Wema Bank interest income grew by 43% on rising loans in 2022

Wema Bank’s interest income grew 43 per cent to N108.04 billion in 2022 driven by the most contribution from loans and advances to banks and customers.

The tier-2 bank’s total interest income comprises loans and advances to banks and customers which contributed 79.3 per cent, investments securities(19.5 per cent) and cash and cash equivalents (1.3 per cent).

The loans and advances to banks and customers recorded 33 per cent growth to N85.1 billion in 2022 from N63.8 billion in 2021.

Investment securities grew 158 per cent to N20.9 billion in 2022 from N8.1 billion in 2021 while cash and cash equivalents dipped 52 per cent to N1.4 billion from N2.9 billion.

The bank’s total interest expense jumped 52 per cent to N53.8 billion on the back of N45.6 billion deposits from customers, other borrowed funds (N4.7 billion) and deposits from banks(N2.8 billion).

The bank recorded gross earnings rose to N131.08 billion in 2022, indicating an increase of 42.3 per cent from N92.14 per cent in 2021.

Net trading income jumped 150 per cent to N4 billion on the back of treasury bills (N3.5 billion), fixed income securities(N293.4 million) and foreign exchange trading (N242.1 million).

However, other income dropped 12 per cent to N2.9 billion in 2022 from N3.3 billion in 2021.

Wema Bank recorded a boom in its electronic banking channels in 2022 as it generated N6.1 billion from digital platforms. The 2022 e-banking revenue represents a 79 per cent increase when compared with the N3.4 billion the bank generated from electronic channels in 2021.

Behind this growth is the bank’s digital banking platform, ALAT, which gained traction and attracted more customers in the year under review.

According to the bank, ALAT recorded a 131 per cent increase in the number of customers onboarded in 2022.

In addition, Wema Bank said its other card products also recorded a 98 per cent increase in the number of new customers within the year.

“ALAT continues to be a key growth driver and success story for the Bank, recording a year-on-year increase of over 853,092 in the number of actively transacting customers on the platform. With the rollout of new and innovative features on ALAT, and our ALAT For Business platform, we are sure of increased growth and heightened performance on both platforms in the coming year,” Wema Bank’s Chairman Board of Directors, Babatunde Kasali said.

“Wema Bank has always worked to put its customers first and meet their needs every step of the way, whether through their local bank branch or through ALAT, the digital banking platform. We will continue to work towards our goal of becoming Nigeria’s dominant digital banking platform, an objective that requires an unwavering focus on our digital business, a key lever for customer acquisition, retention, and engagement,” he added.

Wema Bank recorded a Profit After-Tax growth of 26 per cent to N11.2 billion in 2022 from N8.9 billion in 2021. The bank’s Profit Before Tax amounted to N14.8 billion, up 19 per cent from N12.4 billion in the comparable periods.

Commenting on the bank’s result, the Managing Director/Chief Executive Officer of Wema Bank, Moruf Oseni, said, “Our 2022 results show the result of the careful execution if our medium-term strategy as we have deliberately focused on deepening on offerings to the corporate, commercial and retail segments of the market using our digital channels while ensuring best-in-class customer experience platforms to deliver improvements across all customer touch points. We expect the bottom line to improve even further in 2023.”

Wema Bank’s net fee and commission income rose to N16.6 billion, up 24 per cent from N13.4 billion while net trading income stood at N4 billion, 150 per cent increase from N1.6 billion in the reviewed period.

Wema Bank spent the sum of N3.3 billion on advertising and marketing, 154 per cent growth from N1.3 billion in 2021. The bank’s transport and communications 38 per cent growth to N778.7 million from N562.8 million in the reviewed period.

Personnel expenses rose 28 per cent to N21.3 billion on the back of wages and salaries at N14.7 billion, outsourced staff cost(N4.8 billion) and pension contribution (N1.8 billion).

The bank’s total assets hit N1.44 trillion in 2022 which indicates 23 per cent growth from N1.2 trillion. Shareholders’ funds also climbed to N82.62 billion, 17 per cent increase from N70.36 billion in 2021.

Profit for the year attributable to Wema Bank’s equity holders rose to N11.4 billion from N8.9 billion. Earnings per share stood at N88.3 per share from N69.4 per share in the reviewed period.