE had not applied sanctions on defaulters for interim reports, although it maintains a deficiency tag on each stock that defaults to alert investors on the corporate governance and compliance status of the company.

    Post-listing rules at the NSE require that quoted companies should submit their reports, not later than three months after the expiration of the period.

    Most quoted companies including all banks, major manufacturers, oil and gas companies, breweries and cement companies use the 12-month Gregorian calendar year as their business year. The business year thus terminates on December 31.

    NSE’s regulatory filing calendar indicates that the deadline for submission of annual report for companies with Gregorian calendar business year is March 31. However, the NSE provides that where a filing due date falls on a weekend or holiday, the filing will fall due on the next business day. March 31 fell on Sunday while April 1 was a public holiday in commemoration of Easter Monday, thus the due date for the deadline was Tuesday, April 2, 2013.

    However, the NSE had extended the regular deadline for all quoted companies by 30 days as a general concession in recognition of challenges being faced by companies, especially with regards to adoption of the International Financial Reporting Standards (IFRS).

    The extension had came a day after The Nation exclusively reported that banks’ results might fell below earnings report due date of April 2, due to issues around IFRS and Central Bank of Nigeria’s (CBN’s) approval.

    According to the NSE, the extension was an intervention to ensure listed companies present their audited and interim reports accurately as well as provide assurance to businesses and advisors affected by the early adoption of IFRS and levels of regulatory approvals which now includes Financial Reporting Council (FRC).

    The NSE had indicated that it would not apply the tag of Below Listings Standard (BLS) on the names of the companies nor impose fines on them during the extended period.

    “While we believe that the timely disclosure of financial information is critical to stakeholders in the capital market as well as investors, the challenges which the entities are facing are germane. It is in view of the extenuating circumstances that the Exchange is granting all listed companies an extended filing date of 30 days from the due date of the required periodic financial submissions,” General Manager, Legal and Regulation Division, Nigerian Stock Exchange (NSE), Ms. Tinu Awe, had said.

    NSE tags and applies fines on companies that fail to meet earnings reports’ deadline. Under the corporate governance and rules compliance assessment report known as X-Compliance Report, NSE identified four different kinds of tags or symbols to alert investors about the status of each quoted company. These included below listings standard (BLS), the first degree alert level indicating a company that has not complied with post listing rules such as late submission of financial statements, unauthorised publication, management failures among others.

    Also, financial services companies such as bank and insurance companies awaiting regulatory approval will carry the appropriate symbol of awaiting regulatory approval (ARA). Companies that are undergoing a capital reconstruction exercise including supplementary issue, share buyback, split, share reconstruction among others will be tagged with capital reconstruction exercise (CRE) while companies that have indicated that they will be delisting or companies that are being delisted at the instance of the regulator would be flagged with delisting in process (DIP) symbol.