Wema Bank Plc reported a robust financial performance for the three months ended March 31, 2025 with profit before tax rising by 269% year-on-year to ₦41.2 billion from ₦11.3 billion recorded in Q1 2024.
The Bank’s interest income rose by 59% to ₦110.3 billion in Q1 2025 from ₦69.4 billion in the same period last year.
This was largely due to improved yield on assets and expansion in loan book exposure and benefit from a high-interest rate environment.
Interest income now accounts for nearly 79% of gross earnings, underscoring the bank’s heavy reliance on interest-based revenue.
However, interest expense also increased by 24% to ₦53.7 billion, reflecting tighter funding costs and an aggressive deposit mobilization strategy. Despite the increase, net interest income more than doubled, reaching ₦56.6 billion compared to ₦26.1 billion in Q1 2024.
Credit Risk and Impairment Management
Net impairment loss on financial assets stood at ₦1.82 billion, up from ₦1.1 billion in the same quarter last year, as the bank maintained a cautious stance on provisioning. This slight increase reflects ongoing macroeconomic risks, including FX volatility and elevated default rates across key borrower segments.
After accounting for credit losses, net interest income after impairment stood at ₦54.8 billion, a substantial increase from ₦25.1 billion reported in Q1 2024.
Non-Interest Income Maintains Upward Trajectory
Non-interest income, comprising fees, trading income, and other revenue lines, continued to support earnings diversification. Fee and commission income surged to ₦25.1 billion, from ₦10.9 billion in Q1 2024, driven by stronger transactional volumes and digital banking fees.
Additionally, net trading income rose to ₦1.5 billion, and fair value gains on financial instruments at FVTPL contributed ₦2.2 billion, reversing the marginal losses recorded in the prior year.
Cumulatively, total non-interest income grew to ₦29.3 billion, up from ₦11.9 billion in Q1 2024 — a 146% increase that signals successful execution of the bank’s retail and digital banking expansion.
Operating Costs Rise With Growth
Operating income rose to ₦84.1 billion, up from ₦36.8 billion, but cost pressures also intensified. Personnel expenses increased by 30.6% to ₦13.0 billion, driven by wage adjustments and workforce expansion.
Other operating expenses more than doubled to ₦27.4 billion, largely due to inflationary pressure on IT infrastructure, regulatory compliance and energy costs.
Depreciation and amortisation expenses also rose by 38%, underscoring Wema Bank’s ongoing investments in digital platforms and physical infrastructure.
Despite these increases, the bank delivered a pre-tax profit of ₦41.2 billion, up from ₦11.3 billion in Q1 2024 — a significant performance improvement that demonstrates operational leverage and improved asset utilization.
Earnings and Profitability Metrics
After tax deductions of ₦5.36 billion, profit after tax stood at ₦35.85 billion, a 269% year-on-year increase. Total comprehensive income for the period was also ₦35.85 billion as no new gains or losses were recorded under fair value or translation reserves for the quarter.
Earnings per share (EPS) rose to 803 kobo, compared to 305 kobo in Q1 2024.
Outlook
Wema Bank’s Q1 2025 performance indicates a well-balanced earnings strategy with improvements in both interest-based and fee-based income. However, rising operating costs and the need to sustain provisioning discipline remain key pressure points.
The bank’s ability to continue delivering above-market growth will depend on asset quality resilience, further digital transformation, and agile cost management in a volatile economic environment.
Nevertheless, with an annualised pre-tax profit already above ₦160 billion based on Q1 results, Wema Bank is currently outperforming many mid-tier rivals in Nigeria’s banking space.
