Oyo to invest N691.3m in Wema Bank

The Oyo state government said it will invest the sum of N691.3 million in Wema Bank.

This was confirmed in a statement on Thursday after the Oyo State Executive Council met.

The Council met on Tuesday, April 23 and approved five projects including investing in Wema Bank.

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“The sum of N691,307,039.86 will be invested in Wema Bank rights issuance programme as part of plans to secure the future of Oyo State,” the statement read.

The Central Bank of Nigeria (CBN) recently gave new directives to commercial banks for re-capitalization.

The CBN said all international banks should move their capital to a minimum of N500 billion and national banks up to a minimum of N200 billion.

The Apex Bank directed all regional banks to increase their capital to N50 billion, merchant banks (N50 billion) and N20 billion for non-interest banks operating nationally and N10 billion for those operating regionally.

To achieve this, the banks are expected to adopt one or a combination of three options.

One of the options is to inject fresh equity capital through private placement, rights issue and/or offer for subscription.

The other option for the banks is to go into mergers and acquisitions.

They could also upgrade or downgrade their license of authorisation (meaning downgrade from international bank to national or regional or reverse).

According to the Nigerian Stock Exchange, Wema Bank currently has a market capitalization of N86.1bn, which falls way below the CBN’s new directive.