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Wema Bank gets N15.2 billion from AMCON

Category: Money Market


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Wema Bank gets N15.2 billion from AMCON

 

 

By Oluwaseyi Bangudu
14 January , 2011
 
Wema Bank said it has got N15.2 billion from the Asset Management Corporation of Nigeria (AMCON) as sales of some non-performing loan portfolio of the bank.
 
"We have got 15.2 billion from AMCON, in addition to the N7.5 billion we raised from bonds last year. These we have, in addition to about 30 billion we have recovered from our non-performing loans. We have applied for and we have obtained our licence to operate as a regional bank. We would be operating in South South, South West, Lagos and so on," Tunde Olofintila, the spokesperson of the bank said in an interview yesterday.
 
He explained that the bank had operated domestically all along, so it had no worries about addressing subsidiaries outside the country.
 
"Going regional will not affect our operations in any way, neither will it affect our customers. There is nothing major that can be done with a bank with international licence, national licence that we cannot do, except clearing at the interbank market, which does not affect our customers.
 
"Wema bank has about 150 branches. We would close down 17 branches that we have deemed to be non-profitable, maybe due to their location or other factors. In the areas where we want to operate, our profit margin is high, our deposits are high, and there is federal allocation to those states every month, which helps".
 
"For our customers who patronise some of the branches that would be unfortunately affected by our reforms, we have made provision for online banking. They don't need to go to the banking halls. All our customers can reach us online and transact their businesses like nothing has changed, which would actually be easier for them.
 
"We are aware that not all of our customers may follow us when this is done, but after we have done the cost-benefit analysis, it is the best decision for us, to operate in the region where we make profit," he said.
 
He said the amount was received based on the level of nonperforming loans in its books.
 
"It depends on the quantum of their delinquent loans. The money we get from AMCON is based on the value of delinquent loans that we have. We have recovered about N30 billion of our non-performing loans already, as at December ending. It is a continuous process and I think we are doing well," he said.
 
At the expiration of the deadline for capital raising last year, the Central Bank stated that Wema Bank Plc was able to raise the sum of N7.5 billion from the Special Placement Offer, approved by the Securities and Exchange Commission (SEC), and was formally authorised during the bank's completion meeting, held on Tuesday, October 28, 2010, while its full recapitalisation would depend on its receipts from AMCON.
 
According to the Central Bank's guidelines, commercial banks authorised to conduct business on a regional basis shall "maintain a minimum paid-up share capital of N10 billion or such other amount as may be prescribed by the CBN from time to time."
 
 

 

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