WEMA Bank Plc Unaudited Financial Results for the 9 months ended September 30th, 2016.

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WEMA Bank Plc Unaudited Financial Results for the 9 months ended September 30th, 2016.

LAGOS, NIGERIA – 21st October 2016 – Wema Bank PLC (Bloomberg: Wema NL) (“Wema’ or “the Bank”), announces its Unaudited Q3’2016 financial results. Reports 16.36% growth in gross earnings driven by a 20.12% and 16.79% in interest income and fees & commission income respectively.

Managing Director/Chief Executive Officer’s review

Wema Bank’s Q3’16 result shows modest improvement in operating indices despite the slowdown in the operating environment. Speaking on the release of the result, the MD/CEO, Segun Oloketuyi gave further insight into the numbers.

The domestic environment remained largely strained, as the country’s August 2016 manufacturing and non- manufacturing PMI data continued to show underperformance(s) at 42.1 index points and 43.7 index points respectively. Inflation maintained an upward trend from 17.6% (August 2016) to 17.9% (September 2016), though at a slower pace (May – 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% to N37.89 billion from N32.57 billion in the same period last year. The bank optimized its balance sheet, as loans to customers rose by 20.78% to N177.01 billion with interest income expanding by 20.12% to N31.93 billion compared to last year while fees and commission increased by 16.79% to N4.41 billion.

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% 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 optimization, with operating expense declining by 1.77% Y-o-Y from N17.49 billion in September 2015 to N17.18 billion in September 2016 compared to a general inflation level of 17.9% 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.

Our prudent risk management model continues to enable us deal with the industry-wide spikes in loan defaults and attendant rise in Non-Performing Loans (NPL). The NPL ratio for the Bank stood at 2.99% as at Q3’16 which is below the regulatory threshold of 5%. The coverage ratio for the Bank remained adequate at 124.82%.

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 Q1 & Q2’ 2017. 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% (pre-capital raise) and support our medium term growth plan. More information will be provided once we obtain final regulatory approval.

 

‘Segun Oloketuyi (MD/CEO)

- ENDS –

 

 

 

Financial Performance Review

 

Income statement (N’bn)

Q3’2016

Q3’2015

(Δ)

Gross Earnings

37.89

32.57

16.33

Interest Income

31.93

26.58

20.13

Non-interest income

5.96

5.99

(0.50)

Operating expense

17.18

17.49

(1.77)

Profit before Tax

1.49

1.53

(2.61)

Profit after Tax

1.27

1.30

(2.31)

Earnings Per Share

4 kobo

4 kobo

-

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