Wema Bank N150bn Rights Issue: Shareholders’ Opportunity to Participate in Transformative Growth

Wema Bank Plc is currently raising N150 billion through Rights Issue that offer existing shareholders an opportunity to participate in the banks’ current  transformative growth, writes Kayode Tokede

As part of  strategies to comply with  the Central Bank of Nigeria (CBN) banking sector recapitalisation policy  by 2026, Wema Bank has commenced its rights issue  with the plan to raise N150 billion.
In view of macroeconomic conditions, the CBN in March 2024, launched a recapitalisation programme requiring commercial banks to raise fresh capital in alignment with the minimum requirement for their respective banking licences, within a 24-month timeline spanning April 1, 2024, to March 31, 2026.

Some banks have already raised fresh funds  in efforts to  meet the apex bank’s required level of capitalisation. Wema Bank Plc has started its process to ensure it beats the deadline set by CBN.
 The  rights issue capital raise exercise is part of Wema Bank’s broader initiative to enhance its capital adequacy, and position the bank for new opportunities across key markets.  The offer, which opened April 14, 2025, will run through May 21, 2025, marking a major step in the bank’s strategy to strengthen its capital base and drive sustainable growth.
The Rights Issue comprises 14,286,785,417 ordinary shares of 50 kobo each at N10.45 per share, on the basis of two  new ordinary shares for every three ordinary shares held as  at the close of business on March 5, 2025.

As of April, 2025, the stock price of Wema Bank stood at N11.95 per share and it has gained an average 31.3per cent or N2.85 per share in its year-till-date performance from N9.10 per share it closed for trading in 2024.  In 2024, the stock price appreciated by 62.5 per cent or 3.5 per cent to close at N9.10 per share from N5.60 per share it opened for trading in the year under review.

The  bank in 2024 successfully completed the first tranche of its recapitalisation exercise having secured all relevant regulatory approvals for the allotment of its N40 billion Rights Issue which was initiated in December 2023.
Wema Bank is at the forefront of meeting the recapitalisation requirements of the CBN for banks with the final phase of its capital raise of N200 billion of N150billion by rights issue and N50 billion through private placement. The capital raise will strengthen the bank’s position to play a big role post-recapitalisation for banks.
Managing Director/ CEO, Wema Bank, Mr.  Moruf Oseni in a statement reiterated the bank’s resolve in retaining its Commercial Banking licence with National Authorisation, adding that the  first  N40 billion rights issue is a step in that direction.

“We are delighted to announce the conclusion of the 1st tranche of our Capital Raise Programme, after obtaining the relevant approvals of all regulatory authorities.
“Our move to commence our capital raise programme very early demonstrates our push for excellence and with a strong emphasis on our digital play, we are set to amass more successes in the coming months,” he said.
The current rights issue is open exclusively to existing shareholders, providing an opportunity to increase their stake and participate in the bank’s future growth. Full details, including the offer price, rights ratio, and subscription process, are available through official channels, on the bank’s website, and via its appointed stockbrokers and Wema Bank branches nationwide.

Wema Bank’s board of directors and executive management  have expressed their appreciation to all stakeholders and transaction partners whose efforts have been instrumental in progressing this capital raise. As the bank enters this transformative phase, it remains focused on transparency and active engagement with shareholders.

Utilisation of the N150bn Proceeds
The proceeds will be utilised to reinforce the bank’s balance sheet, scale up investments in digital infrastructure, expand its customer base, and continue delivering long-term value to shareholders and customers.
Specifically, the bank intends to utilise the capital raised through this rights issue:  to increase its lending capacity to the Small and Medium Enterprise  (SME) sector; deepen the bank’s retail and commercial loan portfolio;  to deepen corporate loan portfolio and improve IT infrastructure and  strengthen its digital play (ALAT).
“This is a key step that will consolidate the bank’s vision of becoming a Systematically Important Bank (SIB) and creating value for our esteemed shareholders.

“Our consistent growth in key performance indicators and market share reflects the success of our strategic initiatives and the trust our shareholders have shown us,” the bank said in its April 10 corporate announcement signed by Johnson Lebile, company secretary/general counsel.

