NON-CORE INCOME ACE IN 2015 WEMA BANK

For Wema Bank PLC, all was well that ended well in 2015 but solely because non-core business refused to cave in.
According to the audited figures released not too long ago, there was a marked 12.2% decrease in interest income within the year from N35453.2m in 2014 to N31128m.
To make matters worse, interest expense increased by 14.8% to N19408.5m from N16901.3m in spite of the decrease in interest income.
The net effect of this was reduced a bit by 12% drop in the bank's impairment provision to N77.6m from N88.2m.
However, the real game change occurred as income from net trading grew by 109.5% to N1781.8m from N850.6m,  as income from other sources rose by 83.2% to N1217.6m from N664.5m and as fee and commission increased by 8.54% to N5664.3m from N5218.5m.
Hence, in spite of the drop in core income, Wema Bank's operating income rose by 5.01% to N26461m compared to N25197.4m in 2014.
However, the advantage of this was lost later especially as other operating expenses (minus personnel) increased by 15% to N11374.9m from N9889.8m.
In the end, compared to about 5.68% drop in gross earnings, the year's profit before tax came to N3045.5m down by only 1.56% on 2014's N3093.9m.
Thus, Wema Bank ended 2015 with a marginally higher profit margin of 7.65% as against 7.33% in 2014.
SO:
* While striving to build on 2015 gains, it is obvious that greater control has to be exercised over overhead expenses.
* Will it not be possible to close the wide gap between percentage changes in interest income and expense?

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