Wema Bank of Nigeria Sells 15.2 Billion Naira of Debt
Stock Chart for Wema Bank PLC (WEMABANK)
Wema Bank Plc, a Nigerian lender that failed a central-bank audit in 2009, said it sold 15.2 billion naira ($100 million) of loans to the state-owned company set up to support the West African nation’s banks.
The lender also recovered 30 billion naira of non- performing loans by Dec. 31 and raised 7.5 billion naira through a share placement, spokesman Tunde Olofintila said by phone yesterday from Lagos, the commercial capital. He didn’t disclose the bank’s current capital base.
“What we have today is above the regulatory minimum capital to operate as a commercial bank with a regional authorization,” Olofintila said.
Ten of the country’s 24 banks failed an audit by the Central Bank of Nigeria in 2009 following a debt crisis that resulted from loans to speculators. The central bank fired eight chief executives of lenders, bailed out the industry with 620 billion naira and asked Wema and Unity Bank Plc to recapitalize.
Asset Management Corp. of Nigeria, established last year to buy bad debts from the lenders, on Dec. 31 signed agreements with 21 of the banks, including Wema, to purchase part of their loans. Amcon, as it’s known, bought about 2 trillion naira of debt, the equivalent of 65 percent of the banking industry’s total non-performing loans as of March last year, for 800 billion naira in zero-coupon bonds, Investec Asset Management frontier-markets analyst Mishnah Seth said in a Jan. 19 note.
The central bank in September told banks to choose whether to operate as regional, national or international lenders as part of changes to the industry, with minimum capital requirements ranging from 15 billion naira ($97 million) for regional banks to 100 billion naira for international operators.
Wema Bank shares gained for a second day, advancing 6 kobo, or 4.3 percent, to 1.45 naira by the 2:30 p.m. close in Lagos, extending its gain this year to 12 percent. The stock reached a record of 15 naira in 2007.
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