News
Agusto & Co. Upgrades Wema Bank Plc To “Bbb+
In its June 2024 report, Agusto & Co., a credit rating agency, upgraded Wema Bank Plc from a “Bbb” rating issued in June 2023 to a “Bbb+” rating.
The upgrade from “Bbb” to “Bbb+” indicates an improvement in Wema Bank’s creditworthiness.
While both ratings are considered investment grade, a “Bbb+” rating is one notch higher, suggesting the bank has shown positive developments in its financial health and risk profile over the past year.
This upgrade is likely to continue enhancing investor confidence and fueling the share price rally.
In 2023, Wema Bank’s share price gained 44% year-to-date, increasing its market capitalization to N72.006 billion.
This upward trend persisted into Q1 2024, with market capitalization further rising to N109.294 billion, reflecting a 52% growth in Q1 alone.
As of June 4, 2024, Wema Bank’s stock remains the best-performing banking stock YtD and ranks 30th on the NGX, with a YtD gain of 20.54%.
The substantial increase in market capitalization and strong YtD performance suggests an appealing investment option. The upgraded rating further highlights that.
Key Factors Behind the Rating Upgrade
Some reasons for the upgraded rating, as cited by Agusto & Co., include improved profitability, lower impaired loans, a better deposit mix, etc. These are reflected in the bank’s financial statements.
The bank’s financial statements reveal a profit before tax of N43.64 billion for the year ended December 31, 2023, driven by gross earnings of N226.915 billion. Notably, about 82% of this revenue came from interest income.
- The reliance on interest income suggests that if the bank maintains or grows its lending operations, it will continue to generate substantial revenues.
- The significant profit growth in 2023 surpasses the bank’s 5-year compound annual growth rate (CAGR) of 35%.
- By Q1 2024, Wema Bank had already achieved 26% of its 2023 full-year profit before tax, indicating continued strong financial performance.
- The significant profit before tax and revenue growth, driven by interest income, highlight Wema Bank’s strong core operations, as evidenced by surpassing its 5-year CAGR.
On loans and impaired loans, the rating agency observed growth and diversification in the loan book.
Impaired loans, which increased by 8.7% during the review period, constituted 4.3% of total loans as of December 31, 2023, down from 6.1% in FYE 2022, and remained below the 5% maximum threshold.
The agency noted that the bank’s focus on the midstream segment for risk asset creation, combined with the 50.1% devaluation of the Naira, resulted in a rise in the proportion of foreign currency loans to 22.9% of the loan book, up from 12.8% in 2022.
Therefore, it highlighted the necessity for increased monitoring of exposure to the oil and gas sector due to the susceptibility of midstream oil and gas obligors to contract variations amid challenges faced by the sector.
- The loan portfolio stability indicates stability and effective risk management and suggests a lower likelihood of significant losses from non-performing loans. This aspect provides reassurance to investors concerned about asset quality.
- However, it is important to note that while foreign currency loans can diversify the loan portfolio and potentially offer higher returns, they also expose the bank to exchange rate fluctuations, which can impact profitability and asset quality. Investors should carefully consider the implications of this increased exposure.
The agency anticipates that Wema Bank will meet the new CBN capital requirement by June 2025 due to strong shareholder support and brand growth, evidenced by a 68.6% increase in shareholders’ funds to N139.3 billion from a successful N40 billion rights issue in December 2023.
Additionally, it stated that its capital adequacy ratio improved to 16%, exceeding the 10% regulatory requirement, but declined to 8.2% under stress testing.
To comply with the CBN’s directive and facilitate planned business expansion, a N150 billion capital exercise is planned for June 2024 through rights issues, private placements, and public offers.
- The significant increase in shareholders’ funds following a successful rights issue suggests strong support from existing investors. This indicates confidence in the bank’s management and prospects, which may attract new investors.
- The decline in the capital adequacy ratio under stress testing indicates that the bank’s capital position becomes weaker when subjected to adverse scenarios or stress events. This emphasizes the significance of implementing robust risk management practices to ensure the bank can withstand potential financial shocks and maintain adequate capital levels to support its operations and absorb losses during challenging times.
Overall, the rating assessment suggests that Wema Bank has demonstrated resilience and proactive measures to enhance its financial stability and compliance with regulatory requirements.
The significant increase in shareholders’ funds, coupled with plans for a capital exercise, highlights investor confidence and the bank’s commitment to growth and regulatory compliance.
However, challenges remain, particularly regarding exposure to the oil and gas sector and the need for effective risk management practices.
For investors, these developments present opportunities for growth and potential returns, but also highlight the importance of thorough due diligence and risk assessment before making investment decisions.
News
Gumi Defends Dialogue As Sole Solution To Nigeria’s Insecurity
Islamic cleric Sheikh Ahmad Gumi recently defended his past interactions with armed groups, stating he “took the bull by the horns” in 2021 as a necessary step to address Nigeria’s insecurity.
In a post shared on Facebook on Thursday, Gumi said decades of neglect of disadvantaged populations had created deep socio-economic inequalities, leaving many youths vulnerable to manipulation by external forces seeking to destabilise the country.
According to him, the widening gap between the rich and the poor has turned many young people into “ready-made foot soldiers” in cycles of violence that enable the exploitation of Nigeria’s resources.
