fy2020 results

FY2020 ResultsI N V E STO R / A N A LYSTS ’ P R E S E N TAT I O N

• This presentation contains or incorporates by reference “forward-looking statements” regarding the belief or currentexpectations of Wema Bank Plc, the Directors and other members of its senior management about the Bank’s businessesand the transactions described in this presentation. Generally, words such as ‘‘could’’, ‘‘will’’, ‘‘expect’’, ‘‘intend’’, ‘‘anticipate’’,‘‘believe’’, ‘‘plan’’, ‘‘seek’’ or similar expressions identify forward-looking statements.

• These forward-looking statements are not guarantees of future performance. Rather, they are based on current views andassumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside the controlof the Bank and are difficult to predict, that may cause actual results to differ materially from any future results ordevelopments expressed or implied from the forward-looking statements. Such risks and uncertainties include, but are notlimited to, regulatory developments, competitive conditions, technological developments and general economic conditions.The Bank assumes no responsibility to update any of the forward-looking statements contained in this presentation.

• Any forward-looking statement contained in this presentation, based on past or current trends and/or activities of WemaBank should not be taken as a representation that such trends or activities will continue in the future. No statement in thispresentation is intended to be a profit forecast or to imply that the earnings of the Bank for the current year or future yearswill necessarily match or exceed the historical or published earnings of the Bank. Each forward-looking statement speaksonly as of the date of the particular statement. Wema Bank expressly disclaims any obligation or undertaking to releasepublicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Wema Bank’sexpectations with regard thereto or any change in events, conditions or circumstances on which any such statement isbased.

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Forward Looking Statements

Cautionary Note Regarding

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Content• The Operating Environment

• Overview of The Bank

• FY 2020 Performance Review

• Risk Management

• Capital and Funding

• 2021 Outlook and Strategy

• Appendix

4P r e s e n t a t i o n t o I n v e s t o r s & A n a l y s t s – 2 0 2 0 F u l l Y e a r R e s u l t s

The Operating Environment

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66.00

22.76

41.15 40.9551.80

38.60

35.16

36.19 35.74 35.37

Q4'19 Q1'20 Q2'20 Q3'20 Q4'20

Brent Crude Oil (US$/b) Exernal Reserves (US$'bn)

• Inflation surged all through the year, up from FY’2019 figures. Inflation figuresstarted the year at 12.13% and rounded off at 15.75%. This growth was drivenby high food prices, insecurity, introduction of higher electricity tariffs, upwardreview of PMS price, and the pass-through effect of the pandemic.

• GDP grew by 0.11% in Q4’2020, bringing an end to two consecutive quarters ofcontraction (Q2, -6.10% and Q3, -3.62%) and easing the country out of arecession.

• Foreign reserves started the year below the $40bn benchmark. Depressedcapital inflows and steadily reducing reserves led the CBN to adjust the currencytwice, resulting in a 24% depreciation of the value of the Naira.

• Yields on Treasury Bills across all tenures dipped steadily last year, following theCBN’s restriction of OMO securities investment to banks and foreign investorsalong with the decision to re-issue only a portion of the maturing OMOinvestment.

Operating Environment

362

360

460 465 470

365

387

387 386 400

Q4'19 Q1'20 Q2'20 Q3'20 Q4'20

Parallel Interbank

7.98%

3.32%2.13%

1.23% 0.22%

9.06%

4.31%2.82% 1.67% 0.38%

10.92%

6.06%

4.15%3.29%

1.03%

Q4'19 Q1'20 Q2'20 Q3'20 Q4'20

Average 91 days T/Bills yield (%) Average 1-year T/Bills yield (%)

Average 182 days T/Bills yield (%)

Inflation & GDP growth

Brent Crude & External Reserves

Parallel & Interbank

T/Bills yield

12.13% 12.30% 12.60% 13.20%15.75%

2.27% 1.87%

-6.10%-3.62%

0.11%

Q4'19 Q1'20 Q2'20 Q3'20 Q4'20

Inflation (Y-o-Y%) GDP growth rate (Y-o-Y%)

• COVID-19’s disruptive impact resulted in major shocks across the globaleconomic landscape. Global supply chains, consumer demand, and financialsystems were all impacted along with the attendant loss of life.

• A breakout of civil unrest and discontent was also felt across the globe, asepitomized in Nigeria’s #EndSARS protests in October. This also had negativeimpacts for business and the economy.

• Oil prices started the year with an upward trend but dipped sharply with theemergence of the global pandemic. Subsequent periods had a swing in prices asa result of agreements around oil production cuts between OPEC and Russia,and the price per barrel hit $51.27 at the end of the year as news of approvedvaccines made the rounds.

Global Economy

Domestic Economy


Policy EnvironmentFeverish regulatory action to stay the fall of the Naira

• First Monetary Policy Committee (MPC) meetingfor the year, Cash Reserve Ratio (CRR) raised by500bp to 27.5%, all other parameters remainunchanged.

• Prohibition of registration of Forms M for theimportation of fertilizers, and of milk and itsderivatives (to all, save, six companies in the caseof the latter).

• CBN slashes interest rates on all applicableintervention facilities for 1-year effective March 1,2020.

