Wema Bank Plc · NSENG:WEMABANK
Wema Bank — FY2023 Earnings Presentation
39 slides from Wema Bank's earnings presentation, 2024
Slide 1: FY 2023 Wema Bank Investor/Analyst Presentation
FY 2023 WEMA BANK INVESTOR/ANALYST PRESENTATION
Slide 2: Forward-looking statements disclaimer
• This presentation contains or incorporates by reference “forward-looking statements” regarding the belief or current expectations of Wema Bank Plc, the Directors and other members of its senior management about the Bank’s businesses and the transactions described in this presentation. Generally, w
Slide 3: Section: Introduction, Financial Highlights, Strategy & Outlook
Section 01 Introduction 02 Financial Highlights 03 Strategy & Outlook
Slide 4: Introduction
W WEMA BANK Introduction
Slide 5: The global economic landscape is expected to see mild growth
The global economic landscape is expected to see mild growth as uncertainties abound. Global Economy Geopolitical risks Inflation Financial Stress • The global economy continues to • Elevated trade tensions between • Inflation is falling, but it’s not • The sharpest increase in global experience slo
Slide 6: Operating Environment
Operating Environment Inflation Naira Weakness Fiscal Revenue Inflation continues to trend up and impact consumer spending power. The Naira continues to struggle Challenges It is now at 33.20% as at March against the greenback and has now The Fiscal space continues to be 2024 from the 31.7% in Febru
Slide 7: Federal Government programs to stimulate economic growth
The Federal Government has continued to implement programs, initiatives and policies to stimulate and boost economic growth Intervention Funds Liberalization of the Foreign Settlement of States Debt Exchange Market FG has set aside N16.1 billion FG announced N500 billion in monthly for the settlemen
Slide 8: Operating Environment – Heightened Regulatory Interventions
Operating Environment – Heightened Regulatory Interventions Recapitalization Interest Rate Hike Rationalization of Bureau De’ Change The Central Bank of Nigeria hikes New Licensing Requirements interest rates from 18.75% - Central Bank introduced new license introduced by the Central Bank of 24.75%
Slide 9: Expectations for Nigeria in 2024
Expectations for Nigeria in 2024 Continued Improved Refined Modest GDP Moderating Currency Petroleum Growth Inflation Volatility Sufficiency Sustained Political Continued Higher energy Costs Fiscal Instability Insecurity Pressure
Slide 10: We continue to strengthen the corporate governance structure
We continue to strengthen the corporate governance structure Our board has a strong mix of executive and non-executive directors (with three of them being independent) to maintain its independence and separate its functions of governance from management. Board Diversity There were changes in our boa
Slide 11: Expanding physical presence in key locations
We have continued to expand our physical presence in key locations driven by business dynamics. We offer retail banking, SME banking, corporate banking, treasury, trade services and financial advisory to our ever-expanding clientele. With a network of over 150 business offices backed by a robust ICT
Slide 12: Focus on critical areas to drive corporate growth
The Bank continues to focus on 4 critical areas to drive corporate growth. Corporate/Commercial Digital & Retail Public Sector Effective risk Business Transactions Opportunities management We will continue to drive We will deepen our retail There are significant We will mitigate our risk deposit and
Slide 13: Financial Highlights
Financial Highlights
Slide 14: Strong FY 2023 Performance Summary
Strong FY 2023 Performance Summary Gross Earnings Gross Earnings of N225.75billion, an increase of 72.22% from N131.08billion in FY’22, due to an increase of 73.92% and 64.95% in Interest Income and Non-Interest Income respectively. Customer Deposit Customer Deposit had an increase of 59.58% in FY 2
