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Wema Bank plans 20bn naira bond issue this month

As part of its efforts at broadening its operation base by expanding its branch network,  Wema Bank has said it plans to issue 20 billion naira ($63 million) in bonds this month, its Chief Finance Officer Mr. Tunde Mabawonku, has said.

The bank is issuing local currency bonds after scrapping plans last year to issue a $100 million seven-year dollar bond because of currency risks.

Revealing this to Reuters, Mabawonku said: “We expect to open in a couple of weeks. We are awaiting final regulatory approvals and we expect to conclude the process this quarter.”

Wema, which won regulatory approval last year to switch from a regional to a national bank, plans to re-open branches in Nigeria which it closed to become a regional player, he said.

Wema obtained shareholders’ approval in May to issue bonds or preference shares this year to raise 20 billion naira in the first tranche of a 50 billion naira programme, but market conditions then deteriorated.

The Nigerian naira has dropped 40 percent since June, when Nigeria ditched its 16-month-old peg of 197 naira to the dollar in a bid to lure back foreign investors who had fled after a plunge in the price of oil, Nigeria’s economic mainstay.

Mabawonku said the mid-tier lender was watching debt markets closely for rates, adding that it had a target break-even rate at which it wanted to issue the notes.

Nigeria’s one-year treasury bill is offering around 18 percent yield, traders say. Yields on fixed income securities have been rising in recent months with the central bank mopping up naira liquidity to lure back foreigners.

The Central Bank of Nigeria (CBN) lifted interest rates by 200 basis points last week to 14 per cent to help fight inflation, which hit a 10-year high of 16.5 percent in June.

“Yes the economy has slowed but there are still business opportunities,” Mabawonku said. “We are opening locations in areas where we are not present and we see that the population is underbanked.”

Wema, which has more than 100 branches, has also said it aimed to buy a mid-sized commercial lender to build scale.

Last week the bank reported an 11 per cent rise in half-year pretax profit to 1.30 billion naira.

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  • Today, I went to the beach front with my children. I found a sea shell and gave it to my 4 year old daughter and said “You can hear the ocean if you put this to your ear.” She placed the shell to her ear and screamed. There was a hermit crab inside and it pinched her ear. She never wants to go back! LoL I know this is entirely off topic but I had to tell someone!

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  • Today, I went to the beachfront with my children. I found a sea shell and gave it to my 4 year old daughter and said “You can hear the ocean if you put this to your ear.” She placed the shell to her ear and screamed. There was a hermit crab inside and it pinched her ear. She never wants to go back! LoL I know this is totally off topic but I had to tell someone!

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  • Hello! Quick question that’s totally off topic. Do you know how to make your site mobile friendly? My website looks weird when viewing from my apple iphone. I’m trying to find a theme or plugin that might be able to fix this issue. If you have any recommendations, please share. Many thanks!

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