FINANCIAL YEAR 2014 RESULT Facts and Figures
Cautionary Note Regarding Forw ard Looking Statem ents • This presentation contains or incorporates by reference “forward-looking statements” regarding the belief or current expectations of Wema Bank Plc, the Directors and other members of its senior management about the Bank’s businesses and the transactions described in this presentation. Generally, words such as ‘‘could’’, ‘‘will’’, ‘‘expect’’, ‘‘intend’’, ‘‘anticipate’’, ‘‘believe’’, ‘‘plan’’, ‘‘seek’’ or similar expressions identify forward-looking statements. • These forward-looking statements are not guarantees of future performance. Rather, they are based on current views and assumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside the control of the Bank and are difficult to predict, that may cause actual results to differ materially from any future results or developments expressed or implied from the forward-looking statements. Such risks and uncertainties include, but are not limited to, regulatory developments, competitive conditions, technological developments and general economic conditions. The Bank assumes no responsibility to update any of the forward looking statements contained in this presentation. • Any forward-looking statement contained in this presentation, based on past or current trends and/ or activities of Wema Bank should not be taken as a representation that such trends or activities will continue in the future. No statement in this presentation is intended to be a profit forecast or to imply that the earnings of the Bank for the current year or future years will necessarily match or exceed the historical or published earnings of the Bank. Each forward-looking statement speaks only as of the date of the particular statement. Wema Bank expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Wema Bank’s expectations with regard thereto or any change in events, conditions or circumstances on which any such statement is based. 2
section page 4 1 Overview of the Bank 2 1 0 Financial Highlights Outlook 3 2 4 3
The Bank at a Glance Wema Bank Plc Listed on the Nigerian I ncorporated in Nigeria in 1 9 4 5 Stock Exchange in February 1991 Authorized capital of N20billion divided into 40 billion ordinary shares Diverse Shareholder Fully paid up share capital is N19,287,233,041 divided into 38,574,466,082 ordinary Base shares of 50 kobo each Retail and SME Banking, Commercial Banking, and targeted areas Agusto & Co – BB+ Akintola Williams of Corporate Banking. Fitch - Private Deloitte Monitored Rating Presence in South-South, South-West, FCT Regions 1 ,1 2 7 employees 1 2 9 1 6 0 1 ,5 5 6 1 .3 m illion as at accounts branches ATMs PoS Terminals 31 December 2014 4
The Bank has been Transform ed The turnaround plan w hich com m enced in 2 0 0 9 has been im plem ented …People banking on People … Together to greater heights 2 0 0 9 2 0 1 0 - 2 0 1 2 2 0 1 4 Negative Capital position Threshold Capital Sufficient Capital (N45billion) N44billion in Shareholders’ funds Distressed bank Recapitalized Fully capitalized (CAR of 18% ) Containment strategy Reorientation Defined Retail Strategy < 1% Market Share* 1% of Market Share* 1.5% of Market Share* Obsolete processes Business Process Reengineering Modern processes Redundant Core Banking Procurement & Installation of New Cutting-edge CBA (Finacle 10.2) Application (CBA) CBA Improved Alternative Banking Solutions 89% NPLs 15% NPL - 2012 2.49% NPLs Poor performance Average performance Improved Profitability * Market share is based on W em a Bank’s share of I ndustry Deposits 5
A New W EMA has Evolved 2 0 1 5 I m proved Corporate Governance Sufficient Capital Target Market – (N44billion in Shareholders’ funds) Modern Processes Retail & SME Fully capitalized (CAR of 22% ) I m proved Capital Position ( 1 8 % Cutting-edge CBA 1 .5 % of Market Share Executed Retail Strategy CAR) 1.5% of Market Share* N4 4 billion in I ncreased deploym ent of Alternate Shareholders’ Funds Channels Modern processes Consistent I m proved Cutting-edge CBA 2 .4 9 % NPL Perform ance Improved service on alternative channels < 3% NPLs – 2014 Consistent Improved Performance
