Wema Bank is to raise N20 billion fresh capital to boost its shareholders’ fund not later than June this year, as directed by the Central Bank of Nigeria (CBN).
The CBN had consequent upon the release of the examinations on Wema Bank, done in conjunction with the Nigerian Deposit Insurance Corporation (NDIC), given the bank up till the end of the first half of this year to recapitalise.To pave the way for the recapitalisation, shareholders of the bank last weekend approved an increase in the authorised share capital from 20 billion ordinary shares of 50 kobo each to 40 billion ordinary shares of 50 kobo each by way of rights to existing shareholders.
The approval was achieved in a special resolution at the 2009 Annual General Meeting (AGM) held in Lagos to chart a way forward for the 60 year old institution.The Group Managing Director of the bank, Mr. Segun Oloketuyi, said Wema Bank is adopting recapitalisation strategy defined along the parameters of loan recovery and capital raising.
The Chairman of the bank, Chief Samuel O. Bolarinde, said prior to the crisis in the industry, the bank was already engulfed in board and management issues that necessitated the appointment of an interim management team by the regulatory authority, adding that the impact of the crises was significant on the performance of the bank.Bolarinde said the bank recorded gross earnings of N22 billion and N13 billion in 2008 and 2009 respectively. He explained that the massive decline in earnings in 2009 was a reflection of the extremely difficult operating conditions faced by the bank during the period under review.
“A loss after tax of N57 billion and N11 billion were also recorded for the same period. Huge losses were as a result of the provisions of N65 billion and N7 billion made during the periods,” he said.He assured the shareholders that the bank has reviewed its portfolio of investment as well as risk management structure to ensure effective self regulation and compliance. The bank, he added, has also set up recovery initiatives that have started to yield positive results.