Slide 15: Improved balance sheet positioning the bank for stronger growth
Improved balance sheet positioning the bank for stronger growth 225,747 122,330 2,240,065 139,322 43,591 Gross Earnings Operating Income Total Assets Shareholders Funds Profit Before Tax p 72% p 65% p 56% p 69% p 196% 91,623 78,739 35,932 801,103 1,860,574 Net Interest Income Operating Expense Profi
Slide 16: Improved efficiency despite headwinds
Improved efficiency despite headwinds COST OF FUNDS NET INTEREST MARGIN 4.8% 7.39% 6.73% 4.3% 4.2% 6.2% 5.7% 3.3% FY'20 FY'21 FY'22 FY'23 FY'20 FY'21 FY'22 FY'23 YIELD ON ASSETS Comments 18.22 16.32 • Cost of funds increased by 13% in FY 2023 (4.8%) from FY 2022 (4.2%) 14.20 14.30 due to the increas
Slide 17: Regulatory costs and high inflation drive operating expenses
Regulatory costs and high inflation remain key drivers of operating expenses Operating Expenses (N’bn) Cost to Income Ratio Analysis 80.15 122.33 64.37 45.62 45.86 78.74 74.32 33.66 56.6 59.54 24.14 44.22 6.12 18.89 4.55 3.4 3.14 26.76 16.68 21.33 14.08 FY 2020 FY 2021 FY 2022 FY 2023 FY'21 FY'22 FY
Slide 18: Improved asset utilization resulting to higher returns
Improved asset utilization resulting to higher returns Earnings Analysis (%) Total Assets Breakdown (₦’bn) ROAA ROAE PBT 4% 3% 2 43.59 7% 12% 2 39.28 2% 2% 24% 18% 14% 28% 17.8 19.28 14.3 37% 36% 37% 0.9 1.2 1.14 2.37 36% 14.75 36% 36% 34% 12.38 32% 5.95 FY'20 FY'21 FY'22 FY'23 Other Assets Property
Slide 19: Diversified loan book growth supported by risk management
Diversified loan book growth supported by effective risk management practices Net Loan Analysis per Sector (₦’bn) FY 23 16% 15% 20% 18% 4% 5% 6% 4% 14% ₦801.47bn FY 22 18% 13% 14% 15% 7% 6% 4% 5% 15% ₦539.14bn GENERAL COMMERCE GENERAL OIL AND GAS MANUFACTURING CONSTRUCTION AGRICULTURE, FORESTRY AND
Slide 20: Non Performing Loans dropped
Non Perfoming Loans dropped NPLs by Currency NPLs by Sectors NPLs by Coverage Local Currency (LCY) 6.01% Q3’22 4.90% 15% 4.31% FY'22 34,748,433,537.64 39% 174.94% 24% 99.21% FY'23 36,446,315,207.13 21% 85.03% 1% Foreign Currency(FCY) 26% 29% Q3’23 FY'22 4,638,950,452.86 11% 8% 26% GENERAL COMMERCE G
Slide 21: Deposit growth and improved deposit mix
Deposit growth and improved deposit mix Total Customer Deposits (bn) Customer Deposit Mix (bn) Corporates Retail 264,296 269,175 1,861 96,306 867,565 188,369 313,636 39,518 28,218 198,355 407,978 131,428 1,166 228,984 FY'22 FY'23 FY'22 FY'23 927 804 Term Deposits Current Deposits Others Term Deposit
Slide 22: Focus on digital channels to support customer growth
Focus on digital channels to support customer growth and profitability USSD Mobile Banking USSD Mobile Banking *# Transaction Value (₦’bn) Transaction Value (₦’bn) *# Transaction Count (mn) Transaction Count (mn) 91% 35% 73% 76%…... 100.51 346.83 3,806.39 256.78 2,202.11 55.83 52.73 31.6 FY'22 FY'23
Slide 23: Agent banking to support financial inclusion
Agent banking as a tool to support financial inclusion and customer needs Agency Agency Funds Agent Acquisition Agent Account Funds Transfer Transfer Acquisition Volume Value (₦’bn) 82% 40% 191% 64% 48,216,6 48,873 1,228,566 2,257,005 80 879,386 26,806 29,322,007 776,288 FY 2022 FY 2023 FY 2022 FY 2
Slide 24: Capital position remains within the regulatory limits
Capital position remains within the regulatory limits CAR TRAJECTORY % Capital Adequacy Ratio (CAR) of 16.04% remains above the regulatory minimum of 10%. Tier 1 capital represents 75% of the Bank’s CAR with a ratio of 13.69% The Bank’s Capital has been sensitized for Basel III compliance and found
Slide 25: Update on our Capital Raise program
Update on our Capital Raise program AT1 Capital Raise N40bn Rights Issue • The first part of the Capital • The N40 billion capital raise Raise exercise has been rights issue commenced at the completed. beginning of Q3, 2023. • We have successfully raised • The bank has concluded it’s N21bn of AT1 Qu
