Wema Bank Plc has returned to full profitability as the bank reported a profit before tax of N1.9 billion for the year ended December 31, 2013 as against a loss of N5.9 billion posted in 2012. The return to full profitability is coming on the heels of the successful completion of the bank’s N40 billion Tier 1 capital raising exercise in third quarter(Q3) of 2013.
A breakdown of the results showed that Wema Bank ended the year with a total operating income of N20.9 billion in 2013, up 68 per cent from 12.5 billion in 2012.
Non-interest revenue rose 25 per cent from N5.6 billion to N7.1 billion, while credit impairment charge improved from N4.9 billion N1.3 billion.
Consequently profit before tax stood at N1.9 billion, while profit after tax was N1.6 billion, compared with a loss of N5 billion in 2012.
A further analysis of the results indicated that the bank ended the year with a total assets of N331 billion, up from N246 billion, customer deposits improved from N174.3 billion to N217.7 billion, while net loans and advances to customers rose 34 per cent from N73.7 billion to N98.6 billion.
Earnings per share rose from negative 42 kobo to positive eight kobo, while non-performing loan ratio improved from 14.2 per cent to 3.9 per cent. Liquidity ratio stood at 77 per cent as against 77 per cent in 2012, while capital adequacy ratio improved from negative 16 per cent in 2012 to 27 per cent in 2013.
Commenting on the results, the Managing Director/Chief Executive Officer of Wema Bank, Mr. Segun Oloketuyi, said the bank achieved a significant milestone as it returned to full profitability.
The improved performance, he asaid, followed concerted efforts in implementing the first phase of the bank’s turnaround project, despite the increasingly competitive and highly regulated operating environment.
“Our transformation plan, Project Leap; a short term growth project with a target of rapidly increasing our market share in our niche segment of retail and SME has started to yield positive results and the bank is on the path of sustainable growth,” he said.
According to him, the bank recorded improvements in profitability and an increase in customer deposits on the back our retail and commercial businesses.
“The capital raising exercise we concluded in 2013 has also increased our capacity to do business and ability to withstand economic shocks. The bank remains committed to improving operational efficiency and focused on containing operating expense growth.
We have used the last three years to implement a robust and effective risk management framework, deploy a cutting edge information technology platform and most importantly, reskill and retool our workforce to effectively compete in the ever-changing business landscape,”Oloketuyi said.