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Wema Bank relegated to a regional bank, seeks 30 days extension

Category: Capital Market

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Wema Bank relegated to a regional bank, seeks 30 days extension

Wednesday, 06 October 2010

Wema Bank plc yesterday became the first national bank to be relegated to a regional bank after it failed to meet the minimum capital requirement benchmark of N25 billion set by the Central Bank of Nigeria (CBN) recently following the announcement of a new banking structure. Wema Bank tumbled at the expiration of a three month extension granted by the CBN, and after an unsuccessful attempt to persuade investors to come into the business.

According to the statement released by the CBN yesterday, “Wema Bank Plc, has applied to CBN seeking a banking licence to operate as a regional bank with a regulatory capital requirement of N10 billion (Ten Billion Naira). It has also applied to and obtained approval from Securities and Exchange Commission (SEC) to raise N7.5 billion fresh capital through a Special Placement Offer”.

The bank has made additional recoveries of N4 billion (Four Billion Naira Only).All these point to a significant progress in its recapitalisation efforts.

However, the ultimate success of the recapitalisation of Wema Bank is partly hinged on the establishment of AMCON, the operationalisation of which has been slightly delayed for reasons beyond the bank’s control. Consequently, Wema Bank has requested for a 30-day extension ending October 30, 2010, to enable it conclude its capital raising exercise.

The CBN has granted the request. 

Source: CBN Press Release and additional reporting from Blessing Anaro, BusinessDay

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