Wema Bank Earnings Rise 76% as Loan Growth Strengthens Interest Income
Wema Bank Plc reported a profit after tax of N63.13 billion for the quarter ended March 31, 2026, representing a 76.1 percent increase from N35.85 billion recorded in the corresponding period of 2025, supported by loan growth.
The performance was underpinned by a sharp rise in interest income, which grew to N179.96 billion from N110.08 billion, reflecting higher yields on earning assets and a significant expansion in loans and advances as well as money market placements.
Interest income from loans and advances stood at N96.48 billion, while income from cash and placements rose to N40.28 billion, indicating improved liquidity deployment and pricing in a high-interest-rate environment.
Interest expense increased to N80.53 billion from N53.44 billion, driven primarily by higher funding costs on customer deposits, which accounted for N74.64 billion of the total.
Despite the rise in funding costs, net interest income expanded by 75.6 percent to N99.43 billion, compared with N56.64 billion in the prior period, reflecting a stronger asset yield relative to liability repricing.
After accounting for impairment charges, net interest income settled at N97.99 billion, as impairment losses declined to N1.44 billion from N1.82 billion. The moderation in impairment was supported by recoveries on loans and a reduction in Stage 3 exposures, with credit-impaired loans declining to N81.36 billion from N88.06 billion at year-end 2025, indicating some improvement in asset quality.
Non-interest income showed mixed performance. Net fee and commission income declined to N17.39 billion from N25.05 billion, largely due to a drop in electronic banking fees, which fell to N6.10 billion from N12.37 billion, and lower foreign exchange transaction fees.
However, this weakness was partly offset by a significant increase in net trading income, which rose to N5.83 billion from N1.50 billion, driven by gains on treasury bills and fixed income securities amid active trading positions.
Other income moderated slightly to N472.07 million from N561.61 million, reflecting lower digital income and the absence of prior period revaluation gains. Overall, total non-interest income declined to N24.86 billion from N29.30 billion, but the impact was outweighed by strong growth in net interest income.
Consequently, operating income rose by 46.0 percent to N122.85 billion from N84.12 billion, driven primarily by interest-related revenues.
Operating expenses increased across key cost lines. Personnel expenses rose to N18.03 billion from N12.98 billion, reflecting higher wages and outsourced staff costs.
Depreciation and amortisation grew to N4.36 billion from N2.55 billion, driven by continued investment in property, equipment, and digital infrastructure. Other operating expenses remained broadly flat at N27.90 billion compared with N27.38 billion, with increases in AMCON levy, regulatory charges, and maintenance costs offset by a decline in technology-related expenses.
The cost expansion was slower relative to revenue growth, resulting in profit before tax rising by 76.1 percent to N72.57 billion from N41.21 billion. Income tax expense increased to N9.43 billion from N5.36 billion, in line with higher taxable profits, leading to the reported profit after tax of N63.13 billion.
On the balance sheet, total assets grew to N5.23 trillion from N5.07 trillion at the end of 2025. The expansion was driven by a N124.86 billion increase in loans and advances to customers to N1.86 trillion, reflecting sustained credit growth, particularly in term loans which rose to N1.71 trillion. Cash and cash equivalents also increased significantly to N1.08 trillion from N940.81 billion, supported by higher money market placements.
Customer deposits rose to N3.41 trillion from N3.29 trillion, indicating continued deposit mobilisation across retail and corporate segments. Notably, growth was concentrated in current and other deposits, suggesting a relatively stable and low-cost funding base despite rising interest rates.
Investment securities declined to N1.13 trillion from N1.34 trillion, reflecting a reallocation of assets, particularly a reduction in treasury bills held at fair value through profit or loss, which fell sharply to N36.51 billion from N196.60 billion. This shift suggests a strategic move toward lending and other higher-yielding assets.
Liquidity remained strong, with net cash generated from operating activities at N116.29 billion, supported by interest receipts of N179.96 billion and growth in customer deposits. However, cash outflows from loan creation, which stood at N126.30 billion, indicate continued balance sheet expansion through credit extension.
Equity increased to N683.95 billion from N620.47 billion, driven by retained earnings growth following the quarter’s profit. This strengthened the bank’s capital base and supports its capacity for further asset expansion.
Wema began the year with a share price of N20.40 and has since gained 76.5 percent on that price valuation, ranking it 35th on the NGX in terms of year-to-date performance.