Slide 26: CBN's New Capital Requirements
CBN’s New Capital Requirements
Slide 27: The new licensing requirements from the Central Bank
The new licensing requirements from the Central Bank International National Banking Regional Banking Banking License License License The minimum capital base for The minimum capital base for The minimum capital base for commercial banks with commercial banks with national commercial banks with regio
Slide 28: Shareholders Fund: need to raise additional capital
Our current capital position means we will need to raise additional capital Wema Bank Shareholders Wema Bank – Qualifying Capital Fund S/N Balance as at Dec’31st 2023 Amount (‘000) 1 Share Capital 6,429,078 2 Share Premium 8,698,230 Rights Issue awaiting CBN 3 40,000,000 approval Qualifying Capital
Slide 29: Our options for raising fresh capital
Our Options for raising fresh capital include the following: o Rights issue to existing shareholders o Public Offer for Subscription. o Special Placement to strategic partners o Merger and or Acquisition of suitable bank with the right capital base The order of preference was reached on the back of
Slide 30: Our path to N200bn in new capital
Our path to N200bn in new capital 1. After a detailed review and in line with the Bank’s growth plan, the Bank will retain its Commercial Bank with National authorization license and not downgrade or seek for other licensing regime. 2. The Bank will approach the markets to raise a target sum of N200
Slide 31: Detailed timeline for the capital raise program
The bank has created a detailed timeline for the capital raise program April 2024 April 2024 May 2024 May 2024 Discussion with Discussion with Exco Approval on Board Approval on Capital raise Plan Capital Raise Plan Institutional Strategic Shareholder Investors May 2024 September 2024 December 2024
Slide 32: Strategy & Outlook
Strategy & Outlook
Slide 33: Executing our strategic plan: 5-phased strategy since 2009
Executing our strategic plan has always been central to improving performance We have been guided by a 5-phased strategy since 2009 2009-2010 2011-2016 2017- 2020 2020 - 2023 2024 - 2026 Stop The Stabilize Grow Lead with Become a Bleeding The Bank The Bank Digital SIB Bank We’re Here
Slide 34: We want to break into the top tier
Our growth driven aspirations are crystal clear… F U G (W) A Z We want to break into the top tier of banking in Nigeria…
Slide 35: 2024 FY Guidance
2024 FY Guidance FY FY FY FY 2024 Wema Bank’s 2024 PBT Aspiration 2020 2021 2022 2023 Budget NGN billions PBT (NGN’b) 6.9 11.2 14.7 43.59 50.07 60 50.0 Deposit (NGN’b) 804 927 1,166 1,860 2,250 50 43.5 Total Assets 975 1,147 1,434 2,240 2,973 40 (NGN’b) 30 ROAE 14.3% 16.8% 19.25% 39.28% 32.19% Depos
Slide 36: Our Sustainability Strides are preparing us for the long haul
Our Sustainability Strides are preparing us for the long haul ENVIRONMENTAL Recycling Energy Efficiency Cleanup & Renewable 77 Branches 36 solar-powered Advocacy Energy Drive enrolled with over branches. Carbon Over 1577kg waste Green Energy 25,000kg recyclables emissions reduced by was removed Fina
Slide 37: The Wema Bank ecosystem continues to be a diverse one
The Wema Bank ecosystem continues to be a diverse one OWNERSHIP Over Listings 350,000 2.28m Shareholders unique users Listings OPERATIONS & FINANCIAL HIGHLIGHTS ₦225.75bn ₦ ₦ 16 4.95m 149 in Gross Earnings Countries with 279.5k ₦2.24trn ₦184.48bn ₦43.59bn 39.28% Customer Branches Bilateral Trade Ear
Slide 38: Our focus on customer satisfaction is multi-faceted
Our focus on customer satisfaction is multi-faceted
Slide 39: Thank You / Contact
CONTACT For further information, please contact: THANK YOU Tunde Mabawonku Executive Director(Digital, Retail & Finance) Tunde.Mabawonku@wemabank.com +234 1 2779405 Femi Akinfolarin Head Corporate Strategy & Investor Relations femi.akinfolarin@wemabank.com +2348134527279 Wema Bank Investor Relations