Wema Bank reports N4bn retained earnings in 2017

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Following its capital reorganisation scheme, Wema Bank Plc has migrated from negative retained earnings of about N39.2 billion in 2016 to positive retained earnings of N4 billion in 2017.

The positive retained earnings, brings the national bank shareholders funds to N49.6 billion in 2017 from N48.47 billion in 2016.

The Managing Director/CEO of the Bank Segun Oloketuyi in a statement said, “In October, the Bank held its Extra-Ordinary General Meeting (EGM) towards its proposed Capital Reorganisation Scheme.  I am delighted to announce that the exercise has been concluded, with all relevant regulatory approvals in place and duly passed and reflected in the 2017 financial year accounts. As earlier highlighted, the conclusion of the exercise would lead to an efficient balance sheet, as ploughed back profit can be capitalised to grow the business while positioning the Bank for dividend payment in the near term.

“I would like to appreciate our esteemed shareholders for their patience and the trust reposed in us. We are now in the final stage of our three-pronged strategy; stabilise the bank (2009 – 2012), reposition the bank (2013-2017) and grow the Bank (2017 and beyond).”

“We approached the money market in November 2017 to raise N25 billion in two Series under a commercial paper Program; Series 1 N10 billion – 182-day tenor and Series 2: N15 billion- 270-day tenor. Given the relative decline in interest rates and possible growth within the economy, the Bank will be re-opening the 2nd series of its N50 billion debt issuance program. This should commence from the second quarter of the year.”

The bank in its 2017 financial year reported a gross earnings that gained 20.07 per cent, from N54.36 billion in 2016 to N65.27 billion in 2017.

The Chief Finance Officer, Tunde Mabawonku noted that the Bank’s 2017 result was reflective of its continued resilience despite realities arising from increased impairment charges during the period.

The Bank’s earnings from non-interest income remained strong, growing by 24.44per cent from N9.80 billion in 2016 to N12.19 billion in 2017; surpassing its 2017 guidance of a 19per cent growth rate.

The Bank closed with a Profit before Tax (PBT) of N3.01 billion (2016; N3.24 billion), despite reporting an  increase in impairment charges which rose  from N0.42 billion in 2016 to N2.18 billion in 2017.

“Risk management remains at the core of our operations, as we leverage on our prudent risk management practices and reported a Non-Performing Loan (NPL) ratio of 3.52per cent (2016; 5.01per cent) while our Capital Adequacy Ratio (CAR), closed at 14.32per cent (2016; 11.07per cent).

“We remain confident, that the Bank’s credit rating will continue to remain affirmed at investment grade level,” Mabawonku noted.

He expressed the Bank’s commitment to sound risk management while leveraging its digital platforms, built capabilities in lowering the cost of service and attaining competitive advantages.

“In addition, with our positive retained earnings account, the balance sheet has now been repositioned for efficiency,” Mabawonku concluded.

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