• CBN suspends sale of FX to BDCs.

• MPR was maintained at 13.50% by the MPCalongside other parameters.

• CBN debits banks N1.4trn for failing to meet CRRtargets.

• CBN adjusts exchange rate for import dutypayment from N326/$1 to N361/$1.

• MPR reduced to 12.50%, all other rates retained.

• CBN approves regulatory forbearance for therestructuring of credit facilities in the OFIsubsector.

• CBN expands scope of regional banks in Nigeria, givescompliance timeframe.

• The apex bank adds Maize to the “41 banned list”.

• CBN reserves 60% of N220 billion MSMEs fund forwomen.

• CBN removes “third parties” from buying forex routedthrough Form M.

• MPC reduced MPR to 11.5%, asymmetric corridors werealso reduced to +100/-700 basis points around the MPRwhile other parameters were retained.

• CBN announces that it will pursue expansionarymonetary policies to fight recession.

• CBN retains MPR at 11.5% alongside allother parameters.

• CBN provides clarification on theoperations of Domiciliary accounts

• The CBN directs beneficiaries to receiveforeign transfers through IMTOs in foreigncurrency either in cash or paid into theirdomiciliary accounts.

• The Apex Bank issues a new licensingcategorization for Nigerian Paymentsystem.


Key Takeaways

The operating environment (global anddomestic) in 2020 was dominated by theCOVID-19 pandemic, which had widereaching implications for sectors rangingfrom Oil & Gas to Tourism & Hospitality.A series of fiscal and monetary reactionsintended to curb the impact of thispandemic and save lives created aturbulent business environment fororganizations, who were also scramblingto adjust to the “New Normal”.

The Federal Government, in a bid to offersupport and bolster economic activity,launched a number of intervention fundsand suspended interest payments onstate government debts.

As a reaction to the effects of thepandemic, the fiscal and monetaryauthorities rolled out a series of policiesintended to mitigate the worst of theexpected shocks. Notably, the CentralBank dropped the Monetary Policy Rate(MPR) first from 13.5% to 12.5%, andthen from 12.5% to 11.5% - a rate whichit has maintained since Q3 2020.

8P r e s e n t a t i o n t o I n v e s t o r s & A n a l y s t s – 2 0 2 0 F u l l Y e a r R e s u l t s www.wemabank.com

Overview of The Bank


Over

350,000Shareholders

₦81.38bn in Total Earnings

₦979.92bnin Total Assets

560,000+ accounts

opened

35bn transactions

executed

170,000+ cards issued

Listings

OW

NE

RS

HIP

CH

AN

NE

LS

Overview of the Bank

GO

VE

RN

AN

CE

Sustainability Partnerships

Bbb- (Stable)

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Board Members: 12

Non- Executives: 7

Executives: 5

2.57mnAccounts

394ATMs

157Branches

57%

43%

4,591Agency Banking

Partners

1,251Professional Staff

12,468POS terminals

Awards


Transaction Value (in ₦’ billions)

Transaction Volume (in ₦’ millions)

6.480.17 0.40

39.74

23.7516.80

0.16 0.98

37.2843.14

ALAT (Mobile) ALAT (Web) ATM CARDS* POS USSD

FY'19 FY'20

206.20

5.19 89.55

311.37

100.15 169.56

684.99

7.09

167.28

377.11

131.15

290.62

ALAT (Mobile) ALAT (Web) ATM CARDS POS USSD

FY'19 FY'20

Channels Performance

*Number of cards: 312,283 (FY’19); 364,381 (FY’20)

Growth recorded across the Bank’s channels, in line with our digital aspirations.

438.61

655.75


We have offered a robust platform for SMEs; Gaming & Entertainment

Developing new capabilities


Initiatives Objective

Internal Readiness

• Our disaster recovery sites were put on heightened alert. Business continuity plans to preserveessential business functions and ensure business continuity were also revamped & aligned withthe new health focus.

• The Bank focused on ensuring that there was sufficient liquidity to meet daily operations andregulatory requirements ensuring a deferral to liquidity considerations over profitability ones.

• The bank identified opportunities for revenue growth in new business areas, particularly inindustries like pharmaceuticals and healthcare, supporting with loans and transactional services.

• The Bank stress tested its balance sheet frequently using various scenarios.

• We prepared internally for the possible devaluation of the Naira and increased defaults in the Oil& Gas and other sectors. Finally, we put in place mechanisms to insulate us from increased non-availability of funds from the Central Bank.

• The Bank reviewed credit (Naira & FX) exposures to covid-19 impacted sectors & others –hospitality, aviation, etc. and worked with the customers to mitigate impact.

People Readiness

• We ensured that all clients were engaged actively by our relationship managers to identify painpoints and work to help with issue resolution during the period.

• During the lockdown period, it was essential to support customers by ensuring that all onlinecapabilities enjoyed 100% uptime, including POS and mobile banking platforms. The bank focusedon ensuring the successful execution of this target.

• We put in place the recommended precautionary measures and infrastructure required to combatthe spread of the virus across all our locations.

• We reskilled and re-tooled our workers in line with the requirements of the new ways of working.We also rolled out a Remote Working policy for our staff and limited in-office working days.

