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Wema Bank Reports 32% Surge in Operating Expenses

Depositors’ funds at risk as Wema Bank reports N1.13bn fraud amid weak system

Wema Bank Plc, one Nigeria’s Commercial banks, under the leadership of Moruf Oseni, has recorded a 32 percent increase in its operating expenses to N78bn in 2023, from N59bn in the year 2022.

The bank’s audited financial result for the year ended December 31st, 2023 as revealed.

According to investopedia.com, an operating expense is an expense that a business incurs through its normal business operations. It includes rent, equipment, inventory costs, and funds allocated for research development, among others.

Although the bank saw its deposits grow by 59.65 per cent to N1.86tn in 2023 from N1.16tn in the previous year.

According to the lender’s full-year 2023, audited financial statement filed with the Nigerian Exchange Limited, its profit before tax improved by 196 per cent to N43.59bn from N14.75bn in 2022, and return on equity stood at 39.28 per cent.

This substantial rise in expenses could raise concerns about the bank’s long-term profitability, even though profits before tax grew by 196% to N43.59 billion, and deposits increased by 59.65% to N1.86 trillion.

The significant increase in expenses could potentially eat away at future profits if not addressed.

While the bank highlights its achievements, investors may be wary of the ballooning operating costs.

Wema Bank will need to explain how it plans to control these expenses to ensure sustainable growth and shareholder returns.

Meanwhile, all efforts to get the details and specifics of the skyrocketing spike in the operating expenses of the bank was abortive, as all efforts by our correspondent to get through Mr. Femi Akinfolarin the bank’s head, Strategy & Investor Relations were abortive.

 

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