MONDAY, 05 JULY 2010 BY MOSES EBOSELE

 

Discussions between Wema Bank Plc and prospective investors are to be concluded before September 30, 2010.The Central Bank of Nigeria (CBN) had last week extended the June 30 recapitalisation deadline it gave Unity Bank and Wema Bank to September 30, 2010.   

 

 

Wema Bank explained at the weekend that a good number of individual and corporate investors have expressed strong interest in taking up the new shares “we are issuing under the special placing.”According to Wema Bank, discussions with the prospective investors are at an advanced stage, adding that the bank will achieve a deal closure with the prospective investors and thereafter seek regulatory approvals for the deal before the new deadline of September 30, 2010 expires.

 

 

A statement issued by Head, Corporate Communications, Tunde Olofintila, said the bank will continue to update stakeholders on the progress being made on the recapitalisation programme.He added that other efforts being made to recapitalise the bank include recovery of delinquent loans through internal efforts and resolution of some delinquent risk assets using the Asset Management Company of Nigeria (AMCON) window, raising additional equity through special placing and application for a regional banking license.

 

 

Explaining further, he said, “We are pleased to report that with the significant level of recoveries made through our untiring internal efforts, we have been able to reduce the quantum of bad loans in our books by over N21 billion.“By extension, these recoveries have also impacted our capital positively given the accompanying reversal of the sums recovered from loan loss provisions.

 

 

“We appreciate the bold initiative of the CBN in setting up AMCON to buy over some of the toxic assets in the books of banks. Wema Bank will be approaching AMCON with a substantial portion of our delinquent loans to discount when the corporation becomes operational. Given the quality of the securities in place, we expect to recover a good portion of the loans through this window.“Approvals to issue new shares and embark on a special placing offer were obtained from the board of directors and ratified by shareholders at the last yearly general meeting of the bank held on June 11, 2010.Shareholders have also endorsed the decision of the board to obtain a regional banking license when the proposed new licensing regime comes into effect,” said Olofintila.

 

 

He said Wema Bank has returned to the path of profitability and continues to make progress, entrenching sound corporate governance standards in its operations. “Within a space of one year, we have been able to bring our bank back from the precipice to a path of profitability as evidenced by our financial performance at end of first quarter of 2010.”

 

(Source:Guardian)