• Wednesday, February 21, 2024
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Wema Bank interest income grew 43% on rising loans

Wema Bank interest income grew 43% on rising loans

Wema Bank’s interest income grew 43 percent to N108.04 billion in 2022 driven by the most contribution from loans and advances to banks and customers.

The tier-2 bank’s total interest income comprises loans and advances to banks and customers which contributed 79.3 percent, investments securities(19.5%) and cash and cash equivalents(1.3%).

The loans and advances to banks and customers recorded 33 percent growth to N85.1 billion in 2022 from N63.8 billion in 2021.

Investment securities grew 158 percent to N20.9 billion in 2022 from N8.1 billion in 2021 while cash and cash equivalents dipped 52 percent to N1.4 billion from N2.9 billion.

The bank’s total interest expense jumped 52 percent to N53.8 billion on the back of N45.6 billion deposits from customers, other borrowed funds (N4.7 billion) and deposits from banks(N2.8 billion).

The bank recorded gross earnings rose to N131.08 billion in 2022, indicating an increase of 42.3 percent from N92.14 percent in 2021.

Net trading income jumped 150 percent to N4 billion on the back of treasury bills (N3.5 billion), fixed income securities(N293.4 million) and foreign exchange trading (N242.1 million).

However, other income dropped 12 percent to N2.9 billion in 2022 from N3.3 billion in 2021.

Wema Bank recorded a boom in its electronic banking channels in 2022 as it generated N6.1 billion from digital platforms. The 2022 e-banking revenue represents a 79 percent increase when compared with the N3.4 billion the bank generated from electronic channels in 2021.

Behind this growth is the bank’s digital banking platform, ALAT, which gained traction and attracted more customers in the year under review.

According to the bank, ALAT recorded a 131 percent increase in the number of customers onboarded in 2022.

In addition, Wema Bank said its other card products also recorded a 98 percent increase in the number of new customers within the year.

“ALAT continues to be a key growth driver and success story for the Bank, recording a year-on-year increase of over 853,092 in the number of actively transacting customers on the platform. With the rollout of new and innovative features on ALAT, and our ALAT For Business platform, we are sure of increased growth and heightened performance on both platforms in the coming year,” Wema Bank’s Chairman Board of Directors, Babatunde Kasali said.

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“Wema Bank has always worked to put its customers first and meet their needs every step of the way, whether through their local bank branch or through ALAT, the digital banking platform. We will continue to work towards our goal of becoming Nigeria’s dominant digital banking platform, an objective that requires an unwavering focus on our digital business, a key lever for customer acquisition, retention, and engagement,” he added.

Wema Bank recorded a profit after-tax growth of 26 percent to N11.2 billion in 2022 from N8.9 billion in 2021. The bank’s profit before tax amounted to N14.8 billion, up 19 percent from N12.4 billion in the comparable periods.

Commenting on the bank’s result, Moruf Oseni, the managing director/chief executive officer of Wema Bank said, “Our 2022 results show the result of the careful execution if our medium-term strategy as we have deliberately focused on deepening on offerings to the corporate, commercial and retail segments of the market using our digital channels while ensuring best-in-class customer experience platforms to deliver improvements across all customer touch points. We expect the bottom line to improve even further in 2023.”

Wema Bank’s net fee and commission income rose to N16.6 billion, up 24 percent from N13.4 billion while net trading income stood at N4 billion, 150 percent increase from N1.6 billion in the reviewed period.

Wema Bank spent the sum of N3.3 billion on advertising and marketing, 154 percent growth from N1.3 billion in 2021. The bank’s transport and communications 38 percent growth to N778.7 million from N562.8 million in the reviewed period.

Personnel expenses rose 28 percent to N21.3 billion on the back of wages and salaries at N14.7 billion, outsourced staff cost(N4.8 billion) and pension contribution (N1.8 billion).

The bank’s total assets hit N1.44 trillion in 2022 which indicates 23 percent growth from N1.2 trillion. Shareholders’ funds also climbed to N82.62 billion, 17 percent increase from N70.36 billion in 2021.

Profit for the year attributable to Wema Bank’s equity holders rose to N11.4 billion from N8.9 billion. Earnings per share stood at N88.3 per share from N69.4 per share in the reviewed period.