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Wema Bank earnings up by 6.1% in Q1

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Wema Bank earnings up by 6.1% in Q1

 

Wema Bank Plc has released its Unaudited first quarter (Q1) 2016 financial results with Gross earnings increasing by 6.1% to ₦11.3 billion compared with ₦10.6 billion in the same period last year.

Highlights of the results showed Gross Earnings at N11.241 billion, up by 5.80% compared with Q1 2015; Interest Income N9.657 billion, up by 8.17%; Operating Expense N5.139 billion, down by 2.19%; Profit before Tax N505.329 million, down by 17.87%; Earnings Per Share at 4k down from 5k.

Others include; Total Asset  N360.313 billion down by 9.18%; Loans and Advances N161.403 billion, down by 13.04%; Customers Deposits N248.480 billion, down by 12.81%; and Shareholders’ Funds N46.469 billion up by 0.88%.

Segun Oloketuyi (MD/CEO), Managing Director/Chief Executive Officer in his comment said, “Considering the challenging operating environment led by weaker oil prices, a tight monetary policy and rising inflation, WEMA Bank has been able to deliver top line growth with Gross earnings increasing by 6.1% to ₦11.3 billion compared to ₦10.6 billion in the same period last year.

“We have continued to grow our retail volumes in 2016; while the number of new accounts and card activations have increased by over 50% and the deployment of alternative platforms have also grown by 15%. We remain focused on keeping our cost profile under check while gradually growing the asset portfolio where we see optimal opportunities.

“While concerns remain, as we progress in the financial year around: rising inflation due to the impact of higher energy, transportation prices and a slower GDP growth due to a lack of stimulus, we remain focused on executing our strategies to drive economic production. Despite these headwinds, we believe that we will improve our 8.2% growth in interest income over Q1 2015 which will translate into improved net interest margins and consequently, improving profitability over the course of the year.”

Similarly, Mr Tunde Mabawonku, Chief Financial Officer of the bank said, “In spite of the challenging market conditions, the Bank grew its interest income by 8.2% to ₦9.7bn from ₦8.9 billion in Q1 2015. While trading income has not been immune from the larger macro headwinds, our diversification strategies are yielding results as fee and commission income grew by 17.1% to ₦1.35 billion from ₦1.15 billion in the same period last year.

“Our sustained commitment to optimizing costs was underpinnedby a2.2% decline in operating expenses to ₦5.14 billion from₦5.25 billion in Q1 2015 despite inflationary pressures.We experienced a year on year 4% decline in Net Interest Income to ₦4 billion, this was mitigated by a 17% growth in our Non-Interest income to ₦1.3 billion   over the same period.

“The loan to deposit ratio has held steady at 65% from 65.1% as at December 2015, in line with our selective approach to creating new risk assets. The NPL ratio increasedslightly to2.89%from 2.67% in December 2015.We believe that with on-going recovery efforts coupled with improvements in market conditions, the NPL ratio should improve in the coming quarters.

“Most importantly we will continue to focus on maximizing operational efficiency, and enhanced lending strategies to deliver stronger results as the year evolves.”

With Q1’16 largely subdued, the bank said it expected the remainder of 2016 to record improvements, stemming from the implementation of the budget and continued fiscal reforms.

“This would translate into an up-tick in risk asset growth, targeted towards identified critical and viable sectors such as manufacturing and agriculture. Furthermore, the Bank expects stronger growth in retail deposit mobilization as it continues with the expansion of its branch network and e-banking channels,” it said.

Biodun Abimbola

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