Wema Bank Plc’s ongoing Rights Issue of 14.29 billion shares at N10.45 each has sparked concerns among some shareholders and market watchers about potential equity dilution and urgency in meeting regulatory capital thresholds.
The offer, which closes on May 21, 2025, allows shareholders to buy two new shares for every three held as of March 5. If fully subscribed, the bank expects to raise over N149 billion, a move it says will support its digital transformation and strengthen its capital base.
However, analysts say the large volume and aggressive pricing of the offer suggest a rush to shore up capital, possibly to meet the Central Bank of Nigeria’s (CBN) recapitalisation directive. With market volatility and weak investor confidence, some stakeholders question whether the bank could have pursued more strategic or phased fundraising options.
“The deep discount could hurt existing shareholders who cannot afford to take up their rights, effectively diluting their stakes,” a Lagos-based investment analyst noted.
Moreover, Wema’s reliance on a Rights Issue, instead of attracting institutional investors or foreign capital, could reflect limited access to long-term funding, a concern given rising cost pressures and intense competition in Nigeria’s banking sector.
While Wema Bank insists the move is proactive and growth-oriented, the outcome of this offer may test market confidence in the bank’s long-term strategy and capital strength.
