Kayode Tokede
Wema Bank Plc has commenced its rights issue to raise about N39.95 billion from its existing shareholders.
According to information obtained by THISDAY, subscription for the rights issue commenced on Monday, December 11, 2023, and will conclude on Friday, December 29, 2023.
The financial institution is offering a total of 8,572,103,573 ordinary shares of 50kobo each at N4.66 per share on the basis of two shares for every three shares held as at September 28, 2023
This amounts to N39.95 billion rights issue.
The stock price of Wema bank closed yesterday at N5.19 per share, meaning that a shareholder who partake in the exercise is getting it at a discount of N0.53 per share.
The stock price of Wema bank opened for trading this year at N3.90 per share and it has gained N1.29 per share or 33.1per cent Year-till-Date (YtD) growth.
Interested shareholders would be able to partake in the rights issue by taking up two new ordinary shares for every three ordinary shares held as of the close of business on September 28, 2023.
The shares to be taken up by qualifying investors will rank pari-pasu in all respects with the issued ordinary shares of Wema Bank.
The lead issuing house for the transaction is Greenwich Merchant Bank, while the joint issuing house if Qualinvest Capital Limited.
The Executive Director, Retail and Digital Business, Mr. Tunde Mabawonku who was the Chief finance officer of the bank had said the bank would utilise the raised capital to drive growth phase for the bank and accelerate improvements in the share price, deepen value creation, increase credit creation, increase digital play with technology acquisition and increase geographic expansion.
“Others include deploy one stop digital platform to strengthen digital play for the bank, increased customer acquisition and retention in the youth, SME and financial excluded segments and include valuation of financial services business because of improved size,” Mabawonku said.
The lender is expected to utilized 67.94 per cent of the funds from the exercise to deepen its retail and commercial loan portfolio for 13 months, 21.88 per cent to be used by the bank to increase its lending capacity to the SME sector for 15 months, 8.21 per cent would be earmarked to improve IT infrastructure to strengthen the company’s digital play (ALAT) for 10 months, while 1.97 per cent would be used for the rights issue as processing fees.
Amid domestic and external macroeconomy challenges, Wema Bank continued to sustained its growth trajectory in 2023 unaudited result & accounts and it is expected to surpassed analysts, and shareholders expectation in the year under view.
The Nigeria’s first digital bank has continued its growth trajectory and momentum across all key performance indicators and it is poised to shareholders return and stock price appreciation.
Wema Bank hits all-time high in profit before tax and profit in third quarter (Q3) ended September 30, 2023, driven by 59.08 per cent increase in gross earnings, and 168.53 per cent growth in other income.
Targeting N22.5billion profit before tax in 2023 financial year (FY), Wema Bank reported N22.15billion in Q3 2023, an increase of 133.86per cent from N9.46 billion reported in Q3 2022.
The financial institution in 2022FY performance declared N14.88billion profit before tax from N12.28billion in 2021FY. In 2020FY, it reported N5.93billion profit before tax from N6.76billion in 2019FY and N4.8billion profit before tax in 2018FY.
Profit after tax also increased significantly in Q3 2023 to N18.88 billion from N8.19billion in Q3 20222, another milestone achievement for the current management of Wema Bank.
In 2022FY, Wema Bank declared N11.35billion profit, representing an increase of about 27.17per cent from N8.93billion reported in 2021FY.
With the growth in profit, the group’s Return on Average Equity increased to 29.32 per cent in Q3 2023, highest so far in the history of the lender. The 2023FY guidance is 20 per cent.
However, the impressive performance in the period back by N151.69billion gross earnings in Q3 2023, an increase of 59.08 per cent from N95.35billion in Q3 2022.
