Wema Bank Reports Strongest Financial Performance in Five Years, Surpassing N102.5bn Pre-Tax Profit
Wema Bank Plc has recorded its strongest financial performance in at least five years, with a significant jump in both gross earnings and profitability for the 2024 financial year.
According to its audited financial statements for the year ended December 31, 2024, the bank’s gross earnings surged to N433.43 billion, fuelled by robust interest income and strategic asset expansion.
Profit before tax skyrocketed by 141% to N102.5 billion, marking a historic milestone as Wema Bank leveraged rising interest rates, increased lending, and a diversified investment portfolio.
As part of the 2024 financial report, Wema Bank’s Board of Directors has proposed a dividend of N1.00 per share, reinforcing its commitment to rewarding investors.
Loans and Investments Drive Interest Income Growth
Wema Bank’s core revenue growth in 2024 was primarily driven by its loan portfolio and investments in government securities.
Loans and Advances:
- The bank earned N233.85 billion from loans, reflecting a 91% year-on-year increase.
- Loans accounted for 66% of total interest income, showing Wema’s focus on credit expansion.
Government Investments:
- Income from Federal Government Bonds and Treasury Bills surged 98% to N113.68 billion, contributing 32% of total interest income.
- Wema Bank strategically increased its exposure to low-risk government securities, benefiting from high interest rates.
The bank’s total loan book (gross loans) stood at N1.237 trillion, with N1.125 trillion coming from long-term loans. On the investment side, Wema Bank held N712 billion in Federal Government Bonds and N111.11 billion in Treasury Bills
While these investments boosted earnings, the bank also set aside N36 billion as a safety buffer for possible credit losses, with N27.33 billion allocated to high-risk loans.
After provisions, net loans stood at N1.201 trillion.
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Rising Costs and Interest Expenses Impact Profit Margins
Despite the impressive revenue growth, Wema Bank, like many other Nigerian banks, faced higher funding costs due to the prevailing high-interest rate environment.
- Interest expenses on deposits surged by 732.9%, increasing the cost of funds.
- Borrowing costs rose by 139.9%, affecting net interest margins.
- Total interest paid on customer deposits reached N103.4 billion, reflecting tighter monetary policies.
However, strong net interest income helped cushion the impact of rising costs, allowing the bank to maintain profitability.
Non-Interest Income Sees Strong Growth
Beyond interest income, Wema Bank also recorded significant growth in non-interest revenue, driven by its digital banking innovations and diversified financial services.
Net fees and commission income increased to N55.576 billion, with contributions from:
- FX transactions: N15.039 billion
- Electronic products (e-banking fees): N14.073 billion
- Management fees: N8.023 billion
- Account maintenance fees: N7.364 billion
Digital Banking Innovation Fuels Growth
Wema Bank’s digital platforms played a key role in boosting non-interest income, particularly through:
- ALAT Xplore is Nigeria’s first mobile banking app for teenagers, driving new account openings and digital transactions.
- Coop Hub: A digital financial management platform for cooperative societies, enhancing fund transfers and e-payment services.
Wema Bank’s Balance Sheet Strengthens
The bank’s total assets grew to N3.593 trillion, with customer deposits making up a significant portion.
Shareholders’ funds increased to N256.421 billion, driven by:
- Retained earnings: N103.251 billion
- Share capital: N10.715 billion
- Share premium: N56.431 billion
To meet regulatory capital requirements, Wema Bank launched a N40 billion rights issue, strengthening its capital base.
Additionally, the bank’s Chairman confirmed plans to raise N200 billion in fresh capital, stating:
“To meet the new CBN capital requirements, the bank will be raising N200 billion in new capital as approved by shareholders at the last Annual General Meeting. This will be broken down into N150 billion in Rights Issue and N50 billion in Special Placement.”
Stock Market Performance
Wema Bank’s share price closed at N10.7, reflecting an 18.8% increase in 2025.
With a record-breaking year behind it, the bank remains focused on sustaining growth, expanding its digital footprint, and strengthening its capital position to navigate evolving market conditions.
