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Wema Bank floats N40bn rights issue in September

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WEMA Bank
WEMA Bank
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Wema Bank Plc says that the capital raising exercise of N40 billion will  hit the market in September, barring unforeseen circumstances.

The bank’s Deputy Managing Director, Mr Moruf Oseni, said this at the company’s Half Year 2021 investors/analysts presentation on Friday in Lagos.

Oseni said the capital raise would give the bank expanded base of business over the coming years to compete favourably in the industry.

He said the bank would boost its capital position with a rights issue in September having obtained shareholders’ approval in May.

“The rights issuance is expected to hit the market in September, this month of August is for us to have a court ordered meeting to get shareholders together and agree on the scheme of arrangement,” he said.

According to him, the bank will embark on a road show from next week to sensitise shareholder groups and associations on growth plan and capital raise.

Oseni said the bank would reduce its shares on issue before embarking on the rights issue to ensure enhanced growth for shareholders.

“Wema Bank today has a large number of shares in issuance, but before we float the right issue we need to get the shareholders to reduce the shares in issue and on the back of that we then issue those rights.

“This will not change the shareholding structure of the shareholders.

“We just want to manage the number of shares in issue and that will impact on our ratios.” It makes sense to have more efficient shares in issue before doing the rights issuance,” he said.

On merger and acquisition, he said that acquisition was part of the bank’s plan to ensure organic growth.

Oseni said the acquisition was not limited to the financial sector space.

“In organic growth, there is possibility of a combination; either you merge or you acquire and this acquisition is not limited to acquiring another financial player in this space or a Fintech.

“We are looking at all possible options, whether you like it or not no matter how efficient you are.

“In this game, we are playing skill to skill and we also have huge aspirations to scale up in the shortest possible time,” he added.

Oseni disclosed that the bank priority remains the digital banking play to drive improved performance.

He noted that the bank would sustain its digital offering and focus to meet the need of its customers.

“We are committed to playing in this digital space, we have positioned ourselves in the last four years as a bank of choice, and we will build the ecosystem together as they flourish, we will flourish.

“We are trying to make significant investment in technology on our side because we realised that for us to be partners for some of these Fintechs, reliability must be key,” he said.

Also speaking, Mr Tunde Mabawonku, Wema Bank Chief Finance Officer said that gross earnings in H1 increased by 4.9 per cent to N39.8 billion against N38.0 billion in H1, 2020.

Mabawonku attributed the growth to higher interest rate environment notably in loans and advances.

He noted that non-interest income declined by 7.9 per cent to N7.6 billion in contrast to N8.3 billion in 2020 due to 82.6 per cent decline in net trading income.

Mabawonku added that digital channels remain a priority in meeting customer needs and closing the financial inclusion gap.

He said that USSD recorded more than 37.8 million transactions, and transaction value of N220.0 billion, reaffirming its focus to grow change usage. (NAN)

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Business & Economy

President Buhari transmits Business Facilitation bill to N’Assembly

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President Muhammadu Buhari
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The Senate has received the Business Facilitation (Miscellaneous Provisions) Bill 2022, forwarded to the National Assembly by President Muhammadu Buhari, for consideration and passage.

The bill was accompanied by a letter dated 17th June, 2022.

The letter, addressed to the Senate President, Ahmad Lawan, was read during plenary on Tuesday.

President Buhari, in the letter, explained that the expeditious consideration and passage of the bill would promote the ease of doing business in Nigeria.

It reads, “Pursuant to Sections 58(2) of the 1999 Constitution of the Federal Republic of Nigeria (as amended), I forward herewith the Business Facilitation (Miscellaneous Provision) Bill 2022 for the kind consideration of the Senate.

“Business Facilitation (Miscellaneous Provision) Bill 2022 seeks to promote the war of doing business in Nigeria by amending relevant legislation.

“While hoping that this submission will receive the usual expeditious consideration of the Senate, please accept, Distinguished Senate President, the assurances of my highest consideration.”

 

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Business & Economy

N5 trillion urgently needed to cushion effects double digits increase on ordinary Nigerians – World Bank

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The World Bank has warned that Nigeria could lose about N5trillion in 2022 from gasoline subsidies.

The bank also said that N5 trillion is urgently needed to cushion ordinary Nigerians from the crushing effect of double-digit increases in the cost of basic commodities.

The World Bank said in it Nigeria Development Update (NDU) released on Tuesday in Abuja.

The report said: “When we launched our previous Nigeria Development Update in November 2021, we estimated that Nigeria could stand to lose more than N3 trillion in revenues in 2022 because the proceeds from crude oil sales, instead of going to the federation account, would be used to cover the rising cost of gasoline subsidies that mostly benefit the rich”.

World Bank Country Director for Nigeria Shubham Chaudhuri, however noted: “Sadly, that projection turned out to be optimistic. With oil prices going up significantly, and with it, the price of imported gasoline, we now estimate that the foregone revenues as a result of gasoline subsidies will be closer to 5 trillion Naira in 2022.

“N5 trillion is urgently needed to cushion ordinary Nigerians from the crushing effect of double-digit increases in the cost of basic commodities, to invest in Nigeria’s children and youth, and in the infrastructure needed for private businesses small and large to flourish, grow and create jobs.”

The report noted: “Nigeria is in a paradoxical situation: growth prospects have improved compared to six months ago but inflationary and fiscal pressures have increased considerably, leaving the economy much more vulnerable”.

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Nigeria’s banking sector now immune to economic shock – NDIC

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Nigeria Deposit Insurance Corporation (NDIC) has said that the banking sector is now immunized to withstand shocks that may impact the economy and the financial system.

Mr Bello Hassan, Managing Director of NDIC said this at a retreat for members of the Senate Committee on Banking, Insurance and other Financial Institutions with the NDIC, in Lagos.

Any change in fundamental macroeconomic variables or relationships that has a significant impact on macroeconomic outcomes and measures of economic performance, such as unemployment, consumption, and inflation, is referred to as an economic shock.

Mustapha Ibrahim, Executive Director (Operations), who represented the NDIC boss, said Nigerian banking industry was currently resilient to most of these difficulties, particularly external shocks over which the Corporation had no control.

He said: “We have tried to immunise the system to withstand shocks that may be impacting on the economy and the financial system”.

Hassan, further said that effective risk-based management remained critical to a safe and sound financial system.

“The NDIC and the Central Bank of Nigeria have a very robust supervisory framework under the risk-based supervisory format the risk-based approach is actually proactive. For the most part, we try to anticipate all these risks – Macro, micro, domestically and globally – to address them continuously.

“So, it is so dynamic that we also are constantly on a real-time basis, monitoring the industry continuously and fine-tuning our supervisory tools, both onsite and offsite, to mitigate some of the challenges the banks may be facing,” he said.

On his part, Chairman, Senate Committee on Banking, Insurance and Other Financial Institutions, said the retreat demonstrated progress in creating lasting and workable relationships in the national interest.

Sani, who was represented by Senator Olubunmi Adetunbi, was optimistic that the outcome will aid in the strengthening of the financial and banking sectors, particularly the corporation’s supervisory and regulatory role.

“The National Assembly and NDIC are key institutions critical to the growth and development of the Nigerian economy. While we provide the legal and institutional frameworks, NDIC carries out its regulatory or supervisory responsibilities in order to safeguard the banking sector.

“Engagement of this nature gives us the platform to deeply look into our activities and responsibilities and also examine how far we have gone in carrying out our mandate as required. It helps in injecting fresh ideas into our operations which will materialise into an improved, effective and efficient service delivery to Nigerians,” he said.

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