Wema Bank suffers N383.2bn drop in total assets H1

Wema Bank Plc has recorded a decline in its total assets for the six months ended June 30, 2017, from N391.8 billion in 2016, to N383.2 billion in 2017, a percentage of 2.2 per cent.
The bank’s results showed that the asset decline was on the back of a significant drop in the lender’s unrestricted balances with Central Bank of Nigeria that dropped 80.5 per cent to N4.2 billion as at June 2017 from N21.4 billion in June 2016.
This was in a bid to measure up with mandatory restricted balances stipulated by the apex bank.
It was further noted in the results that restricted deposit with CBN represents mandatory cash deposit held with the apex bank as a Regulatory Cash Reserve requirements.
“The CRR rate was harmonised to 22.5per cent for both private and public sector funds during the year 2016. Restricted deposits with Central Bank are not available for use in day to day operations,” the bank said.
Other highlights from the statement of financial position was a 67.2 per cent increase in the deposits from banks that stood at N40.2 billion against N24.0 billion in first half of 2016. Deposits from customers declined slightly to N251.7 billion from N253.8 billion while shareholders’ funds increased by 5 per cent to N49.7 billion from N47.2 billion in the corresponding period of the past year.
Commenting on the results, the Managing Director/Chief Executive Officer, Segun Oloketuyi, provided further insights into the performance of the bank during the period.
“In the first half of the year, the bank operated in an uncertain and challenging domestic economic environment. While we recorded notable improvements in the second quarter of the year, especially around foreign currency management, the execution of fiscal policies and the continued tight monetary policy impacted on consumers’ disposable income and invariably on banking sector performance. Despite the relatively tough climate, Wema Bank recorded success on a number of financial and non-financial priorities,” he said.
Oloketuyi noted that gross earnings recorded stable growth, increasing by 25.17 per cent from N24.26 billion (H1’2016) to N30.37 billion (H1’2017).
He said the growth in gross earnings resulted from a 25.84 per cent increase in interest income to N25.37 billion and a 21.92 per cent rise in non-interest income, which increasingly rises on the bank’s income from mobile and digital banking offerings.
The lender’s managing director further noted that the impact of the growth in gross earnings was, however, muted by the higher cost of funds within the sector.
“Despite this, we still maintained a decent interest margin while recording a 10 per cent growth in Profit before Tax,” he said.
The Bank also further optimised its loan book in the first half of the year by focusing on recoveries and supporting transaction with good and steady cash flows.