Chief Finance Officer (CFO) of Wema Bank Plc, Mr Tunde Mabawonku, has revealed his company’s intention to raise equity next year. During a conference call this week, Mr Mabawonku said before this, the bank will carry out a tier two capital raise in the third quarter of this year.
According to the senior executive of the lender, the 2018 exercise, a tier one capital raise, is aimed to strengthen the bank’s capital ratio. At the moment, the Capital Adequacy Ratio (CAR) for the bank stands at 12 percent and Wema Bank says it targets a 14 percent ratio once it raises capital this year. The lender disclosed that it cut loan growth this year to between one to two percent of total loans, down from 22.3 percent growth last year.
The CFO explained that the bank also plans to cut its operating cost as its new digital strategy, Alat, gains traction. Launched in May 2017, Alat boasts of about 120,000 accounts as at June 2017 with current balances totalling around N300 million. While tier one capital means equity or shares, tier two capital means raising of debt.