Wema Bank’s response to the COVID-19 pandemicWe created a “New-Normal” squad


Comments from Social Media

Wema Bank response to the COVID-19 pandemic…/2We continued to operate responsibly while supporting our customers

Lagos Ogun

Oyo Osun


FY 2020 PERFORMANCE REVIEW

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Earnings, Profit, Capital FY’2020 FY’2019 FY’2018

Gross earnings ₦81.38bn ₦94.89bn ₦71.53bn

PBT ₦5.93bn ₦6.76bn ₦4.80bn

PAT ₦4.58bn ₦5.20bn ₦3.33bn

CAR 15.01% 13.60% 18.01%

EPS 11.90k 13.50k 8.6k

Revenue Generation

Deposits ₦804.87bn ₦577.28bn ₦369.20bn

Loan (Net) ₦360.08bn ₦289.24bn ₦252.20bn

Interest income ₦64.55bn ₦70.68bn ₦57.63bn

Non-Interest income ₦16.83bn ₦24.21bn ₦13.89bn

Operating Efficiency

Cost-to-Income 85.89% 84.66% 87.16%

Yield on Assets 12.01% 16.47% 17.75%

Operating Expenses ₦36.11bn ₦37.30bn ₦32.58bn

Margin & Asset Quality

Net interest margin 5.74% 6.42% 7.08%

ROAE (annualized) 10.03% 14.71% 9.43%

ROAA (annualized) 0.61% 1.02% 1.09%

NPL (%) 4.70% 7.38% 4.98%

Loan to deposits 43.24% 48.61% 68.31%

Interest Coverage ratio 130.64% 100.84% 120.46%

Liquidity ratio 31.04% 32.37% 32.05%

2020 Financial Year Highlights


14.24%

Gross Earnings of N81.38 billion, a YoYdecline of 14.24% from N94.89 billion inFY 2019, on the back of a decline of8.67% and 30.48% in Interest Incomeand Non-Interest Income respectively.

Gross earnings

Operating Expense closed at N36.11billion, a drop of 3.19% (FY 2019;N37.30billion). This is on the back of aconscious effort to reduce cost andimprove cost to income ratio.

Net Loans and Advances ofN360.08illion a YoY growth of 24.49%(FY 2019; N289.24billion).

Profit Before Tax (PBT) of N5.93 billion, adecline of 12.25% YoY from N6.76 billionin FY 2019.

Customer Deposit of N804.87 billion, aYoY growth of 39.42%, (FY 2019; N577.28billion), with an improved CASA to termdeposit mix.

Total Asset of N979.52billion, a YoYgrowth of 36.83% (FY 2019; N715.87billion ).

Profit Before Tax

12.25%

3.19%

Operating expenses

Total Assets

36.83%

Customer Deposits

39.42%

24.49%

Net Loans and Advances

Performance YoY affected by the lull in business

2020 Financial Year Highlights


45.79

65.2771.53

94.89

81.38

FY'16 FY'17 FY'18 FY'19 FY'20

Gross Earnings (N’bn)


Earnings Trend

Interest Income

74%

Non Interest

Income 26%

Interest

Income 80%

Non Interest

Income 20%

Income Mix (FY’20) Income Mix (FY’19)

➢ Gross Earnings of ₦81.38billion, a decline of 14.24% YoY (FY’19 ₦94.89billion), driven by 8.67% and 30.48%drop in interest income and non-interest income, respectively.

➢ Gross Earnings for the year is a mix of Interest Income and Non-Interest Income of 80% and 20%respectively. (FY 2019: Interest Income 74%, Non-Interest Income: 26%).

COMMENTS


Interest Income (N’bn)


Earnings Trend…contd.

➢ Interest Income down by 8.67% to N64.55billion from N70.68billion in FY’19, drivers include:• Money Market Investment up by 107.80% y/y to N3.41billion From N1.64billion in FY’19.• Interest on Loans and Advances down by 13.18% y/y to N53.70billion from N61.84billion in FY’19• Investment Securities up by 3.51% y/y to N7.45billion from N7.20billion in FY’19.

➢ Non-Interest Income of N16,83billion from N24,21billion in FY’19, a decline of 30.48%, the drivers are:• Net Fees and Commission growth of 5.29% y/y to N8.42billion from N8.00billion in FY 2019. While there was growth in credit related and other fees,

electronic product fees declined by 30.58% (FY’20: N2.61billion; FY 2019: N3.76billion), on the back of CBN reviewed charges and fees for bankingservices which took effect in January 2020 and reduced activities during the year occasioned by the Covid-19 lockdown.

• Net Trading Income down y/y to N3.94billion from N14.79bn in FY 2019, this is due to reduced earnings on Treasury Bills (FY’20: N3.60billion; FY 2019:N14.52billion),

COMMENTS

Non-interest Income (N’bn)

0.61 0.15 1.31 1.64 3.41

38.29 45.01

51.01 61.84 53.70

5.14

7.92 5.32

7.20 7.45

44.04

53.07 57.63

70.68 64.55

FY'16 FY'17 FY'18 FY'19 FY'20

Money Market Investment Loans & Advances Investment Securities

6.19 5.64 6.51 8.00 8.42

2.124.98

5.53

14.79

3.941.49

1.571.86

1.42

4.47

FY'16 FY'17 FY'18 FY'19 FY'20

Net Fees & Commission Net Trading Income Others

9.8012.20

13.8916.83

24.21


Cost of funds improved as interest rates dropped

Interest Expense

➢ Interest Expense dropped by 24.60% y/y, despite the significant growth in deposit (39.42% y/y), driven by lowerinterest rate on deposit.

