Wema Bank Plc recorded a gross earnings of N20.87 billion in half year of 2015 financial year. This is a marginal increase above N20.82 billion recorded in the corresponding period in 2014.
However, the bank’s net interest income fell by N650 million from N9.71 billion it achieved in the same period in 2014, to N9.06 billion in 2015. Profit before tax stood at N1.17 billion against N1.70 billion it recorded in the first half of 2014. But the operating expenses, put at N4.98 billion, showed a N24 million cost reduction when compared to N5.04 billion in the same period in 2014.The result also showed that the profile of loans and advances was trimmed to N134.57 billion, from N149.29 billion as at December 2014.
Also, the deposit base slid from N258.96 billion as at December 2014, to N234.10 billion, representing N24.86 billion decline, while Non-Performing Loan (NPL) ratio of 2.9 per cent indicated 0.4 per cent increase from 2.5 per cent recorded in the corresponding period of 2014.
Segun Oloketuyi, managing director and chief executive officer of Wema Bank, said the bank was able to sustain its financial performance, albeit, on a lower level compared to the same period in 2014, in spite of the tough operating environment in the period under review that is characterized by economic headwinds, regulatory restrictions and political uncertainty.
“The first quarter of the year was characterized by election-related activities and political maneuverings with limited emphasis on economic matters, while the second quarter was largely characterized by the continued pressure on the currency, the tight monetary policy conditions and the low level supply of petroleum products. All these issues affected consumer discretionary spending and indeed the growth in our Retail volumes. Due to the lack of economic policy clarity so far in 2015, investment decisions have been tentative,” he said.
He observed that the Cash Reserve Requirement (CRR) harmonization has reduced liquidity with significant impact on margins from money market investments. “We are confident that as the new administration settles into office, its policy thrust will become clearer, hence, enabling us to continue to make well informed lending decisions to mitigate risk exposures and further expand our customer base,” he said.
The bank has also made appreciable progress in its transformation project. He recalled that the bank unveiled a new corporate identity to reflect its new direction and strategic focus, as it now has a fresh, vibrant and contemporary look, which is also replicated in our approach to business. “We have also commenced the process of raising additional capital in the second half of the year to grow business. We will continue to work on other elements of our Project LEAP growth strategy as communicated to stakeholders,” he added.
By Dike Onwuamaeze