Shareholders of Wema Bank Plc have approved the bank’s bid to either acquire or merge with any financial/non-financial institution to expand its business. They also authorised the bank’s directors to raise additional capital in readiness to pursue the acquisition plan.
The shareholders gave the approval at the bank’s Annual General Meeting, AGM, in Lagos. Addressing shareholders at the meeting, the Chairman, Mr. Adeyinka Asekun, explained that the approval for the capital raising exercise would allow the bank to take advantage of any merger/acquisition opportunity that may arise in the course of the year. He explained that the bank would seek strategic partnerships with during the year, adding that it commenced relationship with key players in various business segments and the relationships are expected to add value to the bank in terms of brand equity and bottomline.
“As we go into 2016, I am confident that we are well positioned for better success. Our national authorisation will allow us to significantly scale up our operations across the country. However, our investment decision will be long-term in order to achieve more efficient operations, which will enable us deliver superior returns to the shareholders.” Continuing, he said: “The impact of TSA and the harsh monetary environment for large part of 2015 financial year significantly impacted the industry with large government funds sterilised from the banking sector. In spite of this, the bank recorded improvement in overall deposit volumes with a growth rate of 10 percent well ahead of inflation.”
Laying the financial results before the shareholders, Asekun said: “The bank’s earning capacity remained robust during the year despite the constraints on assets growth in 2015 due to the sustained restrictive operating environment. Gross earnings increased by eight per cent to N45.9 billion in 2015. The headline performance reflects the simultaneous growth in interest and non-interest income, which grew by 4.6 per cent and 26 per cent respectively.” He, however, stated that profit before tax declined marginally by 1.6 per cent to N3 billion from N3.1 billion, given the impact of the TSA, depressed international crude market, ever thinning margins and rising costs of operations.
Throwing more light on the M&A plan, the bank’s Chief Finance Officer, CFO, Mr. Tunde Mabawonku, said that Wema is simply positioning to take advantage of any M&A transaction that could occur during the year. He assured that the bank would dividend at the end of 2016 financial year, saying that the process for paying dividend is on-going. “If you look at the bank’s balance sheet, there is what is called negative retained earnings. Very soon, we will be coming back ton seek some scheme of re-arrangement, to move some negative retained earnings to the share premium, so until we do that, the bank will be in a position to pay dividend.