Table of Contents
Key Points
- Nigerian gambling magnate Kessington Adebutu loses $2.73 million as naira devaluation hits Wema Bank stake.
- Wema Bank's 54.46% stock surge loses ground in dollar terms due to a 48.54% naira depreciation.
- Adebutu's holdings rise N11.08 billion in naira but fall $2.73 million in dollar terms due to currency fluctuations.
Nigerian gambling magnate Kessington Adebutu, founder of Nigeria’s oldest gaming company, Premier Lotto, has seen his wealth take a significant hit this year. The devaluation of naira has wiped out gains from his stake in Wema Bank, resulting in a $2.73 million loss.
Adebutu holds a 28.25 percent stake in Wema Bank through Neemtree Limited, a special purpose vehicle he established in 2013 for targeted investments. His 3,632,682,768 shares in the bank have lost $2.73 million in value since the start of the year.
This sharp decline, driven by the Nigerian naira's depreciation against the U.S. dollar, has erased previous gains in local currency terms, underscoring the broader economic challenges faced by Nigeria’s business leaders.
Currency devaluation weighs on Wema’s gains
Over the decades, Wema Bank has evolved into one of Nigeria’s leading financial institutions, boasting Africa’s first fully digital bank, ALAT, and establishing itself as one of the country’s most resilient banks with decades of experience in the financial services sector.
Despite a 54.46 percent surge in its stock price year-to-date, rising from N5.60 to N8.65 in local currency, the picture changes when viewed through the lens of U.S. dollars. The 48.54-percent depreciation of the naira against the dollar has significantly eroded these gains in dollar terms.
When adjusted for the currency devaluation, Wema’s share price drops from $0.0064 to $0.0056—an 11.83 percent loss. This decline has pushed the bank’s market capitalization below $120 million, diminishing shareholder value, including the market value of Adebutu’s stake.
Adebutu sees currency impact on Wema holdings
While Adebutu's stake in Wema Bank increased by N11.08 billion, from N20.34 billion to N31.42 billion in naira terms, his holdings took a significant hit in dollar terms, decreasing from $23.07 million at the start of the year to $20.34 million—a $2.73 million loss. This contrast underscores the impact of currency fluctuations on his investment.
Despite this, Adebutu remains one of the wealthiest investors on the Nigerian Exchange (NGX). The decline underscores the dual realities of Nigeria’s markets—local currency gains are often offset by the naira’s depreciation against the dollar, highlighting the currency risk faced by both local and foreign investors.
