Wema Bank plans N20bn bond deal by July, eyes equity sale

Wema Bank is making arrangement to raise N20 billion from the bond market by July and aims to pay a dividend this year for the first time in a decade, paving the way for an equity sale next year.

Its chief financial officer, Tunde Mabawonku, said the bank would start the process next month.

He explained that the product could be a combination of rights issues and private placement.

Mabawonku said the mid-tier bank was focused on selling debt this year after it raised N6.2 billion in its first tranche of a N50 billion debt programme.

Wema, according to him, want to pay dividends first to existing shareholders before raising equity in early 2019.

The debt issue would help Wema boost its capital ratio above its internal guidance of 15 percent, from 14.3 percent, the bank said earlier.

The regulatory minimum capital ratio for Wema and its peers is 10 percent.

In July, Wema Bank said it could issue debt assuming government bond yields dropped below 18 percent with falling inflation. Yields are now at around 14 per cent.

Wema aims to revive loan growth this year by focusing on small firms after its lending dropped by 4.9 per cent last year – despite the bank’s target of 1.5 per cent growth. It plans to increase lending by 10 per cent in 2018.

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