•Records N95.354b gross earnings in Q3
Agusto & Co has upgraded Wema Bank Funding SPV Plc’s Series II Bond to ‘Bbb+’ with a stable outlook, from the previous ‘Bbb’ score.
Wema Bank Funding SPV Plc is a special purpose vehicle (SPV) set up by Wema Bank Plc for the issuance of debt securities.
Agusto in its latest rating assessment report, said it upgraded the rating of Wema Bank Funding SPV Plc’s Series II N17.7 b seven-year fixed rate bond to ‘Bbb+’ as a result of significant improvement on key metrics of assessment.
The rating assigned to the bond is hinged on the sponsor’s upgraded rating of ‘Bbb’ and is a notch higher given that 45 per cent of the bond proceeds was invested in a 13.53 per cent, 7-year Federal Government of Nigeria (FGN) bond and held in the custody of the Joint Trustees,’’ Agusto & Co stated.
It further noted that ‘Bbb+’ assigned Wema Bank affirmed the leading financial institution’s improved profitability, satisfactory asset quality and liquidity profile.
‘‘In the unlikely event of a default, this provides some recovery prospects. The upgrade in the rating assigned to Wema Bank reflects its improving profitability metrics, satisfactory asset quality and liquidity profile,’’ the report stated.
Managing Director, Wema Bank Plc, Ademola Adebise said the latest positive assessment was exciting as the important rating adds to the series of positive outlooks that credible independent global ratings agencies have given to the bank which affirms the resilience of the bank as a stable financial institution.
“We are buoyed by these positive affirmations to recommit delivering innovative banking and financial solutions that foster inclusive growth for individuals and businesses, and more importantly pushing further Wema Bank’s frontiers as a major enabler of national economic growth,’’ Adebise said.
Also the bank recorded gross earnings of N95.345 billion in the third quarter ended September 30.
This represents 51.17 per cent year-on-year growth, from N63.077 billion posted in the same time in 2021.
According to the bank’s unaudited financial results for the third quarter of 2022, the growth in gross earnings reflects an increase in loans and advances and supported in a challenging macro economic environment.
The result shows that Interest income grew by 55.14 percent y-o-y, benefitting from strong loan growth and a higher yield environment to N79.973 billion, from N51.550 billion in 2021.
Similarly, Interest income from loans and advances grew by 40.23 percent to N62.245 billion in 2022 from N44.387 billion in 2021. The income from loans and advances had a 77.83 percent contribution to the interest income for the period.
Net fee and commission income grew to N12.015 billion in the third quarter of 2022 from N8.722 billion in 2021 on the back of a rise in credit-related fees and income, electronic banking income, and trade transaction income, amongst others.
Fees on electronic products also grew by 44.55 percent to N2.550 billion from N1.764 billion in third quarter 2021.
The bank recorded strong growth in profit before tax from N7.208 billion in 2021 to N9.457 billion in 2022, a growth of 31.2 per cent, while interest expenses grew by 79.65 per cent to N41.501 billion in 2022 from N23.100 billion in 2021.
Commenting on the result, the Managing Director/CEO of the bank, Ademola Adebise, attributed the sterling performance to the rising and expanding streams of income from both both fee based transaction lines as well as interest from efficient lending activities.
“Our excellent fundamentals as well as high efficiency in risk management and growing streams of income from various business lines are responsible for our upward trajectory across board. We intend to finish the year on a high and further delight our shareholders with impressive dividend yield at the end of the financial year”, he said.
Also commenting on the result, the bank’s Chief Finance Officer, Tunde Mabawonku, described the result as the testament of the bank’s resilience in a difficult environment characterised by high operating cost and inflation.
“We are building systems and structures that will consistently deliver on results through efficient customer service, customised products and services, and effective internal control measures”, he said.