Wema Bank has announced plans to raise N50 billion through a private placement, as part of its strategy to meet the N200 billion minimum capital requirement set by the Central Bank of Nigeria (CBN) for banks with national authorization.
The bank says its initial N150 billion Rights Issue window had ended on May 21st, 2025.
At its Annual General Meeting (AGM), held electronically on Thursday, May 22, 2025, the bank formally adopted a resolution to secure additional capital, reinforcing its commitment to meeting regulatory requirements while ensuring sustainable growth.
The CBN’s latest recapitalization framework mandates that commercial banks with international authorization must maintain a minimum capital base of N500 billion, while banks with national authorization, including Wema Bank, must meet a N200 billion threshold.
With its current authorization, Wema Bank falls within the national category and must strengthen its financial position accordingly.
Private Placement and Dividend Approval
In its official statement, signed by Company Secretary, Johnson Lebile, Wema Bank outlined the capital-raising initiative.
“It was unanimously resolved that the Bank raises additional capital in the sum of N50,000,000.00 (Fifty Billion Naira) only by way of Private Placement to meet a portion of the minimum recapitalization requirement for a National licensed bank.”
Additionally, shareholders approved a dividend payment of N1 per share, representing a substantial increase from previous years’ payouts.
“It was unanimously resolved that the Directors be authorized to pay a dividend of N1.00 each on May 22, 2025, from the profit of the Financial Year Ended December 31, 2024, to members on the register of the Bank at the close of business on May 1, 2025, subject to the deduction of appropriate Withholding Tax,” the statement added.
Wema Bank’s Strongest Financial Performance in Five Years
Wema Bank recorded its most impressive financial results in at least five years, delivering substantial growth in both revenue and profitability.
Gross earnings soared to N433.43 billion, driven by strong interest income and strategic asset expansion.
Profit before tax surged by 141% to N102.5 billion, marking a record-breaking milestone for the bank. Loans and investments formed the backbone of its revenue streams, contributing significantly to overall performance.
Breakdown of Wema Bank’s Revenue Sources
The bank’s earnings were primarily derived from loan disbursement and investments in government securities.
- Loan disbursements generated N233.85 billion, reflecting a 91% increase from the previous year. Loans accounted for 66% of total interest income.
- Investments in government securities (such as bonds and treasury bills) yielded N113.68 billion, representing a 98% increase year-on-year, contributing 32% of total interest income.
- At the close of 2024, Wema Bank’s total loan portfolio stood at N1.237 trillion, with N1.125 trillion allocated to long-term loans.
On the investment side, the bank held N712 billion in Federal Government Bonds and N111.11 billion in Treasury Bills, offering a safer alternative compared to direct loans.
What you should know
The CBN has emphasized that all banks must meet the minimum capital requirement within 24 months, commencing from April 1, 2024, and terminating on March 31, 2026.
- Apart from the minimum requirement from banks with international and national authorisation, regional authorization holders are required to maintain N50 billion capital.
- Merchant banks must have N50 billion, and non-interest banks with national and regional authorization must have N20 billion and N10 billion, respectively.
The new capital requirement will consist solely of paid-up capital and share premium. This means Shareholders’ Fund will not be considered.
Outlook for 2025 and Beyond
With its recapitalization drive well underway, Wema Bank is poised to strengthen its position within Nigeria’s financial sector.
The planned N50 billion private placement, alongside robust financial growth, reflects a strong commitment to compliance, profitability, and shareholder value creation.
As market dynamics continue to evolve, Wema Bank’s strategic financial decisions will play a pivotal role in shaping its future trajectory in the Nigerian banking industry.
