By Damilare Adeleye
Indications have emerged that the Wema Bank Plc is seeking its shareholders’ approval for measures like merger and acquisition, takeover, or business combination to meet the Central Bank of Nigeria recapitalization directives for a National Licenced Bank.
It is understood that the bank will only take the route if it fails to raise N200bn through the issue of ordinary shares, preference shares, convertible and non-convertible notes, bonds, or any other instruments approved by its directors.
It was recalled that the CBN governor, Olayemi Cardoso, notified banks of a new capital requirement that would allow the banking system to align with a $1tn economy that the Bola Ahmed Tinubu’s administration is targeting.
With the review, the new capital requirement of International Banks was raised to N500bn, National Banks capital was raised to N200bn while regional banks new capital was reviewed upward to N50bn.
However, the CBN exempted banks’ reserves, shareholders’ funds and retained earnings from the capital requirement in order to inject fresh capital into the system.
The exercise commenced on April 1, 2024, and would end 24 months later on March 31, 2026, the CBN said.
In the notice to shareholders of its 2023 Annual General Meeting for 2023 scheduled for May 28, 2024, the lender told shareholders that it needs to raise the N200bn through issuance of securities.
Wema Bank said, “That the Directors be and are hereby authorized to take and implement such measures as shall be required for the Company to fully comply with the recapitalization directives of the Central Bank of Nigeria (CBN) by way of a merger, business combination, acquisition, take over etc. subject to the approval of the relevant regulatory authorities.
“That the Directors be and are hereby authorized to raise additional capital in the sum of N200,000,000,000.00 (Two Hundred Billion Naira Only) or such other amount that would enable the company to meet the Central Bank of Nigeria recapitalization directives for a National Licenced bank and achieve its business needs through the issuance of securities comprising any or combination of, ordinary shares, preference share, convertible and/or non-convertible notes, bonds or any other instruments, by way of any of, a public offer, rights issue and or private placement or combination of such methods, in such tranches, series or proportions, at such dates and upon such terms and conditions, as may be determined directors, subject to obtaining requisite approval of the regulatory authorities.”
Wema Bank said if the right issue is undersubscribed, the unsubscribed shares will be offered to interested existing shareholders.
The bank said it may also decide to cancel shares that are unsubscribed, but subject to shareholders’ and regulatory consent.