WEMA BANK PLC CUTS BAD DEBTS PROVISION

At a trying time when many fear for stress in the Nigerian banking industry from the frightening growth in loan loss provision, Wema Bank PLC has announced 65.2% drop in its own impairment provision.

According to the nine months figures released late last week, the provision by September was N79.7m compared to N229m at the same time in 2015 year.

This was in spite of 20.8% increase in loans to customers to N177013.5m from only 2.4% rise in customers deposits to N227016.4m.

Despite this cheery confidence in the relative strength of its loan portfolio, the bank though ended the nine months with 2.26% profit drop to N1494m.

This was even as gross earnings grew by 16.4% to N37892.3m on the back of very good harvest from foreign exchange trading (income up 445.2% at N666.8m); 16.8% increase in fee and commission to N4407.5m and 20.1% topping of interest income to N31927.5m.

Wema Bank's main draw backs within the period were 43.7% leap in interest expense to N19136.6m despite significant 46.7% decrease in borrowed funds to N26012.5m ; 38.2% drop in net trading income to N943.3m and 10.2% decrease in Other income to N614m despite the inclusive harvest from foreign exchange trading.

As for cost control, Wema Bank PLC did fairly well within the period driving Other operating expenses down by 5.8% to N7869.7m and caging personnel cost growth at 1.43% to N7598.7m.

In the end, all things being equal. Wema Bank seems likely to end the year making less profit on each N100 income than it did in 2015 but rest assured, its burden of bad debts is too light to be a threat should the hovering crisis in the sector become real.

WEMA BANK: Nm Nine months.
                            2016.          2015
Gross earnings 37892.3.  32565.7
Interest income31927.5   26580.6
Interest cost.    19136.6.  13315.9
Fee and Comm. 4407.5.    3774.0
Net trading.         943.3.     1527.3
Other income      614.0.      683.8
Personnel cost 7598.7.    7491.9
Other op. Cost  7869.7.    8354.4
Profit b4 tax      1494.0.   1528.5
Profit margin.     3.94.        4.69
Loans & Adv.  177013.5  146550.1
Deposits.         227016.4. 221698.3
Borrowed funds 26012.5. 48840.6

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