Tier two lender, Wema Bank Plc recently held its Annual General Meeting (AGM). In response to numerous enquiries by shareholders on its not paying dividends. Group Managing Director (GMD) Segun Oloketuyi assured shareholders the bank would reward them with dividends soon. The bank had also hinted at this in its FY 2017 conference call.
Wema Bank last paid a dividend in 2004.
Oloketuyi also disclosed the bank was in the final phase of its current strategic plan.
We are now in the final stage of our three-pronged strategy; stabilise the bank (2009 2012), reposition the bank (2013-2017) and grow the Bank (2017 and beyond).
Wema will be re-opening the 2nd series of its N50 billion debt issuance program. This should commence from the second quarter of the year.
Nigerian firms have recently embarked on a bond drive lured by low-interest rates, which are trending downwards in tandem with inflation.
Why the emphasis on dividends ?
The typical retail investor is aged and has come to rely on dividends as a stable source of income. Regular payment of dividends also qualifies the stock for inclusion in the pension index.
Wema bank closed at N 0.84 in yesterday’s NSE session down 4.55%. Year to date, the stock is up 61.54%.
Results for the first quarter ended March 2018, show the bank recorded N12. 6 billion as interest income and a profit before tax of N764 million.
Wema Bank was incorporated in 1945 under the name Agbonmagbe Bank Limited. It later transformed into a public limited company in April 1987 and was listed on the NSE in January 1990.
The bank was granted a universal banking licence in 2001 but soon had to step down to a regional licence after facing operational challenges. SW 8 investments took control of the bank in 2009. In 2015, it obtained a national licence once more.