Wema Bank Plc resilience has been on display lately as evidenced in the digitally driven financial institution’s financial results.
The Bank has over 90 fintech partners in the digital space that utilize our digital wallet infrastructure and other services to drive their businesses. This reaffirms our path towards digital dominance.
As of Q3 2023, Wema bank’s total volume of transactions has reached an impressive 114 million transactions. In addition, the total value of transactions for the same period stands at a remarkable N4.7trillion.
The commercial bank achieved gross earnings of N150.90bn, a year-on-year increase of 61 percent (Q3 2022: N93.86bn).
The Managing director/CEO of the bank, Moruf Oseni commenting on the performance, said: “Our Q3 2023 results saw significant improvements with profit before and after tax growing strongly by about 130 percent and 131 percent respectively. It has been a good Q3 performance for Wema Bank with gross earnings growing by 61 percent year on year and earnings per share at 199.6 kobo.
“In addition, our cost-to-income ratio at 71.11 percent has witnessed significant improvement from the previous period. The bank has also succeeded in the completion of raising its AT1 capital amounting to N21 billion after obtaining CBN approval. This signifies a critical milestone for our organisation and it further underscores its commitment to maintaining a robust capital structure in accordance with regulatory requirements.
“The bank has also commenced its N40bn capital raising exercise with its application to SEC to approve the issue. It has consulted several critical shareholders and stakeholders, with a plan to wrap up before year end 2023.”
According to reports, amidst domestic and external macro economic challenges, Wema Bank Plc, sustained its growth trajectory in 2023 unaudited result & accounts and it is expected to surpass analysts, and shareholders expectation in the year under view.
Nigeria’s first digital bank has continued its growth trajectory and momentum across all key performance indicators and it is poised to shareholders return and stock price appreciation.
Wema Bank hits all-time high in profit before tax and profit in the third quarter (Q3) ended September 30, 2023, driven by 59.08 per cent increase in gross earnings, and 168.53 per cent growth in other income.
Targeting N22.5billion profit before tax in 2023 financial year (FY), Wema Bank reported N22.15billion in Q3 2023, an increase of 133.86per cent from N9.46 billion reported in Q3 2022.
The financial institution in 2022 FY performance declared N14.88billion profit before tax from N12.28billion in 2021FY. In 2020FY, it reported N5.93billion profit before tax from N6.76billion in 2019FY and N4.8billion profit before tax in 2018 FY.
Profit after tax also increased significantly in Q3 2023 to N18.88 billion from N8.19billion in Q3 20222, another milestone achievement for the current management of Wema Bank.
In 2022FY, Wema Bank declared N11.35billion profit, representing an increase of about 27.17per cent from N8.93billion reported in 2021FY.
With the growth in profit, the group’s Return on Average Equity increased to 29.32 per cent in Q3 2023, highest so far in the history of the lender. The 2023FY guidance is 20 percent.
However, the impressive performance in the period backed by N151.69billion gross earnings in Q3 2023, an increase of 59.08 percent from N95.35billion in Q3 2022.
The increase in gross earnings is due to an increase of 61.40per cent and 57.54per cent in Interest Income and Non-Interest Income respectively.
In the period under review, Wema Bank announced N126.67billion interest income, an increase of 61 percent from N78.48 billion in the same period prior year.
The likes of N82.71billion interest on loans and advances in Q3 2023, a growth of 36 percent from N62.25 billion in Q3 2022; N38.43billion investment securities in Q3 2023 from N15.18 per cent in Q3 2022 and cash and cash Equivalent of N3.82billion in Q3 2023, a growth of 260 percent from N1.06 billion in Q3 2022 impacted positively on interest income reported in the period under review.
Wema Bank’s interest expenses stood at N71.72billion in Q3 2023, representing an increase of 73 per cent from N41.5billion in Q3 2022, driven primarily by N59.74billion interest expenses on Deposits from customers in Q3 2023, an increase of 74 percent from N34.4billion in Q3 2023.
The interplay between interest expenses and interest income placed Wema Bank’s net interest income at N55.74billion in Q3 2023, an increase of 45 per cent from N38.47billion in Q3 2022.
Wema Bank’s net impairment loss on financial assets increased to N3.38billion in Q3 2023, a growth of 59 percent from N2.13billion in Q3 2022 as Net interest income after impairment charge for credit losses stood at N52.36billion in Q3 2023 from N36.35billion reported in Q3 2022.
Wema bank’s income mix is made up of Interest Income of 83.75per cent and Non-Interest Income of 16.25 per cent (Q3 2022: Interest Income 83.61per cent, Non-Interest Income: 16.39per cent).
Non-Interest Income stood at N24.23 billion in Q3 2023, a growth of 57.52per cent from N15.38 billion in the same period of the prior year. The growth in non-interest income was driven by Net Fees and Commission of N16.84 billion, a growth of 40.16per cent in Q2 2023 from N12.02 billion in Q3 2022; Net Trading Income increased to N0.83 billion from N0.11 billion in Q2 2022 and Other Income of N5.41 billion, a growth of 169.15per cent from N2.01 billion in Q3’2022.
Olamide Adeniji is a member of the editorial team of TheScript Newspaper