Dipo Olowookere
By Dipo Olowookere
Investors intending to buy or sell Wema Bank shares on the floor of the Nigerian Exchange (NGX) Limited would not be able to do so at the moment.
This is because trading in the stocks of the financial institution has been placed on full suspension by the stock exchange.
The embargo on the trades of the company’s equities became effective Tuesday, March 8, 2022, and before the suspension, its value was 92 kobo per unit.
Business Post reports that Wema Bank is currently in this situation as a result of the intention of the board to reconstruct the lender’s equities.
The board of directors wants to reduce the issued and fully-paid shares of Wema Bank to allow for the raising of additional capital for the organisation through available means approved by shareholders.
Wema Bank will merge every three of its shares into one and this will reduce the issued and fully-paid shares from 38,574,466,082 units to 12,858,155,360 units at the end of the exercise.
This development was confirmed by a notice from the NGX, which read, “Trading license holders and the investing public are hereby notified that trading in the shares of Wema Bank Plc was suspended Tuesday, March 8, 2022.
“The suspension is necessary to prevent trading in the shares of the Bank in preparation for the share reconstruction of the bank’s issued and fully paid shares from 38,574,466,082 ordinary shares of 50 kobo each to 12,858,155,360 ordinary shares of 50 kobo each in the ratio of one for every three shares held.”
In November 2021, this newspaper reported that Wema Bank was considering sourcing fresh capital from the capital market through a rights issue to boost its capital base to keep it competitive especially in view of the proposed Basel III-compliant regulatory environment.
In the third quarter of last year, the Capital Adequacy Ratio (CAR) of the mid-level financial institution depleted to 11.35 per cent from 15.01 per cent in the full year of 2020.
