Wema Bank Rises to 1-Month High on Capital Approval: Lagos Mover

Wema Bank Plc (WEMABANK) of Nigeria rallied to the highest in a month after regulators in Africa’s second-biggest economy approved the lender’s capital raising, allowing investors to be given their new shares.

The stock advanced 4.1 percent to 1.02 naira by the close in Lagos, the commercial capital, the highest since Sept. 6. About 2.2 million shares traded, equal to 36 percent of the three-month daily average.

Nigeria’s Securities and Exchange Commission approved the 40 billion naira ($248 million) raised by the bank in a private placement during the second quarter, the Lagos-based lender said in an e-mailed statement. The bank’s capital now exceeds the minimum required to operate nationally, rather than only in certain regions.

“The funds will enable the bank to seek a national license and be able to compete in the industry,” David Adonri, chief executive officer of Lagos-based Lambeth Trust and Investment Co., said by phone.

Wema Bank operates mainly in western Nigeria and in the capital, Abuja. On March 15, the company said it would raise money to fund an expansion and become a national bank. It also plans to raise $200 million in Tier 2 capital over the next two years for its loan book, it said Aug. 29.

The Central Bank of Nigeria introduced modified licensing rules as part of banking reforms after a debt crisis battered the industry in 2009. Lenders are either licensed as holding companies operating local and international units, or as national and regional banks.

Wema Bank reported profit of 464.7 million naira for the half year through June, compared with a loss of 857 million naira a year earlier, it said on July 31. Its stock has risen 96 percent this year, compared with a 31 percent rally in the 192-member Nigerian Stock Exchange All Share Index. (NGSEINDX)

To contact the reporter on this story: Emele Onu in Lagos at eonu1@bloomberg.net

To contact the editor responsible for this story: Vernon Wessels at vwessels@bloomberg.net

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