Wema Bank Plc plans to raise N20 billion from the bond market by July and aims to pay a dividend this year for the first time in a decade, paving the way for an equity sale next year, its Chief Financial Officer, Tunde Mabawonku said.
Mabawonku said the mid-tier bank was focused on selling debt this year after it raised N6.2 billion in its first tranche of a N50 billion ($159 million) debt programme.
“We would want to pay dividends first to existing shareholders before raising equity in early 2019. It could be a combination of rights issues and private placement,” Mabawonku told Reuters.
He said the bank would start the process next month.
The debt issue would help Wema boost its capital ratio above its internal guidance of 15 percent, from 14.3 percent, the bank said earlier. The regulatory minimum capital ratio for Wema and its peers is 10 percent.
In July, Wema Bank said it could issue debt assuming government bond yields dropped below 18 percent with falling inflation. Yields are now at around 14 percent.
It also talked about raising equity in 2018 to bolster its capital ratio and cut its operating costs as its new digital strategy gains traction.