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Wema Bank Records N1.5bn Profit, Grows Deposits by 18%
By Goddy Egene
Wema Bank Plc last Friday reported its financial results for the nine months ended September 30, 2016. Despite the challenging operating environment, Wema Bank posted profit before tax of N1.494 billion, showing a marginal decline of 2.2 per cent compared with N1.528 billion in 2015. Profit after tax stood at N1.269 billion, compared with N1.299 billion in 2015.
Speaking on the results, Managing Director/Chief Executive Officer of Wema Bank, Mr. Segun Oloketuyi said Wema Bank continued to record growth amidst tough operating environment.
He said the bank’s gross earnings increased by 16.36 per cent to N37.89 billion from N32.57 billion in the corresponding period of 2015.
According to him, the bank optimised its balance sheet, as loans to customers rose by 20.78 per cent to N177.01 billion with interest income expanding by 20.12 per cent to N31.93 billion compared to last year while fees and commission increased by 16.79 per cent to N4.41 billion.
He said: “The bank maintained its commitment to innovation, introducing *945# and other digital initiatives. These efforts continue to engender confidence with our customers, leading to a growth in savings deposits by 18.10 per cent from N35.58 billion as at December 2015 to N42.02 billion as at the end of the period. The streamlining of our processes and the leverage on technology, led to improving efficiencies and cost optimisation, with operating expense declining by 1.77 per cent from N17.49 billion in September 2015 to N17.18 billion in September 2016 compared to a general inflation level of 17.9 per cent. We will continue to seek opportunities to improve our cost-to-serve through alternative channels and continued strategic improvements of our business model without compromising our service quality.”
The MD/CEO added that the bank’s prudent risk management model continued to enable it to deal with the industry-wide spikes in loan defaults and attendant rise in Non-Performing Loans (NPL).
“The NPL ratio for the bank stood at 2.99 per cent as at Q3’16 which is below the regulatory threshold of 5.0 per cent. The coverage ratio for the bank remained adequate at 124.82 per cent. Going into the final quarter of the year, we do not envisage any material improvement in the operating environment. Rather, we expect the gains of the fiscal and monetary policies to impact between Q1 & Q2’ 2017. However, we believe we would close the year with improved performance,” he said.
Oloketuyi disclosed that the bank just concluded a Tier II capital raise of N20 billion, adding this will boost its Capital Adequacy Ratio (CAR), currently at 13.36 per cent (pre-capital raise) and supporting its medium term growth plan.
