WEma Bank wants to scale up size

Nigeria’s Wema Bank is aiming to buy a mid-sized commercial lender to build scale and will seek shareholder approval next month to enter acquisition talks, its chief financial officer said on Monday.

“Wema Bank is keeping a close eye on various offers for sale in the market,” CFO Tunde Mabawonku told Reuters.

State-backed “bad bank” AMCON is seeking prospective investors to buy Keystone Bank, the last of Nigeria’s nationalised banks yet to be sold, while rival lender Unity Bank has sought shareholder approval to start merger talks to shore up its capital base.

Other opportunities could be thrown up by the central bank’s June deadline for three commercial banks to recapitalise after they failed to hit a minimum capital adequacy rate of 10 percent.

Mabawonku said that mid-tier lender Wema, which won regulatory approval last year to switch from regional to national bank, has suspended plans to issue foreign currency bonds because of currency risk and will instead stick to local bonds.

The bank will seek shareholder approval to issue bonds or preference shares this year and aims to raise 20 billion naira ($100 million) in the first tranche of a 50 billion naira bond programme.

“We are in the process of completing documentation and we hope to file with the Securities and Exchange Commission (SEC) in a couple of days,” Mabawonku said.

Wema plans to hold a shareholder meeting on May 5, it said in a notice