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AGUSTO & CO UPGRADES WEMA BANK’S RATING TO Bbb+ WITH ESG SCORE OF 2

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…Confirms Stable Financial Outlook for the Bank

Following its strong 2023 financial performance, Wema Bank, Nigeria’s foremost innovative bank and pioneer of Africa’s first fully digital bank, ALAT, has received an upgraded rating from Agusto & Co, validating the Bank as Bbb+ rated with an ESG Score of 2 and confirming a stable outlook for the Bank.

Agusto & Co is a Pan-African credit rating agency and leading provider of industry research and knowledge in Nigeria and Sub-Saharan Africa.

By upgrading Wema Bank’s rating from BBB to BBB+, Agusto has confirmed that Wema Bank is of stable financial standing and more equipped than ever to keep fulfilling its duties as a commercial bank with National authorization.

This development is unsurprising as Wema Bank’s financial strength is reflected in the Bank’s FY 2023 Audited Financial Report. Among the outstanding results achieved by Wema Bank was a 196% increase in Profit Before Tax (PBT) from N14.75bn to N43.59bn translating to higher pre-tax return on average equity (ROE) and pre-tax return on average assets (ROA) from 21.5% to 43.9% and 1% to 2.1% respectively. The Bank also recorded a 220.4% increase in Profit After Tax (PAT) from N11.21bn to N33.66bn, 70.63% increase in Gross Earnings from N132.30bn to N225.75, 53.64% increase in Loans disbursed from N521.43bn to N801.10bn, a reduction in cost-to-income ratio (CIR) from 80.1% to 64.4% due to significant earnings growth despite economic fluctuations and 220.53% increase in Earnings per share from N87.2 to N279.5, among other indices.

According to Agusto & Co, “The upgrade of Wema Bank’s rating to Bbb+ is underpinned by improved profitability despite macroeconomic headwinds, lower impaired loan ratio, better deposit mix, strong shareholders’ support as reflected in the successful rights issue exercise and perpetual bond issuance. We have also attached an ESG score of ‘2’, reflecting our view that environmental, social, and governance issues have a minimal impact on Wema Bank’s rating”.

Affirming the Bank’s commitment to providing stakeholders with optimum returns, Moruf Oseni, Wema Bank’s MD/CEO, expressed the Bank’s gratitude to Agusto & Co for acknowledging the strong progress made by the Bank. “Wema Bank is on a journey to the top and we are driven by a commitment to delivering exceptional value, exceeding expectations, and providing optimum returns to every stakeholder—shareholders, customers, employees, and partners alike. It is this commitment that has reflected positively in our numbers and will propel our growth over the next decade”.

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Banking and Finance

Fidelity Bank public offer, rights issue to open Thursday June 20

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Nigeria’s 6th largest bank, Fidelity Bank Plc will on Thursday, June 20, 2024 open its public offer and Rights Issue.

As part of this capital raising process, Fidelity Bank will same Thursday, June 20, 2024 at the NGX hold a Facts Behind the Offer presentation.

According to an article posted on the Businessday website and authored by Iheanyi Nwachukwu, 3.2 billion ordinary shares of 50 kobo each will be offered in the ratio of 1 new ordinary share for every 10 ordinary shares held as of 05 January 2024, at N9.25 per share under the Rights Issue,

For the public offer, 10 billion ordinary shares of 50 kobo each will be offered to the general investing public at N9.75 per share.

Stanbic IBTC Capital is the Lead Issuing House to the Combined Offer, whilst the Joint Issuing Houses include Iron Global Markets Limited, Cowry Asset Management Limited, Afrinvest Capital Limited, FSL Securities Limited, Futureview Financial Services Limited, Iroko Capital Market Advisory Limited, Kairos Capital Limited and Planet Capital Limited.

The acceptance and application lists for the rights issue and public offer which will open on Thursday, June 20 will close on Monday July 29, 2024.

The bank recently concluded all necessary arrangements to raise a total of up to N127.100billion by way of a rights issue to existing shareholders and a public offer (the combined offer).

The combined offer is a part of the bank’s strategy to increase its share capital base in compliance with the revised minimum capital requirements for Nigerian commercial banks introduced by the Central Bank of Nigeria (CBN) on March 28, 2024.

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Banking and Finance

WEMA BANK concludes 1st tranche of Capital Raise Programme

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LAGOS, NIGERIA – 14th June 2024 – Wema Bank PLC (Bloomberg: WemaBank: NL) (“Wema” or “the Bank”) announces the allotment of its N40billion Rights issue programme.