“Upon conclusion of this Rights Issue, the board will ensure that the bank remains well-positioned to seize new opportunities in the evolving Nigerian banking landscape particularly by increasing lending to the Nigerian SME, retail, commercial and corporate sectors respectively.
“In addition, we would improve the bank’s IT infrastructure and strengthen the bank’s digital platform- ALAT, which has facilitated our market penetration in great measures while also creating access to financial services to the young and tech-savvy generation in Nigeria.
“By doing so, you will not only contribute to the bank’s future success but also solidify your stake in our long-term vision,” Wema Bank further noted.

Current performance that boost confidence
The lender has lived up to its promise of  improved return on investment for shareholders with the declaration of a N1 dividend per share for its 2024 financial year, a 104 per cent increase over the previous year’s to be approved by the shareholders during the 2024 Annual General Meeting (AGM).
The management of Wema Bank had paid shareholders N0.49 dividend in 2023 financial year and in 2022 and 2021, shareholders took home N0.29 and N0.23 dividends, respectively.

By the bank’s 2024 financial performance, submitted to the Nigerian Exchange Limited (NGX), the N1 dividend for the 2024 financial year amounts to a 20.69per cent payout ratio.
“From 22 per cent dividend growth in 2019, Wema Bank hit an all-time high of 104per cent in 2024, an indication of consistency and generous dividend policy. The bank also outperformed competitors in the banking sector last year with over 60 per cent capital appreciation, thus emerging as the best-performing stock in the banking sector on NGX.
The bank’s GMD, Oseni, said to shareholders recently that “You can trust us always that your investment in bank will produce exceeding returns. This is our promise to you.”

He also assured the banking public that the bank would be developing platforms and supporting initiatives that prioritise the needs of  their customers, leveraging technology in solving problems across all sectors.
The bank’s stock price has gained nearly 18 per cent in first quarter (Q1) 2025 from N9.10 per share it opened for trading to close March 28, 2025 at N10.70 per share.
The group posted a profit before taxation (PBT) of N102.517 billion in 2024 financial year as against N43.663 billion in the previous year, an increase of 134.7per cent. Profit after tax (PAT) shot up by 140.13per cent to N86.29 billion in 2024 from N35.93 billion reported in 2023.
This was made possible by the gross earnings of N433.434billion in the year compared with N226.914billion in the corresponding year, amounting to 91per cent and reflecting a cost-efficient operational structure in the bank during the review period.

Amid growth in profits, Wema Bank’s Return on Equity (ROAE) stood at 43.60per cent, as Return on Assets (ROAA) at 2.96 per cent. Capital Adequacy Ratio (CAR) of 19.67per cent and Cost to Income ratio of 56.23per cent underscore the commercial bank’s resilience and financial strength.
Despite the inclement operating environment, total deposits grew by 35.65per cent in 2024 to N2,523.82 billion from N1,860.57 billion reported in 2023, while loans and advances to customers closed 2024 at N1,201.21 billion, about year on year by 36 per cent growth  from N801.10 billion in 2023.

Similarly, Wema Bank’s total assets stood at N3,585.05 billion in the year under review, an increase of 60.04per cent over N2,240.06 billion recorded in the corresponding year.
Commenting on the 2024 performance, the GMD/CEO of the bank, in a statement said  that the strong performance stemmed from the commercial bank’s focus on strong strategy execution in the key areas of risk management, customer relationship management and digital banking.
“Our people are committed to the institution’s founding ethos of supporting Nigerian businesses and individuals with the most innovative banking products and services. ALAT our flagship digital platform continues to lead in the adoption of digital banking services across the increasingly young Nigerian populace.

“An example of this innovation is ALAT XPlore, the first licensed banking App for teenagers designed to help teenagers ages 13-17 build their money management skills, achieve their financial goals and become financially responsible.
“Despite the constrained operating environment, the bank continues to experience strong growth across all its financial indices reflecting the quality and resilience of the workforce.
“The performance is headlined by impressive improvements in Profit before Tax which grew strongly by 135per cent. The growth of gross earnings by 92 per cent, Total assets by 60 per cent and earnings per share at 483.20kobo shows the core improvements to our balance sheet.

“In addition, our cost-to-income ratio of 56.23 per cent has witnessed significant improvement from the previous period. The bank’s approach to business is hinged on partnership, progress, service, innovation, and efficiency, informed by an understanding of customers’ businesses and objectives, such that it can anticipate and meet their needs as they fulfill their financial goals and aspirations.
 Wema Bank has always maintained leadership position in the digital banking space while enhancing corporate and commercial presence on a global scale.