Wema Bank Gets ‘A’ Rating Upgrade from Agusto & Co.
Nigerian lender's profit surges 116% as capital raise and improved liquidity drive credit upgrade
Agusto & Co. has upgraded Wema Bank’s long-term credit rating from A- to A, marking a significant milestone for the Nigerian lender whose financials have shown considerable improvement across key performance indicators.
The rating agency cited stronger profitability, improved liquidity, and a successful capital raise as the primary drivers behind the decision, reflecting growing confidence in the bank’s financial standing despite a challenging macroeconomic environment.
Wema Bank recorded a profit before tax of N221.8 billion, a year-on-year jump of 116.4%, one of the most impressive growth figures posted by a mid-tier Nigerian bank in recent times. The bank’s shareholders’ funds stood at N620.5 billion, while its Capital Adequacy Ratio of 28.1% placed it well above the minimum regulatory requirement set by the Central Bank of Nigeria. The loan book expanded by 45.2% to N1.8 trillion, signalling active growth in the bank’s lending operations.
A key factor in the upgrade was Wema Bank’s successful capital raise, which exceeded the CBN’s N200 billion recapitalisation benchmark. The exercise, which has tested several Nigerian lenders, demonstrated investor confidence in the bank’s direction and strengthened its ability to withstand financial shocks.
Despite the positive momentum, Agusto & Co. highlighted rising impaired loans as an area requiring careful management. Stage 3 loans climbed 35.5% to N88.1 billion, a reflection of the broader strain that currency depreciation, inflation, and elevated interest rates have placed on borrowers across Nigeria. The agency noted that macroeconomic pressures remain a key risk that the bank must continue to navigate prudently.
For Wema Bank, the rating upgrade carries practical significance. A stronger credit profile typically opens the door to funding at more competitive rates, improves its attractiveness to local and international investors, and reinforces its competitive position within Nigeria’s banking sector.
It also signals to the broader market that the bank’s balance sheet is on an increasingly solid footing, supporting its ambitions for further growth and expansion in the period ahead.