➢ Cost of funds dropped to 4.33% in FY 2020 from 6.90% in FY 2019

➢ Net Interest Income grew to N30.85billion y/y from N25.98billion in FY 2019.

COMMENTS

Interest Expense (N’bn) Net Interest Income (N’bn)

25.77

32.8930.00

44.70

33.7

FY'16 FY'17 FY'18 FY'19 FY'20

18.68 19.77

27.02 25.98

30.85

FY'16 FY'17 FY'18 FY'19 FY'20


FY'2020 FY'2019 YoY

In thousands of Nigerian Naira

Personnel expenses 14,082,228 14,870,989 -5.30

AMCON Levy 3,999,690 2,759,640 44.94

Depreciation and amortization 3,136,273 3,316,846 -5.44

NDIC Premium 2,400,075 1,742,504 37.74

Repairs and maintenance 1,933,390 1,903,682 1.56

Advertising and marketing 1,652,720 1,266,180 30.53

Technology and alternative channels 1,468,995 2,548,421 -42.36

Service charge 933,525 1,143,074 -18.33

General administrative expenses 893,645 1,078,029 -17.10

Other Professional fees 714,450 1,024,931 -30.29

Transport & Communications 474,971 540,394 -12.11

Security expenses 437,702 601,834 -27.27

Diesel Expenses 430,057 568,355 -24.33

Printing and stationery 414,028 438,277 -5.53

Others 3,141,684 3,499,990 -10.24

Total 36,113,433 37,303,146 -3.19

10.35 10.0012.34

14.87 14.08

2.31 2.322.62

3.32 3.14

12.13 14.45

17.62

19.1218.89

FY'16 FY'17 FY'18 FY'19 FY'20

Personnel Expenses Dep & Amortisation Statutory & Other Expenses

24.79 26.77

32.58

37.30 36.11

➢ Efforts towards cost optimization yielded positive results as total operating expenses reduced by 3.19% toN36.11billion y/y from N37.30billion in FY 2019 despite the increase in inflation (Dec’20 inflation: 15.75%).

➢ AMCON Levy & NDIC Premium increased y/y by 45% and 38% respectively.

➢ Cost to income ratio (CIR) remained flat at 85.89% (FY 2019: 85%).

COMMENTS

Operating Expenses (N’bn)

Continuous efforts in cost reduction strategies

Efficiency


6.57 6.61

7.08

6.42

5.74

FY'16 FY'17 FY'18 FY'19 FY'20

15.65

17.76 17.7516.47

12.01

FY'16 FY'17 FY'18 FY'19 FY'20

➢ Yield on Asset down to 12.01% from 16.47% in FY 2019

➢Net Interest Margin (NIM) down to 5.74% from 6.42% in FY 2019

COMMENTS

Yield on Assets (%) Net Interest Margin (%)

Margin still dependent on market rates

Efficiency & Margin Analysis


27%

15%53%

5%

DEMAND SAVINGS TIME DOM

24%

7%

38%

31%

Retail Corporate Treasury Commercial/SME

283254

369

577

805

FY'16 FY'17 FY'18 FY'19 FY'20

37%

11%

35%

17%

Retail Corporate Treasury Commercial/SME

Customer Deposits (N’bn) Deposit Mix (FY‘19) Deposit Mix (FY'20)

Deposit Type (FY ‘19) Deposit Type (FY ‘20)

➢ Customer Deposits grew by 39.34% to N804.87billion fromN577.28 billion in FY 2019. CASA balances increased to47% of total deposit from 39% in FY 2019.

➢ Deposit mix improved, but still below the ideal structure

➢ Cost of funds down to 4.33% in FY 2020 from 6.90% in FY2019.

23%

13%

61%

3%

DEMAND SAVINGS TIME DOM

Deposit growth and mix improved

Deposits Analysis

COMMENTS


Risk Management

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225.47272.3

314.00 336.15 333.23

36.12

29.07

35.9837.06 41.81

FY 2018 FY 2019 H1 2020 Q3 2020 FY 2020

LCY FCY

Total Loans by Segment – 2020FY Total Loans by Segment –2019FY

261.59301.37

349.98373.21 375.04

COMMERCIAL /SME

43%

CORPORATE

43%

PUBLIC

SECTOR

6%

INDIVIDUAL

8%

Gross loans and advances to Customers (N’bn)

Loan Portfolio Analysis

➢ Gross loans and advances increased by 24.45% y/y(From N301.37billion to N375.04billion)

➢ NPL ratio closed at 4.70% (FY 2019; 7.38%)

COMMENTS

CORPORATE

48%

PUBLIC

SECTOR

5%

INDIVIDUAL

8%

COMMERCIAL /SME…


4Others include Admin services, human health, ICT, water supply sewage,Arts, entertainment and recreation, Human health and social networks

➢ The Oil and Gas exposure consists of downstream trading entities and an upstreamsyndicated loan.

