Dipo Olowookere
By Dipo Olowookere
In the 2022 fiscal year, the share price of Wema Bank Plc astronomically surged by 141.7 per cent to N3.90 per unit from 72 Kobo per unit on the back of anticipated increased profitability.
According to a report by Nairametrics, this put the mid-level lender as the best-performing equity on the Nigerian Exchange (NGX) Limited in the year under review.
Business Post reports that in the first quarter of last year, Wema Bank embarked on a share reconstruction programme, which involved merging every three of its shares into one to reduce the issued and fully-paid shares from 38,574,466,082 units to 12,858,155,360 units.
The idea was to provide an opportunity for the bank to boost its capital base to keep it competitive, especially in view of the proposed Basel III-compliant regulatory environment.
The financial institution also modernised its operations and improved its innovative products, which helped its financial performance in the year, triggering the interest of investors in the company as they increased their portfolios with more Wema Bank stocks.
For example, in the first half of the year, despite inflationary pressures, high energy costs, foreign exchange (FX) crisis and others, Wema Bank impressed its shareholders with a 43 per cent increase in its pre-tax profit to N6.13 billion from N4.30 billion, as gross earnings rose by 50 per cent to N59.6 billion from N39.8 billion, with interest income jumping by 55 per cent from N32.2 billion to N49.8 billion and the non-interest income expanding by 29 per cent to N9.9 billion from N7.6 billion.
In the third quarter results of the lender, the gross earnings went up by 51 per cent, while the post-tax profit climbed higher by 31 per cent, fuelling more interest in the stocks in expectation of higher cash rewards in the 2022 accounting year.
However, shareholders would have to wait till about the end of the first quarter of 2023 for the release of the audited financial statements of Wema Bank to know the amount of the dividend the board would propose this time. In 2021, 24 Kobo was paid as a final dividend.
As earlier stated, after many years of dividend freezes, the bank has resumed dividend payments to shareholders in the last three years.
