Wema Bank Plc said it is considering a merger or acquisition with either a financial technology company or a bank as it hits the market next month with a rights issue to raise N40 billion in capital.
This was revealed at the presentation on the bank’s 2021 half year result to investors and analysts at the weekend.
Speaking at the presentation, Wema Bank’s deputy managing director, Mr. Moruf Oseni, said the bank also has a share reduction plan ahead of the right issue scheduled for September this year.
Oseni said the share reduction is to ensure enhanced growth for shareholders.
Wema Bank today has a large number of shares in issuance, but before we float the right issue we need to get the shareholders to reduce the shares in issue and on the back of that we then issue those rights.
This will not change the shareholding structure of the shareholders. We just want to manage the number of shares in issue and that will impact our ratios. It makes sense to have more efficient shares in issue before doing the rights issuance.
“The rights issuance is expected to hit the market in September, this month of August is for us to have a court-ordered meeting to get shareholders together and agree on the scheme of the arrangement,” he said.
He added that the bank would begin consultations with shareholder groups this week.
On the planned merger/acquisition, he said: “One of our pillars is inorganic growth. It is either you merge or acquire. It is not limited to acquiring from the Nigerian financial space or with fintech. We are looking at all possible options this time around.
“A merger and acquisition in terms of inorganic growth could be with another financial player in the Nigerian banking industry or it could potentially be with a fintech or it could be the acquisition of a smaller fintech. But as time goes on, we will engage the market on that.
“We are looking at all possible options, whether you like it or not, no matter how efficient you are, in this game, we are playing skill to skill, and we also have a huge aspiration to scale up in the shortest possible time.”
Meanwhile, the bank, in its recently released unaudited results for the half year ended June 30, 2021, recorded growth of 149 per cent profit before tax.
The financial institution recorded profit before tax of N4.296 billion as at June 30, 2021, indicating an increase of 149 per cent compared with N1.728 billion in June 2020, while profit after tax went up to N3.715 billion, compared to N1.494 billion in 2020.
Gross earnings rose to N41.331 billion as against N38.151 billion, while net interest income rose to N18.305 billion, higher than N11.799 billion. Operating income rose to N25.082 billion compared to N19.328 billion achieved in H1, 2020.