➢ General Sector comprises mainly all the personal loans, religious organizations, NGOsand logistic companies, while “General Commerce’ Sector covers loans to commercialbusinesses that deal in general goods.

➢ Construction Sector contains loans that are meant for contract-based constructionwhere repayments are obtained from contract payments whereas, Real Estate Sectorcovers loans for commercial and residential real estate where repayments come fromrents, sales and leases proceeds.

COMMENTS

Transportationand Storage

6% Power andEnergy

Professional, Scientific & Technical Services

3% 2%

Manufacturing8%

Oil & Gas

16%

Government

6%

General Commerce

17%

General

14%

Finance & Insurance

1%Education2%

Capital Market

2%

Agriculture, Forestry &

Fishing

3%

Construction

14%

Real Estate Activities

6%

Loan Distribution By Sector – FY’20

Well diversified Loan Book

Loan Portfolio Analysis

SECTOR FY 2020 FY 2019

(Nbn) (Nbn)

OIL & GAS 60.47 57.73

GENERAL COMMERCE 62.41 49.94

CONSTRUCTION 54.02 42.47

GENERAL 53.81 26.28

TRANSPORTATION & STORAGE 21.48 24.14

REAL ESTATE ACTIVITIES 22.85 22.54

GOVERNMENT 23.80 17.12

MANUFACTURING 30.37 16.77

POWER & ENERGY 6.19 15.36

AGRIC, FORESTRY & FISHING 10.10 11.72

PROFESSIONAL SCIENTIFIC & TECH 10.12 8.82

FINANCE & INSURANCE 2.50 3.16

EDUCATION 7.27 2.46

CAPITAL MARKET 6.18 0.40

OTHERS 3.47 2.46

GRAND TOTAL 375.04 301.37


SECTOR FY 2020 (%) FY 2019 (%)

(Nbn) (Nbn)

OIL & GAS 0.09 0.51 1.08 4.85

GENERAL COMMERCE 6.88 39.12 7.45 33.49

CONSTRUCTION 0,33 1.89 3.63 16.31

GENERAL 4.77 27.14 3.94 17.73

TRANSPORTATION & STORAGE 1.46 8.31 0.22 1.00

REAL ESTATE ACTIVITIES - - 2.83 12.73

GOVERNMENT 0.03 0.15 0.04 0.17

MANUFACTURING 1.63 9.29 0.49 2.22

POWER & ENERGY - - - -

AGRIC, FORESTRY & FISHING 0.75 4.28 0.65 2.92

PROFESSIONAL SCIENTIFIC & TECHNICAL 0.79 4.47 1.50 6.73

FINANCE & INSURANCE 0.08 0.47 0.14 0.62

EDUCATION 0.07 0.39 0.23 1.05

CAPITAL MARKET - - - -

OTHERS 0.70 3.97 0.04 0.18

GRAND TOTAL 17.59 100.00 22.24 100.00

Low Non-Performing Loans and Adequate Coverage

NPL Portfolio Analysis Net Loans and Loan to Deposit Ratio

227 216252

289

360

0

50

100

150

200

250

300

350

400

FY'16 FY'17 FY'18 FY'19 FY'20

0%

20%

40%

60%

80%

100%

120%

140%

Net Loans LDR

5.07%

3.52%

4.98%

7.38%

4.70%

0%

20%

40%

60%

80%

100%

120%

140%

0%

1%

2%

3%

4%

5%

6%

7%

8%

FY'16 FY'17 FY'18 FY'19 FY'20

NPL Coverage Ratio

FY 2020 (N’mn) 2019 FY (N’mn)

LCY Gross Loans 333,230 272,,302

FCY Gross Loans 41,809 29,066

Total 375,039 301,368

LCY NPLs 17,593 22,168

FCY NPLs 5.41 76

Total 17,598 22,244

Asset Quality


Capital & Funding

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2020 FY

N’m

2019 FY

N’m

Share Capital 19,287 19,287

Share Premium 8,698 8,698

Retained Earnings 7,104 3,254

Other Reserves 24,053 23,961

Total Equity 59,142 55,161

Shareholders Funds (N’mn)

Funding Sources

The Bank is a commercial bank with national authorization license at 10%.

Capital Adequacy Ratio (N’m)

Total Regulatory Capital

Total Risk Weighted Assets 278,133,743

Capital Adequacy Ratio 15.01%

41,760,881

48.5 49.6 51.8 55.2

59.1

FY'16 FY'17 FY'18 FY'19 FY'20

Total Equity (N’bn)

Customer Deposit , 82%

Current Tax

Liabilities, 0%

Other borrowed

Funds, 8%

Lease Liabilities,

0% Other Liabilities,

4%

Shareholders

Fund, 6%

Capital Ratio & Funding

COMMENTS

➢ Capital Adequacy Ratio at 15.01% is above the10%regulatory requirement for commercial banks(CAR FY 2019; 13.60%)

➢ Total Equity has grown YoY by 7.22% toN59.14billion


Capitalization and Liquidity

➢ Capital Adequacy and Liquidity ratios above the regulatory requirements of 30% (for Liquidity) and15% (for Capital adequacy Ratio).

