WEMA BANK: SET FOR PROFIT DIVE?

If income flow trend in 2014 holds true this financial year, then Wema Bank by nine months to September, was set for a major drop in profit this year.
By September 2014 Wema Bank had recorded  N2506.7m as profit before tax and represented 81% of total profit for that year.
Now, from the figures released recently, N1528.5 profit was in the bag by September, down 39% on the 2014 level.
This was in spite of 38.9% increase in net trading income to N1527.3m; 9,47% rise in net fees and commission to N3774m and 51.9% decrease in loan loss provision to N229m.
The pressure on the bank's bottom line was from very marginal growth in interest income ( 1.71% to N26580.6m) as interest expense ended 5.59% up at N13315.9m; income from other sources dropped by 21.7% to N683.8m and as personnel cost  dropped by only 0.29% to N7491.9m while other operating expense rose by 7.86% to N8354.4m.
THUS:
* With most of Wema Bank income in 2014 already in by September that year, the margin could even reduce by year end if the same holds true again.
* Unless, of course, interest income grows faster and operating cost growth slows down.

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