Banking
How Wema Bank Paid Dividend After Rethinking Digital Strategy
On May 8, 2019, shareholders of Nigeria’s oldest indigenous lender, Wema Bank Plc, agreed to the proposed N0.03 dividend payment proposed by the management of the bank, amid celebration, as the shares of the bank listed on the Nigeria Stock Exchange (NSE) traded at N0.73 each.
The shareholders celebrated the proposed N0.03 per share dividend payout, not just because of a payout ratio of 34.79 percent but also because it was the first time they were getting any return from Wema Bank in 15 years.
The bank, founded in 1945, had survived different reforms and restructuring in the country’s economy and financial services industry.
Following the 2008 banking crisis in Nigeria which saw the collapse of many banks, Wema Bank had negative capital in excess of N66 billion and was declared a bank in grave financial situation by the banking industry regulator in Nigeria, but years of effective leadership have turned around the fortunes of the financial institution.
While the work to rebuild the lender was ongoing, shareholders had to forfeit their annual dividend as the bank was in no position to do so. However, following its capital reconstruction, a major constraint to Wema Bank’s dividend payment ability was lifted.
The journey to recapitalize Wema Bank, return it to profitability and consistently grow has been an arduous one for the management of the company and the shareholders alike, who year after year had to put up with the bank’s reasons for not paying dividend. Nevertheless, they were strong in their belief of the path the Bank has chosen to ensure growth.
For the management of Wema Bank, it was going to be difficult to get the kind of results needed for exponential growth with the traditional banking methods, which every lender in the industry already use to serve their customers.
Chances of getting bank customers to choose a new bank are getting slimmer as it was becoming very difficult to present any unique proposition.
Therefore, any bank that was keen about growth had to, either run after the unbanked and hope that would be enough, or think up something new altogether. That was what Wema Bank did.
After years of research, the management of Wema Bank concluded that the only way to achieve the kind of growth needed to deliver value to all its stakeholders was to build a bank of the future today.
In 2017, Wema Bank launched ALAT, which offers branchless banking services. It is Africa’s first digital bank and it changed everything that banking was all about in Nigeria before its arrival. It got other financial services providers thinking, with many introducing similar products/services and retooling existing infrastructure to deliver more value to customers.
While ALAT might not have been able to corner the millennial/digitally savvy consumer market for itself, it got some who did not join ALAT to start asking their banks for more.
With more than a million active customers who are enjoying the digital bank that is fast becoming part of their lifestyle, Wema Bank has through a rethink of its digital strategy which birthed ALAT, changed the game in the Nigerian banking industry and achieved its quest for exponential growth.
In 2018, the bank’s profit after tax grew 47.5 percent to N3.3 billion from N2.3 billion in 2017. Its gross earnings went up by 9.6 percent to N71.53 billion in 2018 from N65.27 billion in 2017.
ALAT played a huge role in seeing savings deposit grow by 26.2 percent to N62.89 billion in 2018 from N49.83 billion in 2017. Current account deposit also grew by 46.80 percent from N12.47 billion in 2017 to N18.30 billion.
Wema Bank’s Chairman, Mr Babatunde Kasali, said the bank remained highly committed to using it “technological edge to drive and deliver on our goals for the year”.
He added that the bank would also deepen its focus on the commercial and corporate business while it continues to leverage technology to get ahead of competitors, even in the retail space.
By Modupe Gbadeyanka
To strengthen Europe-Africa trade ties, Access Bank has opened a new branch in Malta. It will focus on international trade finance, employing approximately 30 people in its initial phase, with plans for controlled expansion over time.
It was learned that this Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
Access Bank Malta Limited commenced operations after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
Malta, a renowned international financial centre, and a gateway between the two continents, is strategically positioned to play a pivotal role in advancing commerce and fostering economic partnerships.
This strategic expansion into Malta enables The Access Bank UK Limited to leverage growing trade opportunities between Europe and Africa.
It underscores the organisation’s commitment to driving global trade, financial integration, and supporting businesses across these regions.
“By establishing operations in Malta, we will gain a foothold in a market that bridges European and North African economies, moving us one step closer to our goal of becoming Africa’s Gateway to the World.
“It further enhances our bank’s capacity to support clients with innovative solutions tailored to cross-border trade and investment opportunities,” the chief executive of Access Bank, Mr Roosevelt Ogbonna, stated.
