Wema Bank’s gross earnings for the half year 2022 grew by 50% y-o-y to N59.5 billion from N39.824 billion reflecting the increase in loans and advances (+7% y-o-y) supported by the higher interest rate environment.
This was on the back of high inflation environment and currency devaluation.
Inflation rate increased to 18.60% as at end of June 2022, highest in 11 months. Due to increased food costs, supply chain disruptions, the depreciation of the naira, insecurity, and deteriorating infrastructure.
Interest income grew by +55% y-o-y benefitting from strong loan growth and a higher yield environment. Interest income from loans and advances had an 80.4% contribution for the period.
Yield on assets improved 512 basis points from the H1 2021 position to 15.72%
The bank recorded strong growth in profit before tax from N4.300 billion in 2021 to N6.130 billion in 2022 which according to the bank resulted from efficiencies in the balance sheet, sustainable business growth, liquidity management, and growing diversification of funding base.
What the bank is saying
Speaking at analysts conference call the bank said: “Our digital channels remain a priority in meeting customer needs and closing the financial inclusion gap.
With a transaction value of N131.5 billion, USSD recorded over 58.6 million in transaction count (+55%), reaffirming our focus to grow channel usage.
Mobile banking users completed over 42.8 million transactions within the review period, further driving the financial inclusion initiative.
With over 50% growth in agent acquisition, our agency banking base increased to 140k accounts, at the end of the six months review period (H1 2021: >102k). This helps to further enhance performance across our financial inclusion initiatives. The value of agency funds transfer closed at N7.59bn in H1 2022, a 34% y-o-y growth. The stellar growth in agency transfer volume by 550k% was driven by signing-on of new partners.
Our agency banking solutions continues to provide support to customers mostly in the rural areas and hard-to-reach regions of the country. So far, we have over 21,000 agents attending to the financial service needs of these customers.
Other key highlights
- The Operating expense for the period had a 26% growth, reflective of high inflation environment and currency devaluation.
- AMCON levy rose 23% y-o-y to N3.2 billion, due to the growth in asset base and contingents while NDIC premium rose 10% to N2billion, impacted by growth in deposits.
- Growth in repairs and maintenance (+30%) and others (+37%) primarily reflects the impact of the inflationary environment.
- The 19% increase in personnel expenses was as a result of capacity expansions and company-wide salary review during the period.