Wema Bank Plc – Strong Loan Growth and Profitability Drive Solid 9M 2025 Performance

Executive Summary

Wema Bank Plc delivered a robust performance for the nine months ended September 30, 2025, with strong revenue growth, expanded loan book, and improved profitability metrics. The Bank’s financial results reflect strong net interest income, effective cost management, and disciplined credit risk control. The Bank’s interest income rose 73% YoY to ₦396.95 billion, driven by growth in loans and advances. Net interest income after impairment for credit losses stood at ₦224.61 billion, representing a 138% increase from 9M 2024, highlighting improved credit management and asset quality. Operating income totaled ₦286.17 billion, up 87% YoY, while profit before tax increased 141% YoY to ₦146.44 billion. Profit after tax for the period rose 141% YoY to ₦127.40 billion, with basic EPS of ₦738.52, reflecting strong value creation for shareholders.

The balance sheet remained robust, with total assets of ₦3.978 trillion, deposits of ₦2.725 trillion, and total equity of ₦512.02 billion, providing a strong liquidity buffer and capital adequacy to support lending growth and regulatory compliance.

Financial Highlights – Statement of Profit or Loss

₦’ million 9M 2025 9M 2024 % Δ

Interest Income 396,951 229,910 +73%

Interest Expense (161,333) (124,091) +30%

Net Interest Income 235,617 105,820 +123%

Impairment Loss (11,006) (11,680) -6%

Net Interest After Impairment 224,611 94,140 +139%

Operating Income 286,169 153,347 +87%

Operating Expenses (139,727) (92,731) +51%

Profit Before Tax 146,441 60,616 +141%

Income Tax (19,036) (7,881) +142%

Profit After Tax 127,405 52,735 +142%

Basic EPS (kobo) 738.52 328.13 +125%

Revenue and Profitability Analysis

• Net Interest Income (NII) is the key driver, supported by strong loan growth and improved yields.
• Impairment charges remained controlled at ₦11.01 billion, indicating effective risk management.
• Fee and commission income rose 11% YoY to ₦42.93 billion, reflecting expanded digital banking services.
• Operating expenses grew 51% YoY to ₦139.73 billion, reflecting strategic investments in technology and personnel.
• Profit margins strengthened significantly, with PAT margin improving to 44%, reflecting operational efficiency and strong revenue growth.

Balance Sheet Overview

₦’ million 30-Sep-25 31-Dec-24 % Δ

Total Assets 3,978,382 3,593,228 +11%

Loans & Advances 1,561,756 1,201,209 +30%

Cash & Cash Equivalents 195,824 278,925 -30%

Deposits 2,725,355 2,523,815 +8%

Total Equity 512,021 256,421 +100%

Contingent Liabilities 709,795 387,023 +83%

Interpretation

• The Bank’s asset base grew 11% YoY, primarily driven by loans and advances, reflecting aggressive lending to retail and corporate customers.
• Equity doubled YoY, largely due to retained earnings accumulation and capital injections.
• Deposits grew 8% YoY, maintaining a strong funding base for continued loan expansion.
• Liquidity ratios remain strong, although cash balances declined, offset by investment securities and loans growth.

Key Ratios & Metrics

Metric 9M 2025

Net Interest Margin 10.6%

Loan-to-Deposit Ratio 57%

Cost-to-Income Ratio 49%

ROA 3.2%

ROE 25%

EPS Growth 125%

Strategic Insights

• Wema Bank’s growth is underpinned by strong lending performance, robust digital banking operations, and diversified income streams.
• Controlled impairment losses demonstrate effective risk management despite macroeconomic pressures.
• Capital adequacy and liquidity buffers are strong, supporting regulatory compliance and future growth initiatives.
• Increased equity base positions the Bank to expand lending and invest in fintech and digital platforms.

Strengths

• Strong net interest income growth and high profitability.
• Effective credit risk management with stable impairment charges.
• Significant capital base and liquidity to support strategic initiatives.
• Robust earnings growth driving shareholder value.

Weaknesses

• Decline in cash balances may impact short-term liquidity.
• Operating expenses growing rapidly, requiring ongoing efficiency focus.
• Contingent liabilities have increased significantly, reflecting off-balance sheet exposures.

Outlook

Wema Bank is well-positioned for continued growth, driven by retail and corporate lending, digital banking expansion, and disciplined risk management. Strategic investments in technology and digital platforms are expected to support fee income growth and enhance operational efficiency. The Bank’s strong equity and liquidity position provide resilience against macroeconomic volatility.

Analyst View

“Wema Bank delivered a strong 9M-2025 performance with record profitability and robust growth in loans and deposits. Effective credit risk management and diversified revenue streams position the Bank for sustainable long-term growth.”