By Amechi Ogbonna
Managing Director and Chief Executive, Wema Bank Plc, Mr. Segun Olukotuyi, has assured prospective investors in its proposed N50 billion tier 2 capital issue that the bank has put in place concrete strategies to guarantee sustainable profitability. This assurance, he said arises from the fact that the management has enhanced its corporate governance structures to a level that no bad borrower can access credit from the bank.
Speaking at an interactive session in Lagos recently, Olukotuyi said his team which piloted the affairs of the bank in the last seven years has a compelling story to tell Nigerian and the Diaspora business community on why the offer would be a success.
According to him, the capital raising is intended to further boost Wema Bank’s growth at a time its profit rose by 2.7 per cent in the first half of the year in an environment with average inflation rate of about 12 per cent.
“Times are hard but you don’t need to run away from your customer. We advise customers to watch their accounts. We also control our costs using technology to drive activities such that meetings that ordinarily would have entailed traveling are now conducted through conference call,” he said.
According to him, the number of the bank’s customers has increased since the coming on board of the current management as he hopes the new capital injection would further improve service delivery to customers.
Wema Bank, according to its chief executive, intends to raise about N20 billion in debt capital and another N30 billion in equities in the months to come in recognition of the nation’s weak capital market buy sentiments, which are not buoyant today to raise the amount required for the business.
“We are pre-selling the offer and the response we are getting is encouraging. If we go for tier 1, which is equity; it may lose value because demand is low.
“We have spoken to our investors and showed the compelling story of Wema. We have been in the business for seven years and every year we are adding value. We are optimistic it will be a success. We are also going to be competitive with our pricing,” he said.
On what the bank is doing to secure its platforms from hackers, the Managing Director said it was collaborating at the level of Bankers Committee to boost security of platforms even as he noted that fraud cannot be totally eliminated from the banking system.
He also said the bank has already developed a credit appraisal process that enables it to operate within approved limits such that no one gives out facilities that cannot be recovered at maturity.
While admitting that some loans would still go bad in the industry, Olukotuyi said his management can only give loans after being convinced it will be paid back. Although some loans would still go bad but we don’t deliberately do things to aggravate the situation.
“We need to control the movement of illicit cash because some of these monies go to finance terrorism. Only three fund transfers agencies are registered. It does not limit other unregistered ones from applying for registration. We are not limiting them but we need to know who we are doing business with. So every Nigerian should support the central bank to monitor illegal fund transfer. Although it will affect remittances in the short run but it will help monitor who is sending money to the country and for what purpose.”