Wema Bank has sustained its return to profitability with third quarter unaudited profit of N2.5 billion, a strong financial performance in the period ended September, 2014. Thanks to its turn around initiative.
The result showed that net interest income grew 71 per cent to N13.9 billion, up from N8.1 billion in September 2013. Operating income rose 26 per cent to N19 billion, up from N15 billion.
Customer deposits shot up 8 per cent to N234.5 billion, against N217.7 billion on December 2013, reflecting improving customer confidence.
This did not come as a surprise as Wema Bank increased loans and advances to customers by 30 per cent to N128.5 billion, up from N98.6 billion on December 2013.
Total assets rose 6 per cent to N351.4 billion, against N330.9 billion on December 2013.
These impacted positively on the bottom line, which balooned 345 per cent to N2.5 billion profit before tax, up from N0.56 billion in 2013.
The bank returned to profit last year and has sustained it in the third quarter of the current year. It recorded 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.
It improved on the result in the second quarter ended June 2014, and continued further to improve in the third just ended.
Wema Bank Chief Executive Officer, Segun Oloketuyi, said: “While we remain on course in achieving our growth targets as set out by our growth plan, Project LEAP, we are delighted to announce continuous quarter-on-quarter improvement in our financial performance as displayed in our Q3 results.
“Our total assets are up 6 per cent from December 2013 and loans have risen by 29 per cent in the same period.
“Profit before tax grew by 345 per cent compared to the equivalent period in the last financial year and 47 per cent in Q3 this year spurred by a 44 per cent growth in net interest income and a 51 per cent rise in fees and commission income quarter-on-quarter respectively.
“Our operations are also becoming more efficient with cost-to-income ratio down 900 basis points to 86 per cent from 95 per cent at year-end 2013 and a downward trending NPL ratio of 2.5 per cent.
“Return on equity (ROE) has also improved from 3.9 per cent in 2013 to 9 per cent this quarter. These achievements, when combined with our growing deposit base illustrate that our turnaround initiatives are indeed yielding results.”
Wema Bank opened three new branches in the last quarter and embarked on the renovation of four branches in key commercial and retail hubs while keeping an eye on opportunities in the market to grow inorganically.
“We have obtained our PCI-DSS recertification and continue to improve our technology and electronic payment platforms.
“We intend to continue to leverage the efficiency gains from Project LEAP, and invest in key areas to achieve superior returns to our shareholders over the next quarter and through to next year.”
The bank organised an international trade and structured finance forum, bringing together customers involved in international trade, regulators and other key stakeholders.
“With adequate representation from key stakeholders and regulators, we were able to enhance the understanding of the new guidelines issued by the CBN (Central Bank of Nigeria) and the Customs Service regarding trade.”
Oloketuyi said the bank also addresses customer issues with regulators directly and have positions itself within the system to take advantage of opportunities that arise.