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The Central Bank of
Nigeria (CBN) has stated that it is still in the process of verifying
the raised capital of Wema Bank, a month after the deadline set for the
bank to recapitalise. The CBN had set October 30 for the bank to
recapitalise after it failed to meet an earlier deadline of September
30.

Mohammed Abdullahi,
the spokesperson of the Central Bank, said the regulatory body is still
at the process of capital raising verification.

“That is what we
are still doing. Our update on the verification of the bank’s raised
capital and confirmation on the loans it is said to have recovered is
still valid,” he said.

In first week of
November, the Central Bank stated that it would embark on a
verification process on the N7.5 billion claimed to have been raised by
the bank and the loan of N4 billion it also claimed to have recovered.

The regulatory body
had in October stated that it had granted a 30-day extension to Wema
Bank Plc to enable it conclude its recapitalisation, which ended
October 30.

“At the expiration
of the deadline, the CBN is pleased to note that Wema Bank Plc was able
to raise the sum of N7.5 billion from the Special Placement Offer,
approved by the Securities and Exchange Commission (SEC), and was
formally authorised during the bank’s completion meeting, held on
Tuesday, October 28, 2010,” according to a CBN statement.

The regulator
stated that the total subscriptions of N7.5 billion had been received
in the offer proceeds account domiciled with the Receiving Bank to the
Offer, Skye Bank Plc. In addition, Wema Bank made recoveries of N4
billion on its outstanding loans within the same period.

“Consequently, the
CBN will embark on the verification of the capital raising exercise and
confirmation of the loan recoveries made by the bank,” the statement
said.

The Central Bank
spokesperson said the full recapitalisation of Wema Bank is expected to
be concluded with the sale of some of the bank’s non-performing loans
to the Asset Management Corporation of Nigeria (AMCON), when the latter
becomes operational.

“Meanwhile, Wema
Bank’s application for a regional commercial banking licence is also
receiving the attention of the Central Bank of Nigeria. All
stakeholders are to be guided accordingly,” the statement added.

Shareholders support

Wole Ajimisinmi,
the bank’s company secretary, said the bank has been carrying its
shareholders along in its recapitalisation process.

“The last time we
had our Annual General Meeting in June, we got approval by the
shareholders to issue new shares and embark on a special placing offer,
after given the go ahead by board of directors. Shareholders also
endorsed the decision of the Board to obtain a Regional Banking licence
when the proposed new licencing regime came up,” Mr. Ajimisinmi said.

The bank’s
management said its recapitalisation process includes recovery of
delinquent loans through internal efforts, and resolution of some of
the nation’s delinquent risk assets using the AMCON window, raising
additional equity through special placing, and application for a
Regional Banking Licence.

In the banks
unaudited balance sheet for the first half of the year released in
August, gross earnings of the bank stood at N14.6 billion, and profit
after tax stood at N1.07 billion. The bank still carries a long term
facility from the CBN of N87 billion, which the bank expects to clear
using the AMCON window.