Wema Bank Nigeria Records Biggest Advance in Month: Lagos Mover
Wema Bank Plc (WEMABANK), a Nigerian lender, rose for the first time in seven days, gaining the most in one month after saying it raised funds for an expansion and plans to bolster its capital levels if it gets regulatory approval.
The shares advanced 9.2 percent to 1.07 naira in Lagos, Nigeria’s commercial capital, the biggest advance since June 27. About 4.6 million securities traded or 65 percent of the three-month daily average volume. The stock has more than doubled this year compared with 32 percent rally in the Nigerian Stock Exchange All Share Index (NGSEINDX) of 192 members.
The bank raised 40 billion naira ($249 million) in a sale of stock to selected investors and plans to increase its Tier 2 capital levels, the company said today in an e-mailed response to questions. Shareholders will be asked for approval at a meeting on Aug. 16 and the amount of funds will be announced after the country’s market regulator gives assent, according to the lender.
“Investors anticipate the new capital will facilitate the bank’s migration to a national bank and leading to better performance,” David Adonri, chief executive officer of Lagos-based Lambeth Trust and Investment Co., said by phone.
Wema Bank, which operates as a regional lender mainly in western Nigeria and in the capital, Abuja, said on March 15 it would raise 35 billion naira to fund expansion to become a national bank. The Central Bank of Nigeria introduced modified licensing rules as part of reforms after a debt crisis in 2009 brought the industry to the verge of collapse. Lenders in Nigeria are either licensed as holding companies operating local and international units, or as national and regional banks.
The lender posted a loss of 1.8 billion naira for the nine months through September last year, according to a Jan. 4 statement to the Lagos bourse.
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