Nigeria’s Wema Bank Planning to Raise $200 Million for LoansEmele Onu
Wema Bank Plc, the Nigerian lender which raised 40 billion naira ($247.4 million) for expansion across the country, said it’s seeking an additional $200 million over the next two years to fund its loan book.
“The sum of $100 million is planned to be raised in the first quarter of next year and the balance by 2015, when we would have improved on our return on equity,” Chief Financial Officer Tunde Mabawonku said today in a telephone interview from Lagos, Nigeria’s commercial capital. “We’re looking at several options including bond, loan and debenture for funds.”
Wema Bank, which operates mainly in western Nigeria and the capital, Abuja, plans to seek regulatory approval for a national banking licence this year allowing it to operate in Nigeria’s six regions, he said. The Central Bank of Nigeria changed licensing rules as part of reforms after a debt crisis in 2009 brought the banking 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 plans to open an additional 20 branches in Africa’s second biggest economy to increase the number to 149, Mabawonku said. ‘Our loan book is planned to increase by 20 percent this year and 60 percent in 2014,’’ he said.
Wema Bank is joining other Nigerian lenders seeking to raise funds to expand branches and boost lending to the energy and power industries in Africa’s top oil producer. Banks have increased lending to the oil industry as smaller producers expand drilling. Companies such as London-based Heritage Oil Plc and Lagos-based Neconde Energy Ltd. bought stakes in fields owned by Royal Dutch Shell Plc, Eni SpA and Total SA.
The Lagos-based lender is targeting net profit of 1.3 billion naira this year, compared with a loss of 5 billion naira a year earlier, according to Mabawonku. Net profit is expected to rise by a half in 2014 to 2.1 billion, he said.
The stock fell 3.7 percent to 1.05 naira at close in Lagos, Aug. 16. It’s doubled this year, compared with the 32 percent rise of the Nigerian Stock Exchange All-Share Index.