| LAGOS, April 7
LAGOS, April 7 Wema Bank aims to grow loans
between one and two percent this year, after it achieved 22.3
percent growth last year, to conserve its capital as Nigeria
enters a second year of recession, a senior executive said on
Chief Finance Officer Tunde Mabawonku said the bank had
repaid a 50 billion naira ($164 million) seven-year loan it got
from the central bank last year which knocked its capital ratio
to 11.1 percent at the end of December from 15.1 percent a year
He said higher loan charge in 2016 also affected capital
ratios which were still above a 10 percent regulatory limit.
"We intend to do a 20 billion naira issue by end of second
quarter or early third quarter," Mabawonku told Reuters.
The debt raise will boost capital ratios to 14 percent, he
said, adding the mid-tier lender needed about 8 billion naira to
reach that level. Mabawonku said it would also raise equity
afterwards, likely next year.
The bank managed 6.5 billion naira in debt last year due to
high interest rates. Mabawonku said Wema had
registered a 50 billion naira bond programme and has appointed
advisers for the debt sale this year.
Wema on Monday posted a pretax profit of 3.28 billion naira
for 2016 up from 2.99 billion naira a year ago.
Shares in Wema have underperformed the broader
market both this year and in 2016. They have fallen 7.4 percent
since the start of January while the main index is
down 4.2 percent.
Wema shares slumped 46 percent last year as the banking
sector in general, and smaller lenders in particular, came under
pressure from the currency crisis and economic slowdown.
Africa's biggest economy entered its first recession in 25
years in 2016, brought on by low oil prices, which has hammered
its foreign reserves and created chronic dollar shortages,
frustrating businesses and individuals.
($1 = 305.20 naira)
(Editing by Susan Thomas)