Wema Bank Plc has delivered its strongest financial performance in at least five years, reporting a remarkable surge in both gross earnings and profitability.
The bank’s audited financial statements for the year that ended on December 31, 2024, reveal that gross earnings jumped to N433.43 billion, driven by robust interest income and strategic asset expansion.
Profit before tax soared by 141% to N102.5 billion, marking a record-breaking milestone as the bank capitalized on rising interest rates and strengthened its loan and investment portfolio.
As part of the report, the Board of Directors proposed a dividend payment of N1.00 per share for the 2024 financial year
Wema Bank made most of its money in 2024 by giving out loans and investing in government securities.
The bank earned N233.85 billion from loans, which was 91% more than last year, and loans made up about 66% of its total interest income.
The bank also earned N113.68 billion from government investments (like bonds and treasury bills), a 98% increase from the previous year, contributing about 32% of interest income.
Apart from taking advantage of high interest rates (due to CBN’s policies to fight inflation), the bank also gave out more loans and increased its investments in safer government securities.
The total loans Wema Bank gave out (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, which are much safer investments compared to loans.
While Wema Bank made strong gains from loans and investments, its loan portfolio still carries some risks.
Since some loans might not be fully repaid, the bank set aside N36 billion as a safety measure for possible losses (Expected Credit Loss or ECL).
A major part of the bad loan provision (N27.33 billion) is for loans that are already in serious trouble (Stage 3 loans).
After removing this amount, the actual loans left on the bank’s books (net loans) stood at N1.201 trillion.