Updates on 2 0 1 4 Com m itm ents MOTI VE TASK Growing Business Consistent Deposit growth during the year ( Custom er Deposit grow th of 1 7 % ) Increasing lending to productive sectors ( Year-on-year Loan grow th > 3 0 % ) Growing top line earnings by gradual portfolio shift from money market investments ( I nterest incom e grow th of 3 0 % ) Improving efficiency Improved operational efficiency through better use of technology ( Reduction in Cost to incom e to 8 7 % ) ROE, ROA improved during the period as a result of operational efficiency and improvement in yields Improve capacity for business Obtained additional trade lines to boost business growth ( Total of US$ 1 1 0 m in trade lines) Refresh and expand the branch Branch renovation on-going in a number of locations; network Additional branches being developed in key com m ercial hubs – Lagos, PH, Abuja Deploy alternative channels Continued deployment of alternative channels – POS, ATMs and mobile applications Better Risk Management Strengthened risk management framework Continued diversification of Risk Asset portfolio 7
Section Page Overview of the Bank 4 1 2 1 0 Financial Highlights Outlook 3 2 4 8
Financial Highlights 2 0 1 4 FY 2 0 1 3 FY ₦3.1bn ₦1.9bn PBT ₦2.1bn ₦1.5bn PAT Financial Highlights Capital Adequacy Ratio 18% 27% EPS ( Adjusted) 6k 8k ₦258.96bn ₦217.73bn Deposits ₦149.29bn ₦98.63bn Loan book ( Net) Revenue ₦35.5bn ₦28.5bn Generation I nterest I ncom e ₦6.7bn ₦7.1bn Non I nterest I ncom e Cost to incom e ratio 87.7% 95.2% Operational Cost of funds 5.21% 5.87% Efficiency ₦22.1bn ₦20.1bn Operating expenses Net I nterest Margin 8.27% 7.01% Return on Equity 7.27% 9.13% Margins & Quality NPLs 2.49% 3.87% 9
Statem ents of P&L and other Com prehensive I ncom e and the Financial Position 2 0 1 4 2 0 1 3 I n m illions of Nigerian Naira I n m illions of Nigerian Naira 2 0 1 4 2 0 1 3 Assets I nterest income 35,453 28,542 Cash and cash equivalents 52,130 31,314 I nterest expense (16,901) (16,018) Restricted deposits with CBN 70,056 25,673 Net interest incom e 1 8 ,5 5 2 1 2 ,5 2 4 Pledged assets 25,776 21,830 Write back on financial assets (88) 1,330 Available for Sale 1,614 7,180 Net interest income after impairment charge 18,464 13,854 Held for Trading 2,341 - Held to Maturity 37,258 102,380 Fee and commission income 5,219 5,133 Loans and advances to customers 149,294 98,632 Net trading income 851 349 Assets held for sale 2,965 - Operating income 25,197 20,957 Property and equipment 14,043 12,468 I ntangible assets 1,002 913 Personnel expenses (10,033) (8,932) Other assets 2,713 3,408 Profit before tax 3,094 1,947 Deferred tax assets 22,970 23,370 I ncome tax expense (721) (351) Total Assets 3 8 2 ,5 6 3 3 3 0 ,8 7 2 Profit for the year 2 ,3 7 2 1 ,5 9 7 Liabilities Deposits from banks 3,243 3,397 Fair value gain on available-for-sale investments 1 119 Deposits from customers 258,956 217,735 Other comprehensive income for the year, 1 104 Current tax liabilities 339 382 Total com prehensive incom e, net of incom e Other liabilities 17,107 10,127 tax 2 ,3 7 4 1 ,7 0 0 Other borrowed funds 58,382 57,588 Total Liabilities 3 3 8 ,7 9 4 2 8 9 ,4 7 7 Profit attributable to: Equity holders of the Bank 2,372 1,597 Equity Total comprehensive income for the year 2,373 1,700 Share capital 19,287 19,287 Earnings per share-basic ( kobo) 6 8 Share premium 48,870 48,870 Regulatory risk reserve 791 - Retained earnings (34,799 ) (35,663) Other reserves 9,619 8,901 Attributable to Equity Holders 4 3 ,7 6 9 4 1 ,3 9 5 TOTAL LI ABI LI TI ES AND EQUI TY 3 8 2 ,5 6 2 3 3 0 ,8 7 2 1 0
Earnings & Profitability Trends Annualized Gross Earnings Cost to I ncom e Ratio 45 40 1 5 1 .3 4 1 4 2 .5 6 35 1 2 9 .8 8 ₦'million 30 25 9 5 .1 5 8 7 .7 2 20 15 10 5 - 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 • Gross earnings increased by 1 9 .9 0 % betw een 2 0 1 3 and 2 0 1 4 • PBT - ₦ 3 .1 billion in 2 0 1 4 com pared to ₦ 1 .9 billion in 2 0 1 3 . PBT up 5 8 .8 8 % 1 1
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