He also criticised the political class for being largely unresponsive, while noting that the intellectual community is preoccupied with survival struggles.
Reflecting on his past efforts, Gumi said he “took the bull by the horns” in 2021 by attempting to reintegrate violent elements into society rather than allowing them to be further radicalised.
He wrote: “Nigeria for decades has ignored the underprivileged section of its society. There is a significant socio-economic discrepancy, and the society is stratified. This makes our teaming youth ready-made foot soldiers for any foreign interest trying to divide us and rule. To plunder our resources while we are involved in a vicious circle of violence.
”Unfortunately, the political class is unattentive while the intelligentsia is held hostage in the struggle for existence.
“In 2021, I took the bull by the horns in an attempt to bring some of these uncouth elements back to our fold rather than letting them be exploited by the devil.
“I still believe this is the only way out of our predicament. However, it needs the political will and determination to achieve.
“May Allah bring peace back to our nation.”
News
Court Clears Senator Ireti Kingibe To Remain Active In ADC
The Federal High Court in Abuja rejected an ex-parte application seeking to bar Senator Ireti Kingibe from participating in the activities of the African Democratic Congress (ADC).
Justice Peter Lifu declined the request from Wuse Ward leaders, ruling that such an order could not be granted without first hearing from the senator.
Instead, the judge ordered the ward leaders said to be loyal to the Minister of the FCT, Nyesom Wike, to put the senator on notice to appear in court to join issues with them on their grievances.
Justice Lifu in a ruling on Thursday held that discretion in such a request for prohibition from party activities and in political matters must be exercised judicially and judiciously.
The judge said justice would be met in the case of the plaintiffs only when the side of the defendant is heard on its merit, along with that of the plaintiffs.
Consequently, the judge ordered that Senator Ireti Kingibe should be served with all court processes by the plaintiffs to enable her become aware of the suit and to prepare her defense.
The judge fixed April 20, 2026, for the plaintiffs and the serving senator to appear before him for hearing of all applications in the matter.
Those who sued the senator in the suit marked FHC/ABJ/ CV/539/2026 are Okezuo Godfrey Anayo and Isaiah Ojonugwa Samuel, on behalf of themselves and ward members as plaintiffs. The senator is the sole defendant.
In their ex-parte application, Kingibe representing the FCT in the Senate was said to have been suspended on March 10, 2026 by her Wuse Ward executives following allegations of anti-party activities and disregard of your cnstitution of the ADC.
In the ex- parte application filed on their behalf by a Senior Advocate of Nigeria, SAN, Kolawole Olowookere, the aggrieved ADC members in Wuse Ward applied for an order of interim injunction restraining Kingibe from parading herself as a member of party, pending the hearing and determination of their motion on notice for interlocutory injunction.
They also asked the judge to restrain the senator from performing any function, attending meetings or performing activities reserved for ADC members or representing the party in any activities.
Besides, the Ward Executive Committee had asked that she be restrained from further interfering with the administration of the ward, ward register and other activities.
The suit was predicated on five grounds among which are that Mrs Kingibe was placed on suspension due to anti-party activities, gross misconduct and confiscation of the ward statutory records.
They argued that the suspension followed due process as enshrined in the ADC constitution and ratified by the two thirds majority of the EXCO members.
They averred that despite the communication of the suspension to Kingibe, she has continued to hold parallel meetings, issue press statements as an ADC member, and using her security details to intimidate the executive committee.
“Her actions constitute flagrant disregard to the internal mechanism of the party,” the plaintiffs stated.
Meanwhile, a lawyer, Abubakar Marshall who claimed to be representing the senator, announced that he had filed a preliminary objection against the suit. He added that it was served on M. S. Garba, who stood for the plaintiffs at Thursday’s proceedings.
News
COAS Shaibu Hits Jos To Restore Peace, Public Confidence
The Chief of Army Staff (COAS), Lieutenant General Waidi Shaibu, visited Jos, Plateau State, on Thursday, April 2, 2026, to lead a high-powered security assessment following recent security breaches.
The visit was aimed at strengthening public confidence and reinforcing ongoing efforts to stabilize affected communities.
Colonel Appolonia Anele, acting Director, Army Public Relations, said in a statement that the visit forms part of ongoing efforts to restore calm and entrench lasting peace across the state.
According to the statement, upon arrival, the COAS was received by the Executive Governor of Plateau State, Caleb Mutfwang, in a clear demonstration of strong civil-military cooperation and a shared commitment to addressing emerging security challenges.
The statement said the COAS received a comprehensive operational briefing from the General Officer Commanding 3 Division and Commander, Joint Task Force Operation ENDURING PEACE, Major General Folusho Oyinlola, who highlighted ongoing operations and proactive measures being implemented in synergy with other security agencies to contain threats, protect lives and property, and stabilise affected communities.
“As part of his engagements, Lieutenant General Shaibu also interacted with community leaders and residents, reassuring them of the unwavering commitment of the Nigerian Army to safeguarding all law-abiding citizens.
He urged residents to remain calm, vigilant and supportive of security agencies by complying with the curfew and cooperating fully with ongoing operations and investigations, while going about their lawful activities.
The chairman of Jos North Local Government Area, Hon. Dachung Bagos, commended the COAS for the timely visit, noting that the presence of the nation’s top military leadership would boost public confidence and reinforce trust in ongoing security efforts.
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