Wema Bank Profit Jumps, Unveils Plan to Dominate Digital Banking

Wema Bank Profit Jumps, Unveils Plan to Dominate Digital Banking

Wema Bank Plc bolstered its earnings performance for the financial year 2021 with double digits growth in top and bottom lines as management unveils a plan to dominate Africa’s digital financial services industry.

The outstanding performance of the bank follows the management’s operational and share capital reconstruction plan. The bank profit inched higher 94.53% to N8.93 billion, according to audited results for 2021 following an improvement in capital position.

Shareholders’ funds rose by 18.97% year on year to N70.36 billion, from N59.14 billion in 2020. Amidst the tough operating environment, the bank strengthened its net interest margin and boosted loans and advances to customers while deposits expanded by more than 15% year on year.

Wema Bank’s gross earnings inched up 15.35% in the financial year 2021 to N92.14 billion from N79.88 billion in 2020. The topline performance was driven by increased lending activities and healthy income from non-interest revenue achieved last year.

A further breakdown shows the bank’s interest income rose 16.27% in 12-month to N73.30 billion from N63.04 billion. The surge has a positive effect on net interest income in the year, rising by 29.19% to N39.87 billion from N30.86 billion in the comparable period.

Wema Bank grew pretax profit by 108.3% year on year, from N5.94 billion in 2020 to N12.38 billion. Profit after tax consideration settled at N8.93 billion in 2021, representing a 94.53% jump from N4.59 billion reported in the comparable year.

Overall, the bank’s earnings per share inched up to 23.2 kobo, up by 95% from 11.9 kobo in 2020. Up 2.95%, return on average equity hits 17.26% in 2021 from 14.31% last year while net interest margin strengthened despite low-interest rate environment.

In 2021, Wema Bank’s cost-to-income ratio slow down to 78.12% from 83.79% in the comparable period while its capital position grew to 15.46% from 12.35%.

Speaking to the result, Managing Director. Mr. Ademola Adebise said, “I am delighted to announce our performance for the year ended 31st December 2021. The Bank’s 2021 results show robust growth in all key financial metrics despite the challenging macro-economic environment.”

Also, the Chief Finance Officer of the Bank, Mr. Tunde Mabawonku noted that “a key measure of success for us is a consistent growth in our balance sheet and customer base – and we are glad that we are reporting healthy growth in all these areas.”

Deposit liabilities grew by 15.23% to ₦927.47 billion in 2021 from ₦804.87 billion in 2020 while total assets increased by 20.23% to ₦1.164.52 billion in 2021 from ₦968.58billion in FY 2020.

Mr. Mabawonku also added that ” Looking forward, we expect that the strong growth will be sustained despite the tough business climate as we execute our customer experience improvement initiatives built around a digital-first banking strategy and become first in class in that sphere.

“The bank will also continue to focus on our digital business, which is a key boost for customer acquisition, consumer lending, and transaction volumes while not neglecting our corporate and commercial play.

“In our commercial business, we will continue our aggressive strategy to improve our lending business alongside trade and other revenue lines. We have also unveiled our new Mission and Vision statements which underpin our corporate strategy. We want to be the dominant digital platform in Africa delivering seamless financial services.”

In 2021, Wema Bank’s balance sheet improved as total assets hit N1.164 trillion, according to audited results, rising by more than 20% year on year from N968.58 billion in the comparable year.

The management said the proposed dividend of 8kobo per share is based on the total number of shares that existed as of 31st December 2021. Subsequently, the Bank said it obtained all regulatory approvals relating to the share capital reconstruction.

The implication of this is that the proposed dividend of 8kobo per share would now translate to 24kobo per share as the number of shares would have reduced from 38,574,466,082 units as of 31 December 2021 to 12,858,155,360 units while the amount of dividend declared remains the same.

Read: How Wema Bank Plc rises above challenges against struggle to rise