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Wema Bank doesn’t need a merger to reach N1trillion capital base – CEO

The Group Managing Director of @wemabank, Ademola Adebise, has disclosed that the lender doesn’t need Merger or Acquisition to achieve its long term target of the N1 trillion capital base.

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Wema Bank CEO Ademola Adebise, Access Bank and Diamond Bank merger, Wema Bank financial statement

The Group Managing Director/Chief Executive Officer of Wema Bank Plc, Ademola Adebise, has disclosed that the lender does not need a merger or acquisition to achieve its long term target of the N1 trillion capital base.

How Wema Bank Plc will achieve its plan: Adebise said Wema Bank‘s expansion drive and innovations are aimed at ensuring that company attains a N1 trillion capital base target it has set out for itself. According to him, the company’s growth plan is organic, ruling out any consolidation plan in the short term.

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His comment comes in the wake of the merger between Access Bank Plc and Diamond Bank Plc consolidation which took effect in March. Nairametrics had earlier reported that the two lenders were merging to form the biggest bank in Nigeria and Sub-Saharan Africa.

Note that Wema Bank‘s expansion drive will focus on the downstream oil and gas sector, the agriculture value chain, and the small and medium enterprises (SMEs) space.

“There are two ways to grow – you grow organically or you grow inorganically. What we are saying is that in the next two years, we want to double our indices through organic growth. Afterwards, if there are opportunities for M&A we will consider it.

“M&As are created by opportunities, it’s not that you will go and submit yourself to M&A. today, we are in the neighbourhood of N400 billion in assets, so we will be shooting for about N800 billion by the time we double that. We want to get into the trillion naira mark in terms of asset base, and not that we will get there through M&A.

“Last year, saw the bank declaring dividend for the first time in 15 years. The last time was in the era of Mr Tunde Lemo, also a former CBN Deputy Governor. We see this as a demonstration of all the efforts of management over the last nine years, which culminated in the payment of dividend.

“From here, we intend to be a strong retail bank, leveraging technology and innovation. Also, the next two years, we will try to double our key indices including assets, deposits, profits etc, and to play big in the retail segment. At the end of the day by 2020, we would have doubled our numbers. By this, we would then embark on opportunities in M&A for inorganic growth.

“We have key sectors of the economy that we have mapped out to achieve this growth. Also, we are trying to ensure that we have well-trained and well-motivated staff that will also be well-remunerated.”

Technology’s threat to workforce: Adebise also doused worries that technology will erode the growth of workforce if fully incorporated in all the operations of financial institutions. According to him, Wema Bank Plc has a plan that will prevent the loss of jobs to technology.

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About Wema Bank Plc

Wema Bank Plc offers a range of retail, SME banking, corporate banking, treasury, trade services, and financial advisory to its customers. The bank operates with a National Banking Licence and has a network of over 136 branches and service centres across the country.

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Olalekan is a certified media practitioner from the Nigerian Institute of Journalism (NIJ). In the era of media convergence, Olalekan is a valuable asset, with ability to curate and broadcast news. His zeal to write was developed out of passion to shape people’s thought and opinion; serving as a guideline for their daily lives. Contact for tips: [email protected]

2 Comments

2 Comments

  1. chibuike dunstan

    April 18, 2019 at 2:38 pm

    as for me, as it stands now about nigeria economy, i am am made the CBN governor, within my first three hours in office, i will increase the capital base of nigeria banks to 250billion naira. this will revival everything for i know most banks don’t have the finance or strength to support or absolve serious shock.

  2. Kunle Jimber

    April 20, 2019 at 6:50 pm

    Of what benefit will the 250bn achieve when the west even encourage midsize play by banks to create inclusiveness and opportunities.

    Typical of Nigerians, we just drop policies without focus.

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Around the World

Shell considers relocating its headquarters to the UK

Royal Dutch Shell has consistently pushed for the Dutch Government to stop taxes on dividends.

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GLOBAL GAS vs SHELL: COURT SETS ASIDE AWARD OVER BREACH OF CONTRACT, Investors, shareholders shocked as Shell reduces dividend

Oil and gas giant, the Royal Dutch Shell, is considering moving its corporate headquarters from The Netherlands to Britain. This could be a move against the implementation of dividend tax in The Netherlands.

The move was disclosed by the oil company’s Chief Executive Officer, Ben Van Beurden, during an interview with a Dutch newspaper on Saturday, July 4, 2020. According to him, the oil giant is not ruling out relocating its headquarters from the Netherlands to Britain. He said:

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You always need to keep thinking. Nothing is permanent and of course we will look at the business climate. But moving your headquarters is not a trivial measure. You cannot think too lightly about that.”

Further confirming the Chief Executive Officer’s comment, a Shell spokesman told Reuters that the oil giant is looking at ways to simplify its dual structure, as it had been doing for many years.

Royal Dutch Shell has consistently pushed for the Dutch Government to stop the tax on dividend paid to shareholders, as this makes financing dividend, share buy-backs and acquisition a lot more difficult.

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An earlier attempt by the Dutch Government to stop the dividend tax as an incentive to convince Unilever to unify its dual structure in Rotterdam, was met with an outcry by the public, who see that as a gift to rich foreigners.

