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We‘ll meet June recapitalisation deadline -Wema Bank GMD

Category: Capital Market

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We‘ll meet June recapitalisation deadline -Wema Bank GMD

By Yemi Kolapo, Published: Thursday, 13 May 2010

Wema Bank Plc will meet the June 30, 2010 recapitalisation deadline given to it by the Central Bank of Nigeria after the second phase of the banking sector audit, its Group Managing Director, Mr. Segun Oloketuyi, has said.

He said in addition to the bank‘s improving balance sheet, which had been enhanced by debt recovery totalling N21bn, it had concluded arrangements with a foreign core investor, who would invest substantial funds in the bank.

Oloketuyi made this known while briefing journalists on the activities of the bank’s new management in the last one year in Lagos on Wednesday.

The CBN, had after the second phase of its banking sector audit, sacked the managing and executive directors of Bank PHB Plc, Equitorial Trust Bank and Spring Bank Plc.

But it ordered the board of Wema Bank, which it said was also in a grave situation, to recapitalise by June 30, 2010, saying that ”Wema Bank Plc came under new ownership and management in June 2009, who took over a bank already in a grave situation and should not be held responsible for the present condition of the bank”.

Oloketuyi said, ”We will be able to meet our recapitalisation deadline in June. Actions are being taken to ensure that this is done. We have a major investor, foreign investor, that is bringing in money and we have done all the documentations and agreements that need to be done.

”We also have other investors, individuals and corporate organisations, who have indicated interest. Apart from this, the CBN, in trying to resolve the crisis of toxic assets, has initiated the Asset Management Corporation of Nigeria idea. This has been approved by the Senate, so some of the loans that are giving us trouble can go to AMC.”

He said the bank came out with negative capital after the CBN audit, adding that whatever capital it had in the past was wiped off by bad debts. He said, ”This made the bank embark on aggressive loan recovery, such that by the end of the 10th month of the new management, we were able to pull N21bn into the bank, even though we still have a distance to travel.”

The managing director noted that the easiest place the bank could have gone to for help in its bid to beat CBN‘s deadline, was the capital market, but added that the chances of success there at the moment was slim.

He, however, said the bank had come up ”with a short list of individuals and corporate entities, about 50. We would do a special placement. We have really gone far”.

Oloketuyi observed that if in 11 months, the bank could recover N21bn, out of its total non-performing loans, it stood a good chance of recovering more before the recapitalisation deadline expired.

He said Wema Bank would not only meet the deadline, but would also come out a stronger institution.

He noted that the new banking regime being proposed by the CBN was expected to help guard against the risk of banks operating with depositors‘ funds in sectors that were not well-regulated.

He said for now, the bank was focusing on improving its brand and playing in tune with the needs of modern day banking, noting that it had embarked on business process reengineering to imp[rove its structure as well as services.



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