-Raises N40billion through a Rights Issuance process.
-Part of its larger 2-year; N150billion Capital programme.
Rights fully subscribed.
-Expected to Commence concluding tranche of additional Capital in Q4, 2024.
-Corporate Ratings affirmed by Fitch at BBB & Upgraded by Agusto to BBB+

Wema Bank, Nigeria’s foremost innovative bank and pioneer of Africa’s first fully digital bank, ALAT, has successfully concluded the first tranche of its recapitalisation exercise having secured all relevant regulatory approvals for the allotment of its N40bn Rights Issue which was initiated in December 2023.

In view of macroeconomic conditions, the Central Bank of Nigeria (CBN) in March 2024, launched a recapitalisation programme requiring commercial banks to raise fresh capital in alignment with the minimum requirement for their respective banking licenses, within a 24-month timeline spanning April 1, 2024, to March 31, 2026. The goal of this recapitalisation programme is to simultaneously boost the Nigerian economy and strengthen the Nigerian financial services industry.

As a forward-thinking and pioneering bank, Wema Bank in December 2023 launched a N40bn Rights issue which has now been approved by the Central Bank of Nigeria and the Securities and Exchange Commission (SEC). With this remarkable development, Wema Bank has now successfully raised the 1st tranche of its plan in the minimum requirement laid down by the CBN.

In a statement made to the public by the Bank, Moruf Oseni, Wema Bank’s Managing Director and CEO, iterated the Bank’s resolve in retaining its Commercial Banking license with National Authorisation, adding that the N40bn Rights Issue is a step in that direction. “We are delighted to announce the conclusion of the 1st tranche of our Capital Raise Programme, after obtaining the relevant approvals of all regulatory authorities. Our move to commence our Capital Raise Programme very early demonstrates our push for excellence and with a strong emphasis on our digital play, we are set to amass more successes in the coming months.”

“We were impressed by the vote of confidence given by our shareholders during the 1st Rights Issue exercise as our shares were fully subscribed. In addition, we obtained the approval of shareholders at our 2023 Annual General Meeting (AGM) to raise an additional N150billion to meet the capitalisation threshold set by the CBN. The process is expected to be completed within 12-18 months. We are committed to providing optimum returns for every stakeholder and the successful conclusion of this N40bn Rights Issue is a bold step in the right direction.”

In addition to the upward trend in the Bank’s financial performance and the success recorded so far in its recapitalisation exercise, Wema Bank’s corporate rating was recently upgraded to BBB+ by Pan African credit rating agency, Agusto and Co, and retained at BBB by international rating agency, Fitch. Over the medium to long term, Wema Bank is positioned to not only dominate the digital Banking space but also the Nigerian financial services industry at large as it translates its industry leadership to significant market share.

Wema Bank is a leading financial services entity with banking operations across Nigeria, its leadership position in the digital banking space speaks to its aspirations to liberate Nigerian businesses and entrepreneurs by making digital platforms widely available.

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Banking and Finance

Fidelity Bank records largest single-day turnover volume of over 600 million shares.

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Fidelity Bank was by far the most traded stock in the NGX on Monday, 10 June 2024, with a turnover volume of about 605.257 million shares, even as the stock gained 6.52% to close at N9.80.

Since announcing its public offer and rights issue program, the bank’s stock has seen significant market activity. For the week ending June 7, 2024, it emerged as the top-traded stock, with a turnover volume of 229.613 million shares.

After Fidelity Bank, Access Holdings recorded the highest turnover volume in the market with 93.067 million shares. It was followed by UBA, which recorded a 2.86% gain and a turnover volume of 58.726 million shares.

Nigerian Breweries which posted a 2.38% posted a turnover volume of 45.256 million shares, and Zenith Bank with a 4.66% gain posted a turnover volume of 16.079 million shares.

In terms of turnover value, Fidelity Bank posted a N6.025 billion turnover value, while Access Holdings posted a turnover value of N1.744 billion. Nigerian Breweries recorded N1.27 billion, UBA – N1.26 billion, and Stanbic IBTC posted a turnover value of N572.92 million with a 0.57% gain.

For stocks worth over one trillion, trading sentiment was quite positive, however, eight out of the ten stocks were left unchanged. GTCO Holdings posted a 0.13% and Zenith Bank posted a 4.66% gain.

Other members of the category, Airtel Africa, BUA Cement, BUA Foods, MTN Nigeria, Geregu Power, Transcorp Power, Seplat Energy, and Dangote Cement posted no price changes.

The top-tier banking stocks recorded gains all-round, as UBA, GTCO, Access Holdings, and Zenith Bank posted 2.86%, 0.13%, 9.86%, and 4.66% gains respectively. However, FBNH recorded no price change.

The FUGAZ stocks recorded a turnover volume of 181.488 million shares.

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