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Wema Bank posts N591m profit in three months

By BusinessNews Staff on April 24, 2014

Wema Bank Plc yesterday announced a profit before tax of N590 million for the first quarter(Q1) ended March 31, 2014, compared with a loss of N853 million in the corresponding period of 2013. The result showed that Wema Bank continued to record profit in its performance in the new year having returned to fully profitability last year.

Specifically, Wema ended Q1 of 2014 with operating income of N5.9 billion, showing an increase of 48 per cent from N4 billion in the corresponding period of 2013. Net interest income rose 60 per cent from N2.66 billion to N4.26 billion, while non-interest revenue improved by 33 per cent from N1.4 billion to N1.9 billion.

Although impairment charge rose from N58 million to N189.9 million, the bank ended the quarter with a profit of N591 million compared with a loss of N853 million in the corresponding period of 2013.

This improvement in earnings reinforces the bank’s growth potential and the efficacy of its medium-term strategic transformation plan, Project LEAP, which saw the bank return to full profitability in December, 2013 and gain further market share.

Total assets of stood at N322.7 billion, as against N330.9 billion December 2013, while loans and advances were N95.2 billion compared to N95.2 billion in December 2013. Customer deposits stood at N206.3 billion.

The bank’s key performance ratios also showed improvement with cost to income ratio falling from 95 per cent to 90 per cent. Non-performing loan ratio reduced from seven per cent to 3.8 per cent, while capital adequacy ratio improved from 21.6 per cent to 26.2 per cent.

Speaking on the performance, the Chief Financial Officer of Wema Bank, Mr. Tunde Mabawonku said: “Backed by a resurgent franchise, our loyal stakeholders and a commitment to strong corporate governance and risk management frameworks, we have continued to maintain our steady growth drive with focus on growing our top line income and commitment to cost reduction. This has resulted in a profit of N590 million in the period under review, having previously recorded a loss in the first quarter of 2013.”

He said the bank’s income position is also improving with both interest and non-interest income jumping 60 per cent and 33 per cent year on year.

“With a cost of funds at 5.3 per cent and a growing net interest margin of 7.7 per cent, we are maintaining the course of sustainable growth. Our strategic transformation plan, Project Leap, aims to transform our position from a regional banking industry player to a prominent retail bank with national authorization.

“The goal is to expand organically and establish our presence in areas that have significant growth potential. Project Leap is expected to run until December 2015 and covers all areas of the bank’s operations, with particular focus on improving efficiency, growing market share, improving our footprint, increasing the capital position, re-engineering our workforce and repositioning the Wema Bank brank,” he said.

[This Day]

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