➢ Capital base predominately made up of Tier I (core capital) which consists of share capital andreserves.

COMMENTS

Liquidity & Capital Adequacy Ratio Capital Mix

82.38%86.03%

74.74% 75.00% 75.02%

17.62%13.97%

25.26% 25.00% 24.98%

FY'16 FY'17 FY'18 FY'19 FY'20

Tier I TierII

30.91%

22.11%

32.05% 32.37%30.04%

11.07%14.32% 15.13%

13.60%15.01%

FY'16 FY'17 FY'18 FY'19 FY'20

Liquidity Capital Adequacy Ratio


7.0

5.8

8.6

13.5

11.9

FY'16 FY'17 FY'18 FY'19 FY'20

EPS (Kobo)Comment

• Earnings Per Share (EPS) has grown over the years, ithowever dipped in FY 2020 to 11.90k from 13.50k in FY2019.

• The bank has recommended a dividend payment of 4kobo per share for FY 2020 (FY 2019; 4kobo per share),in line with the Board’s approved dividend policy. Thistranslates into a dividend yield of 6%. This will be the3rd consecutive year that the bank has paid dividends.

Payment of dividends for the 3rd consecutive year

Earnings Per Share


Earnings, Profit, Capital Q1’2021 Q1’2020 FY’2020

Gross earnings ₦19.37bn ₦20.78bn ₦81.38bn

PBT ₦1.51bn ₦1.13bn ₦5.93bn

PAT ₦1.30bn ₦0.98bn ₦4.58bn

CAR 14.75% 11.60% 15.01%

EPS 13.60k 10.00k 11.90k

Revenue Generation

Deposits ₦795.54bn ₦596.44bn ₦804.87bn

Loan (Net) ₦367.69bn ₦289.24bn ₦360.08bn

Interest income ₦16.32bn ₦16.89bn ₦64.55bn

Non-Interest income ₦3.05bn ₦3.88bn ₦16.83bn

Operating Efficiency

Cost-to-Income 87.02% 88.74% 88.89%

Yield on Assets 10.04% 13.47% 12.01%

Operating Expenses ₦10.11bn ₦8.90bn ₦36.11bn

Margin & Asset Quality

Net interest margin 5.90% 5.41% 5.74%

ROAE (annualized) 9.98% 8.23% 10.03%

ROAA (annualized) 0.59% 0.58% 0.61%

NPL (%) 3.78% 7.38% 4.70%

Loan to deposits 44.70% 51.59% 43.24%

Interest Coverage ratio 189.14% 100.52% 130.64%

Liquidity ratio 19.69% 11.17% 31.04%

Q1’2021 Financial Year Highlights


Stable & Consistent Performance

421 387489

716

980

FY'16 FY'17 FY'18 FY'19 FY'20

227 216252

289

360

FY'16 FY'17 FY'18 FY'19 FY'20

283 254

369

577

805

FY'16 FY'17 FY'18 FY'19 FY'20

45.79

65.2771.53

94.89

81.38

FY'16 FY'17 FY'18 FY'19 FY'20

Gross Earnings (N’bn) Customer Deposits (N’bn)

Total Assets (N’bn) Net Loans & Advances (N’bn)


2021 Outlook & Strategy

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Focus will be on economic expansion and curtailing inflationary pressures

Economic Outlook

Inflation –

• Inflation inched above 18.1% in March

2021. This will further exacerbate

issues with consumer buying power.

• Prices will continue to rise in 2021.

Oil Prices, Production–

• Despite the increase in crude oil prices,

Nigeria isn’t producing or selling enough

crude to plug revenue shortfalls and grow

foreign reserves significantly.

Exchange Rate Policy, External

Reserves and Capital Flows –

• We are seeing an increasing

divergence of the forex rates and

the likely devaluation of the Naira.

This will continue all year.

Interest Rates –

• Moving past the low rates of Q1 2021,

we expect to see an upward trend

over the rest of the year as the CBN &

FG start to position to attract external

& domestic funding.

Trade –

• We expect improvements in foreign trade

figures, as demand conditions improve across

the globe.

• Foreign investment inflows will be higher than

the US$9.7 billion recorded in 2020 but below

the pre-COVID-19 level of US$24 billion.

Security -

• The significant insecurity issues

across the country will continue to

heighten all year in the run up to

the 2023 elections.

The need to drive growth and equally curtail the pace of inflationary pressure will put the CBN in a dilemma to either raise Monetary Policy Rates to curtail inflation or continue to hold MPR low to support growth.

35P r e s e n t a t i o n t o I n v e s t o r s & A n a l y s t s – 2 0 2 0 F u l l Y e a r R e s u l t s Source: Overview of the World Economic Outlook Projections

-7.0

-1.8 -1.9

-9.9-8.2

2.3

-4.9-3.5 -3.3

2020

2021

2022

Most of the large economies will return to growth in 2021, which will help drag other economies along.

