HALF YEAR RESULTS: WEMA BANK's 2016 ACHE

Wema Bank PLC seems to be battling one major challenge this financial year: Out of control growth in interest expense.

According to the figures for the first half released recently, interest expense growth at 38% to N11,634.8m more than doubled the increase in interest revenue which closed June 15.2% up at N20157.3m.

The only other recorded growth that surpassed that of interest expense was fee and commission rise by 42.3% to N3091.9m but, you got it, the actual figure added was so small that it could not fill the hole from interest paid growth.

Yet it was helped in this regard by 64.1% drop in impairment provision to N61.5m; 5.22% increase in net trading income to N695.6m and marginal growths in personnel expense (3.9% to N5179.7m) and other operating expenses by 2.04% to N5080.1m.

The issue was that interest expense drag downwards was assisted by 41.2% decrease in Other income to N319.2m.

Hence, Wema bank, in spite of clocking 16.3% increase in gross earnings to N24264m settled for 10.6% rise in profit before tax to N1297.8m

Naturally, this only led to profit margin easing to 5.35% from 5.62% previously although Wema bank gave cost control a fairly good shot.

WEMA BANK PLC: Nbn
                Half year
                  2016.       2015
Gross inc. 24.3.        20.9
Int. Income 20.2.      17.5
Int. Expense 11.6.     8.43
Impairment  0.006   0.17
Commission 3.09.    2.17
Net trading    0.695. 0.661
Other income 0.318 0.542
Personnel      5.18   4.985
Other exp.      5.08   4.978
Profit b4 tax   1.299 1.173
Margin %      5.35.    5.62

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