Wema Bank Plc on Thursday 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.

He said a bigger capital base would enable the bank to acquire more risk assets pointing out that its ability to do business had been limited by its low capital base as it had to keep within the prescribed Capital Adequacy Ratio for banks, despite its liquidity ratio of about 60 per cent.

The Wema boss, who said that the target of the management was to create the most efficient retail and commercial bank with market share of about five per cent by 2015, added that the focus of its operations would still remain the major commercial centres while the operation of its national franchise would be determined by business imperatives.

He said the bank, which also planned to raise additional Tier 2 capital in the coming months, was not looking to be the biggest but it intended to grow to a respectable size to enable it to manage costs efficiently and gain the required recognition in the market.

“We will expand relative to capacity, skills and industry requirements,” he said.

Oloketuyi explained that dividend would not be paid this year, pointing out that the current set of shareholders had a good understanding with management on expectations.

He said, “Investors are now moderate in their expectations. In 2008, a bank declared N56bn profit and in 2009, it was said to be in a grave situation. That shows something is wrong.

“It is better to have something that is enduring and sustainable than something that is short term. We have major investors and minority shareholders who believe in the vision of the bank.”

The Wema boss said bank charges were not as high as being perceived, pointing out that the ATM withdrawal charges had been eliminated while COT was being scaled down and would eliminated by 2015.

He also said interest rates remained high due to the realities on the ground, including high cost of service provision such as power and security as well as inflation rate.

Source: Punch