Wema Bank Grows Net Profit By 56.32%, Despite N19.855bn Credit Loss Charge

Wema Bank Grows Net Profit By 56.32%, Despite N19.855bn Credit Loss Charge

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Post Views: 139 The board of Wema Bank Plc to advantage of the extended submission date for corporate filings granted by the Nigerian Stock Exchange (...

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The board of Wema Bank Plc to advantage of the extended submission date for corporate filings granted by the Nigerian Stock Exchange (NSE) on Wednesday, highlights of which was the double-digit growth in top and bottom-lines, even as profit after tax grew by 56.32%.
An analysis of the numbers showed that the net profit growth would have been much more, but for the significant impairment charge in credit losses at N19.855bn, despite dropping from N23.481bn. This was in addition to the N6.13bn net impairment loss on financial assets, which was almost double the previous year’s N3.51bn.
Gross earnings for the period climbed N23.36bn, or 32.65% up from N71.529bn in the 2018 full-year to N94.89bn; of which interest income accounted for N70.682bn, as against the N57.634bn in the preceding year, representing a growth of N13.047bn or 22.64%. Interest expense however grew by a faster N14.053bn or 45.86% from N30.642bn to N44.696bn, resulting in net interest income of N25.985bn, slightly lower than the N26.992bn.
Fee and commission income stood at N7.998bn, up from N6.507bn, the bulk of which was the N3.758bn in fees on electronic products, as against the previous N2.845bn. The growth in net trading income however reduced the impact of the huge impairment losses, rising by N9.257bn or 167.32% from N5.532bn in 2018 to N14.789bn, which was mainly the N14.521bn earned from treasury bills trading, a major leap from N4.481bn in 2018. It was followed by foreign exchange trading which fetched N252058m, a drop from N1.007bn in prior year, being the total from financial assets carried at fair value through profit or loss.
Other income dropped from N1.821bn to N1.185bn, the lion’s share of which was the N460.312m from foreign exchange revaluation, up from N156.563m.
Operating income therefore rose from N37.376bn to N44.063bn; personnel expenses climbed to N14.87bn from N12.336bn; depreciation and amortization rose to N3.316bn from N2.622bn; just as other operating expenses grew to N19.115bn from N17.619bn, driven by the N2.769bn AMCON levy, up from N2.452bn.
Profit before tax increased from N4.797bn to N6.76bn, just as income tax expense rose to N1.56bn from N1.471bn, following which net profit stood at N5.199bn to N3.326bn, representing an increase of 56.32%. Earnings Per Share soared from 8.6 kobo to 2018 from 13.5 kobo.
Total assets grew by N227.065bn or 46.45% to N715.869bn from N488.804bn, the bulk of which was the N289.239bn customer loans and advances, which rose from N252.189bn.
Total liabilities increased from N437.915bn in 2018 to N660.709bn, lifted by the customer deposits which climbed from N369.199bn to N577.283bn; following which shareholders funds rose from N50.889bn to N55.16bn.

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