Wema Records 20% Profit Growth, Gets Shareholders’ Nod on Capital Reorganisation

MARKET NEWS 

Shareholders of Wema Bank Plc have approved the  bank’s  Scheme of Capital Reorganisation at an extra-ordinary general meeting (EGM) in Lagos last Friday.

 With this approval, Wema Bank would give effect to the creation of a Capital Reduction Account (CRA), the transfer the negative balances in the retained revenue account to CRA to effectively setting-off these balances against the share premium account.

The exercise is expected to make shareholders alongside the investment community witness a more efficient balance sheet, improvements in the bank’s performance ratios as the plough back of successive years’ profits lead to the continued growth of the Wema brand. In addition, the Bank would also be well positioned to commence payment of dividend payments.

Meanwhile, the bank released its nine months results ended September 30, 2017.

The financial institution posted 19.7 per cent growth in gross earnings to N45.38 billion from N37.8 billion in 2016. Interest income rose by 16.7 per cent, while non-interest income improved by 35.7 per cent. Profit before tax rose by 20.8 per cent to N1.80 billion from N1.49 billion, while profit after tax grew by 20.4 per cent to N1.53 billion, from N1.27 billion.

Commenting on the results, the Managing Director/CEO, Segun Oloketuyi  said despite the economic conditions, Wema Bank continues to show signs of resilience, evidenced by its growing brand acceptance and increased customer patronage.

“Gross earnings grew by 16.79 per cent  from N37.89 billion in Q3’2016 to N45.38 billion as at Q3’2017. This was supported by increased contribution from non-interest income which rose by 35.74 per cent. The high interest rate environment continued to impact earnings, as interest expense increased year on year. Despite this, the Bank recorded a growth in Profit before Tax (PBT) by 20.81 per cent. We expect that as interest rates trend downwards, our funding cost will decline, leading to improvements in our margins,” he said.

On the service delivery front, Wema Bank was recently ranked 8^thposition in the annual KPMG industry customer service annual survey from 13^th position in 2016, a development Oloketuyi said  is  a “further attestation of our processes, product & service offerings, which has afforded us increasing market penetration. We expect a top-5 finish by 2018, and we have begun working, to achieve this feat.”

According to him, the delivery on incremental innovations on ALAT remains a priority to them, with the roll-out of version 2.0 this last week.

“We believe the launch of ALAT 2.0 is a demonstration of our continued resolve to using technology and innovation – our key strategic determinants, in ensuring continued customer acquisition and reducing our cost to serve. Customer acquisition on ALAT remains strong, with an average of 30,000 opened monthly. We remain excited, as we remain on course to achieve the set year-end target of 350,000 accounts,” he added.