Wema Bank has announced its unaudited financial results for first half of 2016.
The bank reports 10 per cent improvement in profitability on the back of 42% growth in fee income.
Speaking on the achievement, Wema Bank Managing Director, Segun Oloketuyi observed that 2016 financial year has been a rather eventful one for the Nigerian economy.
He said: “The year has been characterized by deceleration on a number of economic indicators coupled with increasing energy costs, intensified by rising inflation, all within a tough operating environment. The banking industry has also not been exempted from these challenges.”
Oloketuyi noted that in spite of the challenges, Wema Bank has been able to deliver a modest improvement in the first half of the year as interest income grew by 15.2% from N17.5 billion in H1 2015 to N20.2 billion in the current period, while fee and commission income improved significantly by 42.3% from N2.2 billion in H1 2015 to N3.1 billion in H1 2016.
“This growth in non-interest revenues was driven by our ongoing initiative to enlarge our footprint in the retail space while keeping customers at the heart of our operations. We believe that this is where we will continue to win in the marketplace.
“We continued to closely monitor our costs as we optimize our operations. Operating expenses grew from N11.1 billion in H1 2015 to N11.4 billion at a rate of 2.7%, lower than Year-To-Date inflation rate of 13.26%.
“We achieved this through the continued migration of customers to alternative channels and deliberate efforts at reducing our cost to serve. These efforts are reflected in our Profit before Tax growing by 11% to N1.3 billion from N1.2 billion in H1 2015.
“While we have increased our loan to deposit ratio from 65.1% in December 2015 to 67.5% as at June 2016, our emphasis on selective risk creation ensured we kept our Non-Performing Loans (NPL) ratio below 3%, which is significantly lower than the industry average.
“We expect that this risk underwriting discipline should continue to serve as a foundation for us to deliver consistent satisfactory results to our stakeholders in the second half of the year.
“We are also delighted by the affirmation of our current investment grade rating by Fitch rating agency; a ratification of the sustained performance over the last few years.
“We commence the second half of the year with a sense of cautious optimism; well aware that the economic fundamentals point to an economy heading for further slowdown, yet hopeful that additional fiscal initiatives will be implemented to stimulate growth. We are awaiting final regulatory approvals for our debt capital raise and we expect to conclude the process this quarter.
“Wema Bank is continuously being transformed and while we are pleased with the current results, we are aware of the tough task ahead. We remain committed to all our stakeholders in delivering value across board.
“The focus on growing our retail base and engaging our customers through mobile and alternative platforms should yield benefits to the bottom-line as we also continue to monitor and manage our risk portfolio and asset quality.”