Wema Bank Plc has released its unaudited financial results for the six months ended June 30th, 2017, showing a growth of 10.4% in profit after tax on the back of a 26% growth in interest income.
The financial house’s profit after tax soared from N1.1billion in 2016 to N1.2 billion in 2017, the bank’s interest income appreciated from N20.2 billion as at June 2016 to N25.4 billion in June 2017.
A breakdown of the Bank’s statement of comprehensive income further revealed that, income from Wema Bank’s Net Fee and Commission and other Income contributed to the Bank’s improved profitability.
The Bank’s operating income that stood at N13.4billion in June2017as against N12.7 billion in the same period of the prior year was thus boosted by the Bank’s Net fee and commission income which rose to N3.9 billion from N3.1 billion and Other income which appreciated 85 percent to N589.3million from N319.2million also in the period under review, despite a 24 percent reduction in Net Trading income that fell to N527.1million from N695.6million in June 2016.
Total operating expenses however increased by 5 percent to N11.965 billion in June 2017 compared with N11.392 billion the previous year as the bank continues to contend with Diesel Expenses, General Administrative and other business expenses which increased from previous year.
The Nigerian lender’s statement of financial position as at 30th June 2017 also indicated that total assets dropped 2.2 percent from N391.8 billion in 2016, to N383.2 billion in 2017.
The bank’s results showed that the asset decline was on the back of a significant drop in the lender’s unrestricted balances with Central Bank (CBN) that dropped 80.5 percent to N4.2 billion as at June 2017 from N21.4 billion in June 2016 in a bid to measure up with mandatory restricted balances stipulated by the apex bank.
It was further noted in the results, that restricted deposit with CBN represents mandatory cash deposit held with Central Bank of Nigeria as a Regulatory Cash Reserve Requirements (CRR).
“The CRR rate was harmonised to 22.5% for both private and public sector funds during the year 2016. Restricted deposits with Central Bank are not available for use in day to day operations.” The bank stated.
Other highlights from the statement of financial position was a 67.2 percent increase in the Deposits from banks that stood at N40.2 billion against N24.0 billion in H1 2016, Deposits from customers declined slightly to N251.7 billion fromN253.8 billion while shareholders’ funds increased by 5 percent to N49.7 billion from N47.2 billion in the corresponding period of the past year.
Commenting on the results, the MD/CEO, Segun Oloketuyi provided further insights into the performance of the Bank during the period.
“In the first half of the year the Bank operated, in an uncertain and challenging domestic economic environment. While we recorded notable improvements in the second quarter of the year, especially around foreign currency management, the execution of fiscal policies and the continued tight monetary policy impacted on consumers’ disposable income and invariably on banking sector performance. Despite the relatively tough climate, Wema Bank recorded success on a number of financial and non-financial priorities.”
Oloketuyi noted that, Gross Earnings recorded stable growth, increasing by 25.17% from N24.26 billion (H1’2016) to N30.37 billion.
