Global Credit Rating Co. (GCR) has upgraded the national scale long- and short-term issuer ratings of Wema Bank Plc, citing improved capitalisation, stronger earnings, and a stable funding structure.
The bank’s long-term issuer rating was upgraded to BBB+(NG) from BBB(NG), while the short-term rating moved to A2(NG) from A3(NG). The outlook on both ratings remains stable.
GCR also upgraded the national scale long-term issue rating of Wema Funding SPV Plc’s ₦17.675 billion Series 2 Bonds to BBB(NG) from BBB-(NG), reflecting enhanced creditworthiness.
In a statement, GCR said the ratings upgrade was underpinned by Wema Bank’s strengthened capital base following a successful ₦40 billion capital injection in 2024 and solid earnings performance. The bank’s GCR core capital ratio improved to 19.2 per cent at the end of December 2024, up from 15.5 per cent a year earlier.
Wema Bank is currently raising an additional ₦150 billion through a rights issue and private placement, a move expected to push the core capital ratio beyond 20 per cent in the next 12 to 18 months.
The bank’s operating revenue improved by 48 per cent to ₦255.8 billion in 2024, supported by a stable net interest income, which accounted for 69.2 per cent of total operating revenue. Its digital banking footprint continues to drive growth, with over 5 million customers and increased transaction volumes.
However, GCR flagged concerns around asset quality, noting a slight uptick in non-performing loans (NPLs) to 5.3 per cent as of December 2024 and relatively low loan loss reserve coverage at 55.1 per cent. Still, the bank’s liquidity position remains robust, with a liquid assets’ coverage ratio of 42.4 per cent and a strong customer deposit base.
“While macroeconomic pressures persist, Wema Bank’s stable funding base, sound liquidity, and capital enhancement efforts provide a solid buffer,” GCR stated. The Series 2 bonds, due in October 2025, have had no covenant breaches since issuance, according to a May 2025 report from the bond trustees.
Looking ahead, GCR said an upgrade could follow if the bank maintains a core capital ratio above 22 per cent and improves its asset quality. Conversely, a rise in NPLs or a drop in capital could trigger a downgrade.
The ratings reaffirm Wema Bank’s position as a resilient player in Nigeria’s banking sector, with a focus on digital innovation and prudent financial management.
Comments are closed.