“Europe has emerged as Africa’s leading trading partner, driven by initiatives such as the Economic Partnership Agreements between the EU and African regions and the African Continental Free Trade Area (AfCFTA).
“With Europe-Africa economic relations entering a new phase, The Access Bank Malta Limited is ideally positioned to deepen trade and meet the financing and banking needs of our clients in these expanding markets,” the chief executive of Access Bank UK, Mr Jamie Simmonds, commented.
Also speaking, the chief executive of Access Bank Malta, Renald Theuma, said, “Malta is uniquely positioned as a bridge between Europe and Africa, making it an ideal location for our subsidiary. This move allows The Access Bank Malta Limited to engage more closely with customers in Europe and deliver tailored financial solutions that drive growth and connectivity across both continents.”
By Adedapo Adesanya
The International Finance Corporation (IFC) and Goldman Sachs have announced a new partnership with African banks, including Nigeria’s Zenith Bank and Stanbic IBTC Nigeria to support the Goldman Sachs 10,000 Women initiative, a joint programme launched in 2008 to provide access to capital and training for women entrepreneurs globally.
The two Nigerian banks are part of nine financial institutions from across Africa which have agreed to join the 10,000 Women initiative committing to leverage the business education and skills tools the programme provides to create more opportunities for women entrepreneurs across the continent by providing access to business education.
Others banks include Stanbic Bank Kenya, Ecobank Kenya, Ecobank Cote d’Ivoire, Equity Bank Group, Banco Millenium Atlantico – Angola, Baobab Group, and Orange Bank.
Speaking on this, Ms Charlotte Keenan, Managing Director at Goldman Sachs said – “10,000 Women has had a powerful impact to date, but we know that there are more women to reach and more potential to be realized.
“We are delighted to partner with IFC to supercharge the growth of women-owned businesses across Africa, and mainstream lending to female business leaders. We remain committed to supporting entrepreneurs with the access to education and capital that they need to scale.”
Since 2008, the 10,000 Women initiative has provided access to capital and business training to more than 200,000 women in 150 countries.
“This expanded initiative marks a significant step forward in creating equitable economic opportunities for women in Africa, enabling them to build stronger, more resilient businesses and to realize their entrepreneurial goals,” said Ms Nathalie Kouassi Akon, IFC’s Global Director for Gender and Economic Inclusion.
Goldman Sachs’ 10,000 Women initiative complements the Women Entrepreneurs Opportunity Facility (WEOF), launched in 2014 by Goldman Sachs and IFC as the first-of-its-kind global facility dedicated to expanding access to capital for women entrepreneurs in emerging markets.
By Aduragbemi Omiyale
In recognition of its unwavering commitment to fostering access to financing for Nigerian micro, small and medium enterprises (MSMEs), Development Bank of Nigeria Plc has been rewarded with the Financial Inclusion Leadership Award at the Champions of Inclusion Nigeria Financial Inclusion Awards.
This was at the 2024 International Financial Inclusion Conference (IFIC) organised by the Central Bank of Nigeria (CBN) in collaboration with the World Bank and other stakeholders.
The chief executive of the lender, Mr Tony Okpanachi, said the recognition affirms the company’s efforts in expanding access to financial services for MSMEs in Nigeria.
“We are honoured to receive the Financial Inclusion Leadership Award, which is a testament to our bank’s commitment to expanding access to financial services for all Nigerians. This award recognises our efforts to bridge the financial inclusion gap, particularly for a priority sector like the MSMEs.
“Additionally, this award is a validation of our strategic focus on driving financial inclusion for small businesses, and we are proud to be at the forefront of this initiative that drives that. We will continue to innovate and expand our financial inclusion programmes, ensuring that more Nigerian small and startup businesses have access to services,” he stated.
On his part, the Chief Operating Officer of DBN, Mr Bonaventure Okhaimo, said the accolade demonstrates the firm’s dedication to driving financial inclusion and economic growth in Nigeria.
“This award acknowledges our Bank’s innovative approach to widening opportunities for MSMEs in Nigeria to grow and scale their businesses,” he said.
“This award will motivate us to continue pushing the boundaries of financial inclusion, exploring more innovative solutions and partnerships to expand our reach and impact.
“We are committed to ensuring that more small businesses and startup enterprises in Nigeria have access to financial services, this award will further inspire us to accelerate our efforts in this regard,” he stated.
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