Economic Outlook

3.1 2.53.4

5.3 5.8

8.4

3.6

6.4 6.0

2.0 2.3

4.0

5.14.2

5.6

3.4 3.54.4


We have set our aspiration to becomethe Dominant Digital Banking Platform in

Nigeria

Strategic Overview – 2020-2023


37

To become the Most Dominant Digital Banking Platform in Nigeria

Digital Innovation

Optimize the balance sheet, improve

deposit, increase capital to build head room for more asset

creation and strengthen the bank

against shocks

Balance Sheet

Optimization

Customer Growth

& Sales

Optimization

Ecosystem

Development

Customer

Experience

Transformation

Data & Intelligence Talent &

Culture

Back/Middle Office

DigitizationInorganic

Growth

Increase active customer base,

review our value propositions,

reactivate dormant customers, acquire

new customers both traditionally and digitally, leverage analytics, to push

product penetration and alternative

channel migration

Become the bank of choice for fintech and technology start-ups

for technology, business and banking services through an open architecture;

Roll out digital offerings to the African Market

To become a market leader in

customer experience and service delivery,

build service design capabilities,

revamp existing customer journeys

and rebuild customer support

and issue resolution

architecture

Design and deploy the right architecture and infrastructure to drive the bank’s data

aspirationsDrive the skills and

culture to ensure that data and insights are embedded into the bank’s day to day operations and

engagement with customers

Build world class, highly engaged

workforce with best in class employee

value propositions, recruitment, learning

and performance management

processes; Ensure business

sustainability by building leadership capabilities across the enterprise to

drive strategy execution and culture change

Ensure platform reliability and stability

to prevent revenue losses; aggressively pursue middle and

back-office automation and

digitization to increase efficiency

and reduce associated costs;

drive cost governance and controls across

the enterprise

Actively seek opportunities to acquire viable

fintechs and other small FIs to boost

customer base and transactions;

Explore an opportunity for

M&A with another Commercial Bank

Driving Growth through Digital Capabilities in the long term…..

Strategic Thrust (2020-2023)


Appendix

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Wema Bank Plc

Consolidated and Separate Financial Statements

For the period ended 31st December, 2020

Statement of Profit or loss and other Comprehensive Income

In thousands of Nigerian Naira 12 Months9 Months12 Months 12 Months 12 Months

31-Dec-20 31-Dec-19 31-Dec-20 31-Dec-19

Gross Earnings 81,382,795 94,890,127 79,876,995 93,389,811

Interest income 64,552,522 70,682,043 63,046,722 69,181,727

Interest expense (33,702,510) (44,696,360) (32,189,452) (43,197,658)

Net interest income 30,850,012 25,985,683 30,857,270 25,984,069

Net impairment loss on financial assets (5,635,165) (6,130,600) (5,635,165) (6,130,600)

Net interest income after

impairment charge for credit losses 25,214,847 19,855,083 25,222,105 19,853,469

Net gain on FVTPL investment securities 326,274 234,124 326,274 234,124

Net fee and commission income 8,422,108 7,998,793 8,422,108 7,998,793

Net trading income 3,940,031 14,789,480 3,940,031 14,789,480

Other income 4,141,860 1,185,687 4,141,860 1,185,687

16,830,273 24,208,084 16,830,273 24,208,084

Operating income 42,045,120 44,063,167 42,052,378 44,061,553

Personnel expenses (14,082,228) (14,870,989) (14,082,228) (14,870,989)

Depreciation and amortization (3,136,273) (3,316,846) (3,136,273) (3,316,846)

Other operating expenses (18,894,932) (19,115,311) (18,887,354) (19,102,890)

Profit before tax 5,931,687 6,760,021 5,946,523 6,770,828

Income tax expense (1,354,306) (1,560,080) (1,354,306) (1,560,080)

Profit for the year 4,577,381 5,199,940 4,592,217 5,210,748

BankGroup

Statement Of Profit Or Loss And Other Comprehensive Income


Statement of Financial Position 31 December 2020

Consolidated and Separate Financial Statements

For the period ended 31st December, 2020

Statement of financial Position

31-Dec-20 31-Dec-19 31-Dec-20 31-Dec-19

In thousands of Nigerian Naira

Cash and cash equivalents 97,524,936 65,974,273 97,527,858 65,967,028

Restricted Deposit with CBN 246,974,959 137,392,701 246,974,959 137,392,701

Pledged assets 27,454,662 26,925,527 27,454,662 26,925,527

Investment securities:

Fair value through other comprehensive income 56,580,275 1,793,543 56,581,275 1,794,543

