Business
Wema Bank Posts Impressive N30 Billion Q3 Profit as Nine-Month Pre-Tax Profit Hits N60.6 Billion
Wema Bank Posts Impressive N30 Billion Q3 Profit as Nine-Month Pre-Tax Profit Hits N60.6 Billion
Wema Bank has just unveiled its third-quarter results, showcasing a remarkable leap in pre-tax profits to N30.050 billion for Q3 2024, a significant increase from N10.059 billion in the same period last year. This stellar performance has propelled the bank’s nine-month pre-tax profits to an impressive N60.616 billion, marking a robust trajectory in its financial health.
Key Highlights: Q3 2024 vs. Q3 2023
Interest Income: N83.843 billion (+65.00% YoY)
Interest Expense: N41.214 billion (+47.48% YoY)
Net Interest Income: N42.429 billion (+86.39% YoY)
Net Impairment Loss on Financial Assets: N7.026 billion (+254.32% YoY)
Net Interest Income After Impairment Charges: N35.603 billion (+70.45% YoY)
Net Fees and Commission Income: N14.833 billion (+117.70% YoY)
Operating Income: N61.609 billion (+92.04% YoY)
Profit After Tax: N26.140 billion (+198.78% YoY)
Earnings Per Share: N4.88 (+79.41% YoY)
Loans and Advances to Customers: N1.003 trillion (+25.24%)
Total Assets: N3.093 trillion (+37.56%)
Customer Deposits: N2.292 trillion (+23.90%)
Commentary
A closer examination of these results reveals that interest income has played a pivotal role in this growth, contributing a substantial N83.348 billion—an impressive 76% of the bank’s gross earnings. This was largely driven by income from loans and advances, which accounted for 66% of total interest income.
Additionally, the bank’s non-interest income also witnessed significant growth, contributing N26.106 billion. Notably, net fees and commission income more than doubled to N14.833 billion, fueled by foreign exchange transactions and fees from electronic products. Furthermore, Wema Bank reported a remarkable N8 billion in foreign exchange revaluation gains, reflecting a staggering 140% year-on-year growth.
These results are likely to pique investor interest, as Wema Bank’s shares have already demonstrated strong performance this year, with a 43% year-to-date gain following a 47% return the previous year.
However, it is important to recognize the challenges that lie ahead. The heightened risk environment and new capital requirements could impact overall profitability. The bank has seen a significant increase in impairment charges, which surged by 230% to N6.745 billion in Q3, raising the total provision for the nine-month period to N11.933 billion, compared to just N2.946 billion in the same timeframe last year.
In summary, while Wema Bank’s outstanding financial performance showcases its resilience and growth potential, the rising impairment charges highlight underlying risks that could challenge future earnings if not managed effectively. Investors and stakeholders will be keenly observing how the bank navigates these complexities in the upcoming quarters.
