Wema Bank Price Discount at N3.55, Sets to Draw Curtain on Offer
As the market prepares to draw the curtain on Wema Bank Plc’s rights issue offer this week, there was increased market activity on the Nigerian small lender’s stock in the equities market, despite its rights offer price being N3.55 lower than the quoted price.
With a market capitalisation of N300 billion, Wema Bank is seeking to raise N150 billion as part of an effort to keep its commercial banking license in the absence of merger or acquisition deals on the table for consideration.
Its share price rose slightly week on week as investors and shareholders were caught between exercising their rights in an offer that gives existing shareholders preference to buy more shares below the stock market rate or via the Nigerian Exchange transactions.
Wema Bank Plc’s rights offer is set to close in the new week, according to the financial institution’s offer document. The gap between the bank’s rights offer price and the closing stock market quote reached N3.55 on Friday, according to MarketForces Africa Research Team’s latest update.
“It is cheaper for shareholders to exercise their rights than to purchase more shares via the stock market … investors will end up paying more for the same company stock”, stockbrokers said.
Some analysts, however, explained that more often, transactions via the open exchange give immediate access than rights offers, which are often prorated based on existing holdings.
Details from the Nigerian Exchange trading platform revealed that Wema Bank Plc’s 21.430 billion shares outstanding was priced at N300 billion at the close of the trading session on Friday. The bank is seeking to raise N150 billion—which is half of its current market value in the equities market – via rights issue offer priced at N10.45.
The Nigerian small lender share price closed at N14 in the just concluded week in the stock market as sell-side actors dominated trading activity which dragged the bank share price downward by 5 kobo.
This happened as more than 16 million shares of Wema Bank valued at N222 million were traded on Friday, with activity that was dominated by sell-side actors. Despite a few positions exited, Wema Bank posted weekly gains amidst its ongoing capital raise. Wema Bank Plc is seeking to raise additional capital to meet regulatory recapitalisation programmes scheduled to close by the first quarter of 2026.
Wema Bank holds a national banking license and is now focused on its goal of becoming a Systemically Important Bank (SIB). Cowry Asset Limited said this ambition is supported by its digital strategy, which enables it to mobilize deposits efficiently, strengthening its position in the Nigerian financial market.
With nearly eight decades in operation, the bank has a strong commitment to customer satisfaction, operating through a network of 150 branches across Nigeria, supported by advanced ICT infrastructure. The bank prioritizes long-term sustainability, social responsibility, and corporate governance, ensuring diversity across its operations.
The bank has solidified its position as one of Nigeria’s most innovative financial institutions through the launch of ALAT by Wema (ALAT), the first fully digital bank in Africa, in 2017. In its audited full-year financial statement for 2024, the bank delivered outstanding performance despite the challenging year influenced by both domestic and global events.
Wema Bank grew its interest income by 91.03% year-on-year to ₦354.63 billion on the back of a significant increase in loans and advances to banks and customers as well as investment securities. As a result, it witnessed a 139.74% increase in its profit-after-tax, which was buoyed by a substantial increase in fee and commission income and other income during the period.
Wema Bank’s total assets grew by 59.82% year-to-date to ₦3.59 trillion, funded by a larger loan book and a decent growth in its investment securities. In addition, the bank’s shareholders’ funds similarly increased by 84.08% year-to-date owing to the improved financial performance realized by the bank during the year 2024. How to Start Investing in Stocks with N10,000
