By Dipo Olowookere
There is every possibility that Wema Bank Plc will offer a cash reward to its shareholders in the current financial year ending next month.
This is according to analysts at Meristem Research and the dividend payment is likely to be 7 kobo, Business Post gathered from a report released by the brokerage company.
For the first time in 14 years, Wema Bank paid its shareholders a dividend and this was in 2019 for the 2018 accounting year. The amount paid was 3 kobo, though very insignificant, investors were happy that it was a sign of better things to come.
If the forecast of Meristem Research is right, it would be 4 kobo or 133.3 per cent higher than the amount paid for the 2018 fiscal year, which the shareholders would gladly appreciate.
Also, the firm has projected that the share price of the mid-level Nigerian lender should reach N1 per unit on the floor of the Nigerian Exchange (NGX) Limited by the end of this year.
On Monday, November 15, 2021, Wema Bank share price was 83 kobo, 1.2 per cent lower than the preceding day’s closing price of 84 kobo.
In the report, Meristem projected that in 2021 full-year, Wema will likely have earnings per share (EPS) of 23 kobo “from which we expect the bank to pay a dividend of 7 kobo (without impairing capital adequacy) based on an estimated payout ratio of 30 per cent.
“This implies a dividend yield of 8.14 per cent (based on the closing price of the ticker on November 9, 2021). Our December 31, 2021 target price for the ticker is N1.00.”
Recall that last week, Business Post reported that Wema Bank was planning to recapitalise and was looking to merge with another bank or acquire a financial technology (fintech) company.
The financial performance of the company has been impressive so far this year with the interest income growing by 11.11 per cent, with higher fee-based income contributing to the 9.08 per cent rise in gross earnings to N63.08 billion.
