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Wema Bank’s 2014 Q3 profit rises by 28.86%

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IMAGE: Wema Bank »


Wema Bank’s third quarter (Q3) 2014 profit has risen by 28.86 percent, a positive signal that the Nigeria lender’s strategic objective of giving higher returns on shareholders’ investments is yielding fruits.

The bank has been consistently recording impressive results since rebounding from the debt crisis of 2009, which nearly brought the banking industry to the verge of collapse.

For the nine months through September 2014, the bank’s profit before tax (PBT) increased by 28.86 percent to N2.50 billion from N1.94 billion as of December 31 (YE), 2013.

The driver of the bank’s bottomline performance was its ability to reduce operating costs amid tough environmental challenges.

According to an industry analyst who craves anonymity, banks get their profits eaten by huge operating expense emanating from the use of diesel oil to run their head offices and branches.

Wema’s operating expenses reduced by 17.61 percent to N16.51 billion in Q3 2014, compared with N19.93 billion as of December 2013.

Additionally, there was a 24.11 percent reduction in interest expense to N12.15 billion in Q3 2014 from N16.01 billion the preceding year, culminating in an increase in net interest income by 11.66 percent to N13.98 billion.

Cost to income ratio fell to 86.85 percent in Q3 2014, compared with 95.13 percent as of (YE) 2013, which means the bank’s operations are efficient.

Net income margin, another measure of efficiency and profitability, increased to 6.73 percent in 2014 to 5.97 percent in 2013.

 Wema, as part of its appetite for expansion and market penetration, has  opened three new branches in the last quarter, and embarked on a renovation exercise of  its branch network in key commercial and retail hubs, while  keeping a keen eye on possible opportunities in the market to grow our business.

The bank has also acquired the PCI-DSS recertification with a view to and continuously   improves on its technology and electronic payment platforms.

Further analysis by BusinessDay on the bank’s balance shows an improvement in loan book, as loans and advances increase by 30.25 percent to N128.47 billion in Q3 2014, as against N98.63 billion as of December 2013.

Deposits from customers were up by 7.70 percent to N234.50 billion in Q3 2014, as against N217.73 billion as of (YE) 2013.

Total assets were up by 6.19 percent to N351.38 billion in Q3 2014, as against N330.87 billion as of year end  2013.

The Nigeria economy is abound with opportunity for Wema Bank to tap into and spur growth as more than half of the country’s population are unbanked.

Taping into such growth environment will also help the bank increase its share of the market and maximise the value of shareholders.

Wema’s share price closed at N0.94 on the floor of the NSE, while market capitalisation was N37.11 billion.

Article Credit: Businessdayonline

Updated 4 Years ago

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Tags:     Wema Bank     PCI-DSS     Nigeria Economy     NSE