Wema Bank mulls acquisition, to raise N40bn through rights issue in September

Wema Bank Plc says it is considering the acquisition of a fintech firm or a merger with another commercial bank.

Speaking on Friday in Lagos during the company’s half-year 2021 investors/analysts presentation, Moruf Oseni, the bank’s deputy managing director, said a merger and acquisition (M&A) was part of the bank’s plan to ensure organic growth.

Oseni said the acquisition is not limited to the financial sector space.

“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,” NAN quoted Oseni as saying.

“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.”

Oseni also announced Wema Bank’s plan to sell shares to existing shareholders to raise additional capital of N40 billion by September.

He said the capital raise would give the bank an expanded base of business over the coming years to compete favourably in the industry.

“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,” he said.

He said the bank would embark on a road show from next week to sensitise shareholder groups and associations on growth plans and capital raise.

Oseni explained that the bank would reduce its shares in issue before embarking on the rights issue to ensure enhanced growth for shareholders.

“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,” Oseni said.

“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.”

In its half-year unaudited financial report, the Bank posted a pre-tax profit of N4.30 billion, a 149 percent growth.

It also recorded N39.82 billion as gross earnings from N37.95 billion posted in the first half of 2020.

On Friday, the Bank’s shares dipped by 2.3 percent to N0.87 on the Nigeria Exchange Limited (NGX).