Wema Bank is among best five banks in Q1 2022

WEMA Bank Plc has emerged among the top five most profitable banks in terms of Profit After Tax (PAT) growth in the first quarter (Q1) of 2022.

The banking industry generally recorded impressive growth in the first quarter of the year, recording a 23.24 per cent year-on-year increase in real Gross Domestic Product (GDP), evidenced by the performance of the 12 commercial banks listed on the Nigerian Exchange (NGX).

Wema Bank proved its mettle in the key metrics of total assets growth, customer deposit growth, profit after tax growth, loan book growth, return on average equity and cost-to-income ratio.

According to a special report on the financial performance of quoted Nigerian banks in the first quarter of 2022 by the research arm of Nairametrics, some banks dominated the efficiency, deposit and profitability metrics, especially newly re-engineered banks like Wema Bank and Unity Bank, among others.

Indeed, Wema Bank’s excellent showing across all the performance metrics earned it the second best bank in the first quarter of 2022 after Zenith.

“Taking the average of the performance of the banks across the six metrics under our radar, we see Zenith Bank on top of the rank, followed by Wema Bank, Stanbic IBTC, First Bank and Fidelity Bank based on their Q1 2022 numbers,” the report said.

For the analysis, the Q1 2022 results of 12 banks were tracked, namely: Access Holdings, FBN Holdings, FCMB, Fidelity Bank, Wema Bank, GT Holding, Stanbic IBTC, Sterling Bank, Union Bank, UBA, Unity Bank, and Zenith Bank.

Wema Bank led the others in profit after tax growth in the first quarter of 2022 with 119 per cent compared with what it made in the previous quarter. Other banks with strong showing in this category are FBN (108 per cent); Sterling Bank (47.9 per cent) and FCMB (44.6 per cent).

The 12 banks tracked by the analysts posted an aggregate profit after tax of N275.27 billion in Q1 2022, which is 14.7 per cent higher than the N239.95 billion recorded in the previous year (Q1 2021).

The banks were able to record an improved bottom line despite the CBN monetary policy leaning towards a dovish direction, that is, keeping interest rates low. However, the apex bank in its latest MPC meeting has raised the benchmark interest rate from 11.5 per cent to 13 per cent and banks could be seeing a rise in their interest earnings going forward.

According to the report, in terms of net profit, Zenith Bank recorded the highest profit after tax of N58.19 billion but In terms of growth, Wema Bank topped the list with a 119 per cent growth in its bottom line.

Wema Bank also came third in terms of cost-to-income ratio which shows a company’s cost as a proportion of its income. First Bank came first in this category, followed by FCMB. This gives investors a clear view of how efficiently a bank is being run.

In terms of total assets growth, Wema Bank came fifth during the first quarter, recording a growth of 7.7 per cent. Fidelity and Zenith Bank led here with a growth of 22.9 per cent and 18.9 per cent, respectively.

The analysis of the combined assets of the 12 reviewed listed banks reveals that the total assets increased by 6.7 per cent from N57.67 trillion recorded as of December 2021 to N61.54 trillion in the review period. The total asset of the listed banks amounts to over 85 per cent of Nigeria’s annual real GDP (2021 estimate).

“The increase in the total assets of the banks indicates a stronger financial position. All the banks under study recorded an improvement in their total asset base,” the report said.

Other highlights of the report reveal the emergence of Zenith Bank as recording the highest growth in customer deposits, followed by Fidelity and Unity Bank with 18 per cent and 17.4 per cent increases, respectively, with Wema coming fourth (8.8 per cent) in terms of customer deposit growth.

The total customer deposits stood at N40.34 trillion as of the first quarter of the year, representing an 8.7 per cent increase compared to N37.1 trillion recorded as of the previous quarter.

Fidelity Bank led the list of banks with the highest loan book growth in the first quarter of 2022. Specifically, its customer loan increased by 28 per cent to N1.83 trillion from N1.43 trillion recorded as of December 2021.

The report placed Wema Bank as fifth on the list of banks with the best return on equity with a growth of 15.96 per cent. Access, UBA, GT and Zenith are the top ranks here with growth of 21.39 per cent, 20.4 per cent, 19.3 per cent, and 19.2 per cent, respectively.

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