Wema Bank Q3 2020 Profit Dip By 35% To N2.64bn, On Declines In Income From Trading, Fees

Wema Bank Plc, and one of Nigeria’s most resilient banks. With decades of experience and has remained innovative in delivering value to its stakeholders.
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Wema Bank Plc, and one of Nigeria’s most resilient banks. With decades of experience and has remained innovative in delivering value to its stakeholders. Wema Bank is a publicly quoted Nigerian company that has successfully built a legacy of trust and resilience that has won the loyalty of its customers. The Bank is constantly introducing products and services tailored to the needs of its customers at every stage of their lives. It is a proud partner to more than one million individuals, families, and businesses across Nigeria, helping them achieve their personal and financial goals.

The bank recently released its nine-month ended 30th September 2020 Unaudited Financial Statement to the public. The Wema bank’s Q3 2020 results show a 35 percent Year-on-Year (YonY) decline in Profit After Tax (PAT) to N2.64 billion on an 11 percent YonY decline in Gross Earning to N57.83 billion.

The 35 percent decline in PAT for the Wema bank in Q3 2020 was an indirect consequence of the 46 percent decline in earnings from Treasury Bills for the period under review. Income from Treasury Bills declined to N4.7 billion from N8.78 billion in the corresponding period in 2019 resulting in a drop of 46 percent in Net Trading Income for Q3 2020. Just as Net Fee and Commission Income also declined by 16 percent and consequently dovetailed into the bottom-line profit reduction for Q3 2020.

The 28 percent decline in Non-Interest Income, which was made up of a 16 percent YonY drop in Fee and Commission Income and 46 percent drop in Net Trading Income was more than enough to offset the savings the bank made on the flat Operating Expenses (Opex)at N26.6 billion and the 17 percent growth in Net Interest Income (which is a direct consequence of 24% rise in earning Asset) for the period.

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Here are the other highlights of the Q3 2020 results released by Wema Bank Plc

Income Statement.

  • Gross Earning of N57.83 billion, down 11% YonY, Sept 2019– N64.83 billion
  • Net Interest Income of N20.1 billion, up 17% YonY, Sept 2019 – N17.2 billion
  • Non-Interest Income of N11.43 billion, down 28% YonY, Sept 2019 – N15.79 billion
  • Impairment Charge for Credit Losses up 15% YonY to N1.87 billion, Sept 2019 – N1.62 billion
  • Operating Expenses of N26.6 billion up 0% YonY, Sept 2019 – N26.6 billion
  • Profit Before Tax down 35% YonY to N3.06 billion, Sept 2019 – N4.73 billion
  • Profit After Tax for the 9-month period also down 35% YonY to N2.64 billion from N4.09 billion
  • Earnings Per Share down 35% YonY to 9.2 Kobo, Sept 2019 – 14.1 Kobo

Statement of Financial Position

The Balance Sheet size of Wema Bank Plc however had a 9-month impressive double-digit growth for the period ended 30 September 2020. Total Assets grew 21% YTD; Deposit from Customers was also up by 24%; Customer Loans and Advances were also up by 22% YTD, while Total Equity grew by 2%.

  • Total Assets up 21% year to date (YTD) to N863.6 billion, Dec 2019 – N715.9 billion
  • Customer Loans and Advances up 24% YTD to N359.8 billion, Dec 2019 – N289.2 billion
  • Deposits from Customers up 22% YTD to N701.8 billion, Dec 2019 – N577.3 billion
  • Owner’s Equity up 2% YTD to N56 billion, Dec 2019 – N55.2 billion

 


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