Wema Bank H1 Pretax Profit Surges 54% as Trading Gains Offset Fee Decline
Nigeria's Wema Bank delivered a 54% surge in first-half pretax profit driven by loan expansion and a sharp rebound in trading gains, though share dilution reduced earnings per share and left the stock trading flat.
Wema Bank Plc recorded a pre-tax profit of N154.56 billion for the six months ending June 30, 2026, a 53.65% increase from the prior year. Profit after tax climbed 50.12% to N131.37 billion. The results were underpinned by a 21.73% expansion in the loan book to N2.12 trillion and a 657% surge in net trading income to N21.53 billion, pushing total assets to N5.76 trillion.
Despite this bottom-line expansion, earnings per share fell to N6.55 from N7.13. This decline was entirely attributable to share dilution during the period. For existing shareholders, the underlying profitability improved significantly, but their individual claim on those earnings was diluted.
The composition of the bank's revenue shifted noticeably during the period. Net interest income grew 51.25% to N195.45 billion as interest expense growth lagged behind the 42.70% jump in interest income. Conversely, net fee and commission income dropped 20.48% to N36.09 billion, pointing to softer electronic banking revenues. The heavy reliance on volatile trading gains to drive overall income growth warrants close monitoring by investors.
Cost pressures intensified, with personnel expenses rising 37.82% to N42.85 billion due to inflation and regulatory costs. Credit quality remained stable, as net impairment losses rose only marginally to N831.11 million despite the aggressive loan growth. Customer deposits grew 4.96% to N3.45 trillion, while shareholders' equity increased 12.89% to N700.45 billion, supported by retained earnings even after a N50.15 billion dividend payout.
The market's reaction to the earnings report was muted. Wema Bank shares traded flat at roughly N31.65 on July 29. The stock is still up 55.2% year-to-date from its N20.40 starting price, but investors appear to be weighing the robust profit growth against the dilution, rising cost base, and the decline in recurring fee income.
