Wema Bank Grows Profit Before Tax by 149 Percent to N4.3 Billion in H1 2021

Wema Bank Plc, one of Nigeria’s leading financial institutions, grew profit before tax by 149 percent in the first half (H1) of 2021, according to the lender’s unaudited financial statement released through the Nigerian Exchange Limited.

Profit before tax rose from N1.72 billion recorded in the first half of 2020 to N4.30 billion in the first half of 2021. See the details below.

Key Financial Highlights

Commenting on the results, Mr. Ademola Adebise, the Managing Director said, “We are pleased to release our results for the first half of the year. Our performance speaks to the spirit of resilience that runs through the organization as we have strongly bounced back from the covid impacted performance of the same period in 2020.

“As the economy opens back up fully, we expect to see a stronger performance for full year 2021. Over the course of the second half of 2021, the bank will continue its strong focus on the digital business, pushing for further gains in customer acquisition, consumer lending and transaction volumes while on the commercial side of the bank, we will continue to aggressively grow our commercial lending business alongside trade and other revenue lines.”

The bank recently appointed Mr. Emeka Obiagwu as an Executive Director while Prince Olusegun Adesegun & Adeyemi Adefarakan were appointed as Non-Executive Directors.

The Chief Finance & Strategy Officer, Tunde Mabawonku said “We are delighted to announce the Bank’s H1 2021 results. The performance shows growth in key financial metrics despite the challenging macro-economic environment arising from the covid 19 pandemic.”

• Wema Bank recorded YoY growth of 149% in profit before tax (PBT) to close H1 2021 at N3bn;
• Gross earnings grew by 4.94% y-o-y to ₦82bn in H1 2021 (H1 2020: ₦37.95bn).
• Net fee and commission income increased by 71.7% y-o-y to ₦40bn in H1 2021(H1 2020: ₦3.1bn), due to 112.6% increase in credit related fees, 151.5% increase in management fees, 147.7% growth in fees on financial guarantees.

According to Mr. Mabawonku, “The key measure of success for us is growth in customers and customer activity – and we are glad that we are reporting strong growth here.”

• Total liabilities grew by 4.9% to ₦9bn in H1 2021 (H1 2020: ₦909.2bn), driven by deposits from customers which grew by 0.5% to ₦808.8bn in H1 2021 (FY 2020: ₦804.8bn)
• Cost of funds declined to 5.3% from 6.4% in H1, 2020. NPL numbers remained below 5% at 3.55% while Capital Adequacy of 13.24% is above the regulatory minimum of 10%.

Income Statement

• Gross earnings increased by 4.94% (Y-o-Y) to ₦82bn in H1’2021 from ₦37.95bn in H1 2020
• Reported Profit before Tax (PBT) and Profit After Tax (PAT) of ₦30bn and ₦3.70bn, an increased by 148.8% in H1’2021 (H1’2020; ₦1.72bn PBT, ₦1.49bn PAT)
• Net-Interest Income grew by 55.2% to ₦31bn (H1’2020: ₦11.80bn)
• Non-Interest Income declined to ₦64bn from ₦8.30bn in H1’2020

Statement of Financial Position

• Deposit Liabilities up by 0.5% to ₦87bn (FY 2020: ₦804.87bn)
• Net loans grew by 3.63% to ₦15bn (FY 2020: ₦360.08bn)
• Total Asset increased by 4.76% to ₦02trn (FY 2020: ₦979.52bn)

Key Ratios

• ROAE of 14.03% in H1’2021 (H1’2020: 6.25%)
• ROAA of 0.82% in H1’2021 (H1’2020: 0.42%)
• 55% NPL ratio (H1’2020: 5.58%)
• CAR is 13.24% (H1’2020: 11.00%)

Operational Achievements

• Fitch, GCR and Agusto re-affirm Wema’s National Long-term rating at (BBB-)