Wema Bank Plc has reported a profit before tax of N102.105 billion for the year ended December 31, 2024, marking a 134% year-over-year (YoY) growth from the previous year.
The unaudited Group financial statements, reviewed reveal that the bank’s gross earnings surged by 89.61% YoY to N430.259 billion.
A deeper analysis of Wema Bank’s 2024 financial performance highlights interest income as the primary driver of growth.
Interest income accounted for 82% of gross earnings, reinforcing the bank’s reliance on traditional lending and investment activities.
The growth in interest income was fueled by higher loans and advances to customers and banks, which contributed 66% of total interest income; a marginal 0.25% decline from 2023.
Loans and advances to customers surged by 50% to N1.203 trillion, signaling strong credit expansion.
However, this came at a cost, as impairment provisions on loans and advances rose significantly by 120.33% to N16.594 billion, indicating higher expected credit losses.
Meanwhile, interest income from investments in securities jumped by 97% to N113.224 billion, increasing its share of total interest income by 3.90% to 32.18%.
On the liability side, Wema Bank recorded robust deposit growth, reflecting increased customer confidence and deposit mobilization efforts:
Customer deposits grew by 35%, adding N669 billion to reach N2.530 trillion.
As a result of higher funding costs, interest expenses surged by 93.39% YoY to N181.640 billion, with customer deposits accounting for N103.415 billion (57% of total interest expenses); a 28% increase from 2023.
Despite the rising cost of funds, net interest income remained strong at N170.192 billion, up 85.5% YoY, showcasing a healthy interest spread.
Beyond interest income, non-interest income played a crucial role in boosting profitability, contributing N78.427 billion in revenue.
Net fees and commission income more than doubled (+122.82% YoY) to N55.621 billion, largely driven by foreign exchange (FX) transactions and electronic banking fees.
FX revaluation gains also had a positive impact, growing 6.79% YoY to N14.527 billion.
These non-interest income streams, coupled with robust interest income growth, pushed profit before tax to N102.105 billion (+134% YoY), while profit after tax surged by 146.84% to N88.834 billion.
Looking ahead, Wema Bank is set to further strengthen its financial position through a planned capital raise.
The bank recently announced its intention to secure N200 billion through a Rights Issue and a Special Placement, scheduled to launch on April 1, 2025.
This marks the second tranche of its capital-raising efforts, following the N40 billion secured in the first tranche.
The successful completion of this capital raise will strengthen its balance sheet, improve liquidity, and long-term growth potential; factors for boosting investor confidence.
Already, Wema Bank’s share capital and share premium stood at N67.146 billion as of December 31, 2024, reflecting a 344% year-on-year increase.
Following the release of its 2024 results on January 30, 2025, Wema Bank’s share price gained 1.8%, closing at N11.2, up from N11.0.
The stock has posted a 23.1% year-to-date (YTD) gain, ranking 23rd on the NGX in terms of performance.
In 2024, Wema Bank emerged as the best-performing banking stock, delivering a 62.50% YTD gain