It can be recalled that Shell had announced a few days ago that it might likely write down between $15 billion-$22 billion in post impairment charges for the second quarter of 2020. The impairment, which is its largest since the merger with Shell Transport and Trading Company Ltd in 2005, shows the huge adverse impact that the coronavirus pandemic has had on the oil giant’s businesses.

Also, in a move that shocked investors, Shell for the first time since the Second World War, cut down the dividend that it paid to its shareholders by two-thirds due to the negative impact of the pandemic. The decision came as a surprise to many including shareholders of the oil company which is by far the biggest payer of dividend in the FTSE 100.

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Coronavirus

Governor David Umahi of Ebonyi tests positive for COVID-19

Umahi has directed those who worked in the budget review for 2020 to immediately test for COVID-19.

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David Umahi, Ebonyi State workers will not get salaries for this reason

The Governor of Ebonyi State, David Umahi has tested positive for COVID-19, reported on Saturday afternoon.

Umahi’s Special Assistant on Media, Mr. Francis Nwaze, confirmed the news and also revealed that some associates of the governor also tested positive.

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He also said that the Governor is not showing any symptoms of the disease, though he has isolated himself in line with the NCDC protocols.

“The governor has directed his Deputy, Dr Kelechi, to coordinate the state’s fight against the disease and appealed to the citizens to take the NCDC protocols seriously.

READ MORE: Governors may push for 42% of federal allocation in new sharing formula

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“He will currently be working from ‘home’ and will be conducting all meetings virtually,” Nwaze added.

David Umahi becomes the sixth Nigerian governor to test positive for the disease, Governors of Kaduna, El- Rufai, Bauchi, Bala Mohammed and Oyo, Seyi Makinde have fully recovered while the recent cases have been the Governors of Ondo, Rotimi Akeredolu and Delta, Ifeanyi Okowa.

On Thursday, Governor Umahi announced that the state’s Executive Council was finalizing the budget review required by World Bank and said “most us broke down and are being treated of malaria.”

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He also directed those who worked in the budget review for 2020 to immediately test for COVID-19 and admitted he is expecting a second test result after he initially tested negative in March.

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Economy & Politics

Nigeria’s debt rises to $79.5 billion, as debt to revenue ratio worsens

According to data obtained from DMO, $27.66 billion (N9.9 trillion) is the total external debt.

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Nigeria's Debt to revenue ratio, DMO suspends April 2020 FGN savings bond offer

Nigeria, Africa’s largest economy’s total public debt rose to $79.5 billion (N28.63 trillion) as of the first quarter of 2020, which is March 31, 2020. This represents a 15% increase from the figure that was recorded for the corresponding period in 2019, which was about $69.09 billion (N24.94 trillion).

This was disclosed in a latest publication by the Debt Management Office (DMO) on Friday June 3, 2020.

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Nigeria has seen its debt stock rise sharply in recent years as the country tries to fund infrastructural and developmental projects and boost its fragile economy, which has been in and out of recession. The country’s economy has been projected to fall into recession again, due to the adverse impact of COVID-19 that has seen oil prices crash globally.

According to data obtained from DMO, $27.66 billion (N9.9 trillion) is the total external debt. This represents 34.89% of the total public debt stock. Whereas, $51.64 billion (N18.64 trillion) is the total domestic debt, which represents 65.11% of the total public debt.

READ MORE: Nigeria borrows N754 billion in 3-month, total debt now N25.7 trillion  

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The Federal Government accounts for 50.77% of the total domestic debt, which is $40.26 billion (N14.53 trillion), whereas the State Governments and Federal Capital Territory account for 14.34% of the total domestic borrowing which is $11.37 billion (N4.11 trillion).

Nigeria has been under a lot of fiscal crisis following the crash of oil prices triggered by the coronavirus pandemic. The oil sector accounts for about 90% of the country’s foreign exchange earnings and about 60% of its total revenue.

The country, which had lined up a series of debt issue this year, had to halt the external commercial borrowing due to oil price collapse. The Minister for Finance, Zainab Ahmed, had last week disclosed that the country would no longer go ahead with its Eurobond debt issue.

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READ ALSO: Lagos debt hits N39.6 billion, to borrow N97 billion more

The Nigerian government, for now, is focusing on the domestic markets and concessionary loans to help fund the 2020 budget deficit which is made worse by drop in revenue. In the recently approved 2020 revised budget, the federal government is expected to borrow N850 billion from the domestic market.

This rising debt has put a lot of pressure on the government’s resources as it spent $1.69 billion (N609,13 billion) to service its domestic debt in the first quarter of 2020 alone.

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Nairametrics had reported that Nigeria’s global rating is at risk due to the sharp rise in the country’s sovereign debt and a growing finance gap. According to a report from the global rating agency, Fitch Ratings, this could trigger a rating downgrade as policymakers struggle to stimulate growth and deal with the impact of low oil prices and sharp drop in revenue.

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According to Fitch, the country’s debt to revenue ration is set to deteriorate further to 538% by the end of 2020, from the 348% that it was a year earlier.

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