Wema Bank sees increase in FY'19 PAT, here’s how they plan to weather COVID-19 shocks

Wema Bank, a leading commercial lender in Nigeria, has reported an impressive 56.2% increase in its profit after tax for the year 2019. The bank also saw a notable 32% rise in gross earnings, reflecting a strong financial performance during that year. Tunde Mabawonku, the Chief Finance & Strategy Officer at Wema Bank, recently joined CNBC Africa to dissect these numbers and shed light on the bank's strategies moving forward. Mabawonku highlighted that the key performance indicators for Wema Bank in 2019 were quite impressive. The profit after tax surged by 56%, deposits increased by 50%, and the total assets of the bank grew by 52% to 715 billion Naira. These figures underscore the steady growth and turnaround of Wema Bank in recent years. Mabawonku attributed the positive financial results to the bank's relentless focus on improving its financial performance and expanding its customer base. Reflecting on the operating environment in 2019, Mabawonku described it as relatively stable compared to previous years. Despite some regulatory interventions such as the Loan-to-Deposit Ratio (LDR) and Cash Reserve Ratio (CRR) policies, Wema Bank was able to navigate through the challenges and make significant progress throughout the year. The bank's gross earnings and deposits showed robust growth, and it even declared a dividend for its shareholders, reflecting its strong financial position. One of the key strategies that propelled Wema Bank's growth in 2019 was its focus on digital transformation. The bank witnessed a surge in digital banking transactions, with nearly half a million transactions on its platform. Mabawonku emphasized the importance of customer acquisition and platform stability in driving the bank's earnings. By leveraging technology and expanding its digital offerings, Wema Bank was able to attract a diverse range of customers, including individuals, PFAs, large corporations, and SMEs. As the COVID-19 pandemic continues to pose challenges for businesses worldwide, Wema Bank has been proactive in implementing strategies to weather the storm. Mabawonku highlighted the bank's resilience, built over 75 years of operations, as a guiding principle in its response to the crisis. Wema Bank has focused on enhancing its risk management practices, automating processes, strengthening customer relationships, and promoting digital channels for customer interactions. The bank's agility and adaptability in the face of the pandemic have positioned it well to navigate through the uncertainties of the post-COVID era. Looking ahead, Mabawonku shared that Wema Bank expects the first quarter of 2020 to be relatively stable, although the full impact of the pandemic may not be fully reflected in the Q1 numbers. As the bank prepares for potential challenges in the coming months, it remains committed to maintaining sufficient capital reserves, supporting customers through loan restructuring, and driving operational efficiency through technology. In conclusion, Wema Bank's strong financial performance in 2019 provides a solid foundation for the bank to navigate through the COVID-19 challenges. By focusing on digital innovation, customer-centric strategies, and prudent risk management, Wema Bank is well-positioned to weather the economic uncertainties and emerge stronger in the post-pandemic landscape.