By Dipo Olowookere
The board of Tier-2 lender in Nigeria, Wema Bank Plc, has concluded plans to raise fresh capital from the bond market.
The financial institution in a statement to the Nigerian Stock Exchange (NSE) last week disclosed that it wants to sell bonds worth N20 billion to investors mainly at the international market.
According to the bank, proceeds from the proposed exercise would be used to finance some of the operations of the lender.
Wema Bank explained that the series 2 senior unsecured bond is under its N50 billion bond issuance programme launched not too long ago.
“Following the successful establishment of its N50 Billion bond issuance program, the bank (Wema Bank) is set to issue up to N20 billion senior unsecured bond in series 2 Bond issuance program.
“The proceeds of the Bond are intended to boost the working capital financing needs of the bank.
“The series 2 of the bond is to be issued for a tenor of 5-7 years and the target market is the institutional investors,” the notice to the stock market regulator said.
Business Post reports that in the first tranche of the N50 billion debt programme, the mid-tier bank raised about N6.2 billion from the exercise.
Wema Bank, the pioneer of Nigeria’s first fully digital bank ALAT, offers a range of retail, SME banking, corporate banking, treasury, trade services and financial advisory to its customers. The company operates with a National Banking Licence, with a network of over 136 branches and service centres across Nigeria, backed by a robust ICT platform.
Wema Bank had earlier said about three months ago that it aims to boost its capital ratio to 15 percent before the end of 2018 from 14.3 percent.
The regulatory minimum capital ratio for Wema Bank and its peers is 10 percent.
In its H1 results for 2018, the lender owned by states in the South West region of Nigeria, improved its profit after tax by 28.8 percent to N1.6 billion from N1.2 billion it achieved in the first half of 2017, while deposits from customers grew by about N103 billion to N354.9 billion from N251.7 billion.
Business Post reports that as at the close of business on Friday, September 28, 2018, Wema Bank traded at 57 kobo per share, rising by 3.64 percent during the day’s session.
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