GCR Upgrades Wema Bank Plc’s Issuer Rating to A/A1
GCR Ratings (GCR) has upgraded Wema Bank Plc’s national scale long and short-term issuer ratings to A(NG) and A1(NG) from BBB+(NG) and A2(NG) , respectively, with a stable outlook
The upgrade is underpinned by Wema Bank Plc’s improved competitive position and a stronger capital buffer following its recent recapitalisation, GCR said. The ratings also reflect the bank’s strong earnings-generation capacity, stable funding and liquidity structure, and a modest risk profile.
Wema Bank’s competitive position is slightly positive relative to the ratings, according to the released rating note. GCR said the bank has maintained strong growth in assets and earnings relative to rated peers, supported by its digital strategy and platforms.
Wema Bank’s total assets grew by 41% to N5.0 trillion or USD3.5 billion as of December 2025, representing a market share of approximately 2% of industry total assets; while operating revenue grew by 74% to N446.2 billion or USD310.7 million over the same period.
As a result, the bank’s Return on Equity (ROE) and Return on Adjusted Assets (ROAA) registered at 31.3% and 3.4% respectively as of 31 December 2025, comparing favourably with peers.
GCR said going forward, physical expansion, retail penetration strategy and targeted partnerships are expected to continue to drive scale and efficiency over the next 12-18 months.
The bank’s capitalisation is also positive to the ratings, considering additional equity of N193.5 billion or USD134.7 million received in 2025 which placed share capital at N260.6 billion or USD181.4 million as of 31 December 2025.
Consequently, GCR core capital ratio increased to 27.8% in December 2025 from 18.30% in 2024. Over the outlook period (12 -18 months), GCR core capital ratio is expected to remain within the 23% – 25% range barring unanticipated growth in risk-weighted assets.
“We note that the IFRS 9 loan loss reserve coverage of Stage 3 loans was 66.3% as of 31 December 2025 (2024: 55.1%), which remains below peer average”.
GCR stated that Wema Bank’s risk position remains stable, with below-average non-performing loans (NPLs) and credit loss ratios of 4.9% and 1.7%, respectively, as of 31 December 2025 from 5.3% and 2.4% in 2024 and 2023; as well as a relatively low counterparty concentration risk given the fairly diversified nature of the loan book.
Although foreign currency (FCY) loans rose to 20.9% of gross loans as of 31 December 2025, up from 17.1% in 2024, FX risk is partly mitigated by lending to obligors with FCY cash flows.
Rating analysts said they expect the bank’s asset quality metrics to remain at similar levels over the outlook period, adding that Wema Bank’s funding and liquidity position is supported by a stable funding base and strong liquidity coverage.
Customer deposits dominate the funding base at over 90% over the past three years (2023-2025). As of December 2025, customer deposits grew by 30.3% to N3.2 billion (USD2.2 million) underpinned by a growing retail franchise with a focus on low-cost deposits.
Consequently, the proportion of current and savings accounts (CASA) deposits accounted for 82.3% of total deposits as of 31 December 2025, up from 78.9%.
GCR liquid assets coverage of customer deposits and wholesale funding remains robust at 68.6% and 19.9x, respectively, as of 31 December 2025. Over the outlook period, GCR said it expects the bank’s funding and liquidity profile to remain strong.
The stable outlook reflects the expectation that the bank’s earnings, asset quality and liquidity metrics will remain at current levels over the outlook period. Furthermore, analysts expect the GCR core capital ratio to range between 23% – 25% over the next 12-18 months. Wema Bank Tumbles by 10% as Investors Trim Holdings
