Wema Bank Posts N37.89b Gross Earnings in Q3

wema bank
  • Wema Bank Posts N37.89b Gross Earnings in Q3

Wema Bank Plc has announced a 16.36 per cent growth in gross earnings for the third quarter ended September 30, this year. The figure, N37.89 billion, is an improvement on N32.57 billion recorded in the same period last year.

The bank’s nine-month figure was driven by a 20.12 per cent and 16.79 per cent growth in interest, income, fees and commission respectively.

Its Managing Director/Chief Executive Officer, Segun Oloketuyi, said the lender’s third quarter result showed modest improvement in operating indices, despite the slowdown in the operating environment.

He also gave further insight into the numbers, adding that the domestic environment remained largely strained, as the country’s August 2016 manufacturing and non- manufacturing purchasing managers’ index (PMI) data continued to show underperformance(s) at 42.1 index points and 43.7 index points respectively.

He said inflation maintained an upward trend from 17.6 per cent (August 2016) to 17.9 per cent (September 2016), though at a slower pace (May to September 2016), as rising interest rate and foreign exchange illiquidity continue to impact prices.

“Despite the harsh operating environment, Wema Bank continues to record growth, as gross earnings increased by 16.36 per cent to N37.89 billion from N32.57 billion in the same period last year. 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.

According to Oloketuyi, 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 year-on-year 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,” he said.

Continuing, he said the bank’s prudent risk management model continued to enable us deal with the industry-wide spikes in loan defaults and attendant rise in Non-Performing Loans (NPL). He said the NPL ratio for the bank stood at 2.99 per cent as at third quarter 2016, which is below the regulatory threshold of five 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 first quarter and second quarter of 2017,” he said.

“However, we believe we would close the year with improved performance. On the capital front, we are pleased to announce that we just concluded a Tier II capital raise of N20 billion. This will boost our Capital Adequacy Ratio (CAR), currently at 13.36 per cent (pre-capital raise) and support our medium term growth

About the Author

Samed Olukoya
CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade long experience in the global financial market. Contact Samed on Twitter: @sameolukoya; Email: [email protected]

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