Wema Bank Plc. has attributed the drop in its business performance as of year end March 31, 2016 to the challenging environment led by weaker oil prices, a tight monetary policy and rising inflation.
The bank reported a profit of N429.53m between March 2015 and March 2016, a fall of 17.87 per cent year-on-year from N522.99m.
Its profit before tax also fell to N505.32m from N615.28m for the same period.
Commenting on the result released on Wednesday, the Managing Director/Chief Executive Officer, 'Segun Oloketuyi, said, "Considering the challenging operating environment, the bank has been able to deliver top line growth with gross earnings increasing by 6.1 per cent to N11.3bn compared to N10.6bn in the same period last year.
"We have continued to grow our retail volumes in 2016; while the number of new accounts and card activations has increased by over 50 per cent and the deployment of alternative platforms has grown by 15 per cent. We remain focused on keeping our cost profile under check while gradually growing the asset portfolio where we see optimal opportunities.
"While concerns remain as we progress in the financial year around, rising inflation due to the impact of higher energy, transportation prices and a slower Gross Domestic Product growth due to a lack of stimulus, we remain focused on executing our strategies to drive economic production."
Despite these headwinds, the bank said it believed that it would improve its 8.2 per cent growth in interest income over Q1 2015 which it said would translate into improved net interest margins and consequently, improving profitability over the course of the year.
Its Chief Financial Officer, Tunde Mabawonku, was quoted as saying "In spite of the challenging market conditions, the bank grew its interest income by 8.2 per cent to N9.7bn from N8.9bn in Q1 2015. While trading income has not been immune from the larger macro headwinds, our diversification strategies are yielding results as fee and commission income grew by 17.1 per cent to N1.35bn from N1.15bn in the same period last year.
"Our sustained commitment to optimising costs was underpinned by a 2.2 per cent decline in operating expenses to N5.14bn from N5.25bn in Q1 2015 despite inflationary pressures. We experienced a year-on-year four per cent decline in net interest income to N4bn, this was mitigated by a 17 per cent growth in our non-interest income to N1.3bn over the same period."
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