CAPTAIN WEMA BANK AHOY.

Wema Bank plc, like an experienced captain caught in the eye of a storm out alone with his ship at sea, appears ton have been doing battle to stay afloat and land safely since this year.

According to figures for the half year to June 2017 released this week, all income streams are shrinking and captain Wema Bank is trying his very best to cut all costs to ensure that even at that, the bank ends with profit, not loss.

It is succeeding, says then figures, although settling for reduced profit before tax of N1433.5m down 55.8% on N3245.1m at the same time last year. Given the times, even that was a relief of sorts.

Wema Bank's estimated gross earnings had dropped by 44% to N30,460.1m as interest income declined by 42.9% to N25,453.3m; net fee and commission declined by 37.2% ton N3890.4m; net trading income went down by 75.2% to N527.1m and orher income tumbled by 60% to N589.3m.

Captain Wema Bank's response was naturally: Armed more or less with what looked like a butchers knife it has been slicing through virtually all cost heads and so personnel costs was slashed to N5130.4m from N12,132.6m and other operating costs dropped by 53.1% to N5686.2m.

One interesting thing about the cuts, it was across the board although with relative gaping holes cleaned out. Directors expenses, SMS costs and VAT were zero within the half year ; AMCON Levy, professional fees, premises and equipment expensed, donations Insurance fees and service charges were slashed by above 50% and all others by not less than 23.4% drop in directors fees.

There was far less provision too fot bad debts dropping by 78.6%b to N88.4m even though loans and advances decreased by only 9.38% to N205,718.9m.

However, the reality on the ground is that captain Wema bank still has a lot to do if it intends to record higher profit this year and not just avoid the loss league. This is because by June the bank's profit margin was 4.71% compared to 5.97% at the same time in 2016.


WEMA BANK PLC; Nm HALF YEAR

                                                                               2017                            2016
Gross earning                                                      30,460.1                      54,361.2
Interest income                                                    25,453.3                      44,560.5
Interest expense                                                   16,972.9                      25,910.3
Impairment                                                                 88.4                           412.4
Net fee and commission                                        3890.4                         6190.7
Net trading income                                                  527.1                         2123.1
Other income                                                           589.3                        1489.9
personnel cost                                                        5130.4                     10,352.3
Other operating costs                                             5686.2                     12,132.6
Profit before tax                                                     1433.5                       3245.7
Profit margin  %                                                      4.71                            5.97

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