Fair Value through profit or loss 78,225,951 105,164,284 78,225,951 105,164,284

Held at amortised cost 48,992,774 43,142,925 38,052,786 32,234,960

Loans and advances to customers 360,076,079 289,239,870 360,076,079 289,239,870

Investment properties 38,388 39,330 38,388 39,330

Right of Use 621,528 509,963 621,528 509,963

Property and equipment 21,517,323 20,637,634 21,517,323 20,637,634

Intangible assets 1,391,549 974,069 1,391,549 974,069

Other assets 21,883,615 4,879,789 21,883,615 4,879,789

Deferred tax assets 18,236,111 19,195,906 18,236,111 19,195,906

979,518,151 715,869,814 968,582,084 704,955,604

Deposits from banks - 3,638,400 - 3,638,400

Deposits from customers 804,873,392 577,283,469 804,873,392 577,283,469

Lease Liabilities 22,875 72,584 22,875 72,584

Current tax liabilities 394,511 905,364 394,511 905,364

Other liabilities 41,562,149 30,039,084 41,522,098 29,996,610

Other borrowed funds 73,523,471 48,770,306 62,416,375 37,702,326

920,376,398 660,709,207 909,229,251 649,598,753

EQUITY

Share capital 19,287,233 19,287,233 19,287,233 19,287,233

Share premium 8,698,230 8,698,230 8,698,230 8,698,230

Regulatory risk reserve 5,536,119 7,577,698 5,536,119 7,577,698

Retained earnings 7,103,647 3,254,018 7,314,727 3,450,262

Other reserves 18,516,524 16,343,427 18,516,524 16,343,427

EQUITY ATTRIBUTABLE TO 59,141,754 55,160,607 59,352,833 55,356,851

EQUITY HOLDERS OF THE BANK

TOTAL LIABILITIES AND EQUITY 979,518,152 715,869,813 968,582,084 704,955,604

Group Bank


Consumer Lending

RETAIL BANKING

DEPOSIT LOANS PBT

2.54 million+Customers

Retail Focused Customer Base

₦194.59billionDeposits

₦29.96billionLoans

₦1.13billionPBT

24% 8% 19%

Large corporates, Multinationals, Energy, Telecoms, Maritime etc.

CORPORATE BANKING

DEPOSIT LOANS PBT

450+Customers

₦500m +Turnover



₦2.48billionPBT

41% 43% 42%

Streamlined products that provides for the heartbeat of the Nigerian Economy

SMALL AND MEDIUM SCALE ENTERPRISES

DEPOSIT LOANS PBT

78,000+Customers

under ₦250mTurnover


₦5.84billionLoans

₦0.51billionPBT

3% 2% 9%

All Government Parastatals

PUBLIC SECTOR

DEPOSIT LOANS PBT

Federal, State and Local Governments

Ministries, Departments & Agencies



₦0.64billionPBT

6% 6% 11%

Curated Products for Mid Size Companies

COMMERCIAL BANKING

DEPOSIT LOANS PBT

300+Customers

₦250- 500mTurnover



₦1.19billionPBT

26% 41% 20%Business Segmentation


Slight changes on the Board……

Ademola AdebiseManaging Director/CEO

Abubakar LawalNon-Executive Director

Omobosola Ojo

Independent Non-Executive

Moruf OseniDeputy Managing Director

Wole AkinleyeExecutive Director

Abolanle Matel-OkohNon-Executive Director

Babatunde KasaliChairman

Adebode AdefioyeNon-Executive Director

Folake SanuExecutive Director

Samuel DurojayeNon-Executive Director

Ajimisinmi Oluwole Executive Director

Ibiye EkongIndependent Non-Executive

www.wemabank.com

• With effect from August 2020,

Tina Vukor Quashie

(TVQ) an independent Non-

Executive Director, resigned

from the services of the bank.

• Another Independent Non-

Executive Director, Mrs. Ibiye

Ekong was appointed.

• With effect from July 2020, Mr.

Oluwole Ajimisinmi was

appointed as an Executive

Director. Prior to the role, he

was the Company Secretary &

Legal Adviser of the bank for 9

years. He has over 25 years of

cognate experience with more

than 15 years at Senior to

Executive Management.


• This presentation contains or incorporates by reference “forward-looking statements” regarding the belief or currentexpectations of Wema Bank Plc, the Directors and other members of its senior management about the Bank’s businessesand the transactions described in this presentation. Generally, words such as ‘‘could’’, ‘‘will’’, ‘‘expect’’, ‘‘intend’’, ‘‘anticipate’’,‘‘believe’’, ‘‘plan’’, ‘‘seek’’ or similar expressions identify forward-looking statements.

• These forward-looking statements are not guarantees of future performance. Rather, they are based on current views andassumptions and involve known and unknown risks, uncertainties and other factors, many of which are outside the controlof the Bank and are difficult to predict, that may cause actual results to differ materially from any future results ordevelopments expressed or implied from the forward-looking statements. Such risks and uncertainties include, but are notlimited to, regulatory developments, competitive conditions, technological developments and general economic conditions.The Bank assumes no responsibility to update any of the forward-looking statements contained in this presentation.

• Any forward-looking statement contained in this presentation, based on past or current trends and/or activities of WemaBank should not be taken as a representation that such trends or activities will continue in the future. No statement in thispresentation is intended to be a profit forecast or to imply that the earnings of the Bank for the current year or future yearswill necessarily match or exceed the historical or published earnings of the Bank. Each forward-looking statement speaksonly as of the date of the particular statement. Wema Bank expressly disclaims any obligation or undertaking to releasepublicly any updates or revisions to any forward-looking statements contained herein to reflect any change in Wema Bank’sexpectations with regard thereto or any change in events, conditions or circumstances on which any such statement isbased.

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Forward Looking Statements

Cautionary Note Regarding

After COVID - 19 What Next? 44

THANK YOU

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After COVID - 19 What Next? 45

Q & A

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fy2020 results

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