A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 11
Our Core Value 2
Vision & Mission Statement 3
Notice of 2009 Annual General Meeting 4
Chairman’s Statement 5-8
The Group Managing Director/CEO’s Report 9-11
Board of Directors & Management Team 12-15
Report on Corporate Governance 16-18
Directors’ Report 19-22 Profile of the Bank 23
Statement of Directors’ Responsibilities 24
Report of the Audit Committee 25
Independent Auditors’ Report 26
Statement of Accounting Policies 27-36
Consolidated Balance Sheet 38
Consolidated Profit and Loss Account 39
Statement of Cash Flows 40
Notes to the Consolidated Financial Statements 41-80
Financial Risk Management 81-102
Value Added Statements 103-104
Four Period Financial Summary 105
Five Period Financial Summary 106
Shareholders’ Bulletin 107-109
Network of Regional Offices & Branches 110-124
List of Correspondent Banks 125
Proxy Form 127
C o n t e n t s
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 22
Mutual Respect
Teamwork
Result Orientation
Innovation
Professionalism
Our core values
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 33
Vision“To be the financial institution
of choice in service delivery
and superior returns”
Vision“To be the financial institution
of choice in service delivery
and superior returns”
Vision“To be the financial institution
of choice in service delivery
and superior returns”
Mission“To give every customer a delightful
and memorable service experience”
Vision & Mission Statement
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 4
Notice of 2009 Annual General meeting
NOTICE IS HEREBY GIVEN that the 21st Annual General Meeting of Wema Bank Plc will be held at The Lagoon Restaurant, Ozumba Mbadiwe Avenue, Victoria Island, Lagos on Friday, June 11, 2010 at 11:00am to transact the following businesses:
Ordinary Business1. To lay before the meeting the Audited Financial Statements for the 9-month period ended December 31, 2009 together with the reports of the Directors, Auditors and Audit Committee thereon;
2. To elect/re-elect Directors;
3. To approve the Remuneration of Directors;
4. To appoint External Auditors to the Bank;
5. To authorize the Directors to fix the remuneration of the Auditors;
6. To elect members of the Audit Committee.
Special Business7. To consider and if thought fit, pass the following resolutions as special resolutions: (A) Pursuant to Article 8 of the Bank's Articles of Association, that the shareholders authorize the Directors to raise such sum as Would enable the Bank meet the capital requirement for a Regional Banking Licence by way of Special Placement Offer from Selected Strategic Investors at a price to be determined, subject to obtaining the approvals of relevant regulatory authorities, including but not limited to the Central Bank of Nigeria, the Securities and Exchange Commission and Nigerian Stock Exchange. (B) To authorize the Directors to take and implement such measures as shall be required for the Bank to fully comply with the June 30, 2010 recapitalization deadline set by the Central Bank of Nigeria (CBN) and obtaining a Regional Banking Licence under the proposed new Licencing regime of the Central Bank of Nigeria and the restructuring (either by merger, business combination, acquisition, take over, etc) of its subsidiaries and related companies, entities, subject to the approval of the Relevant regulatory authorities.
Note: ProxyA member entitled to attend and vote at the General Meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy need not be a member of the Bank.
A proxy form is supplied with the Notice and if it is to be valid for the purpose of the meeting, it must be completed and deposited at the office of the Registrars not less than 48 hours before the time fixed for the Annual General Meeting.
Closure of Register and Transfer BooksThe Register of Members and Transfer Books will be closed between Wednesday, May 26 and Tuesday, June 1, 2010 both dates inclusive for the purpose of preparing an up-to-date Register.
Audit CommitteeAll nominations of members for appointment to the Audit Committee should reach the Company Secretary at least 21 days before the Annual General Meeting.
Unclaimed Share Certificates and Dividend WarrantsThe Bank is holding some share certificates and dividend warrants which were returned from the Post Office as unclaimed.
Shareholders who have not received their certificates or dividend warrants are advised to contact the Registrar, Wema Registrars ndLimited, A. G. Leventis Building, 2 Floor, 42/43, Marina, Lagos.
BY THE ORDER OF THE BOARD
Wole AjimisinmiCompany Secretary54, Marina,Lagos.
thDated the 24 day of May, 2010.
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 55
Chairman's Statement
“The bank witnessed a significant improvement in financial results borne out of our mission to reposition
Wema Bank. The Bank's gross earnings rose to N16.27 billion (for the 9-month period to December 2009)
compared with a gross income of N12.9 billion for the 12-month period to March 2009.”
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 66
Chairman’s Statement cont’d
Fellow Shareholders, Invited Guests, Gentlemen of the Press,
Distinguished Ladies and Gentlemen, I am very pleased to
welcome you all to the 21st Annual General Meeting (AGM) of
Wema Bank Plc. I am also honoured to present to you the
Annual Report and Financial Statements for the 9-month
period ended December 31, 2009.
In compliance with the directives of the Central Bank of Nigeria
to institute a uniform financial year end for all deposit money
banks, Wema Bank's new financial reporting year will run as
twelve calendar months ending December 31 every year. As a
result, the report I will present to you is for the nine months
leading up to December 31, 2009.
As a precursor to the financial report, it is necessary to do a
review of the economic environment where the Bank
operates, more so with the need to take into consideration the
volatility experienced, globally, in the financial services
industry during the reporting year.
Economic Review
The year 2009 was the most difficult our industry has
experienced in recent times. The contagion effect of the
financial crisis, which started in the developed economies in
the second half of 2007, spread steadily and enveloped
developing economies in 2008. In Nigeria, 2009 saw the near
collapse of the capital market, thus marking the most severe
phase of the crisis. The near collapse of the capital market
triggered a sudden and significant deterioration across
industry sectors with the banking sector being severely
traumatised. Financial services came under extreme stress,
with acute shortage of liquidity, sharp reductions in interbank
lending, and further pressure on the credit market. Equity
markets experienced heavy falls and extreme volatility. These
extraordinary conditions severely impacted deposit money
banks, and Wema Bank was no exception.
In addition to the crisis in the capital market, the nation's
economy was struggling under the weight of a decline in
currency earnings due to the weak earnings from oil, the
mainstay of the economy. The relatively low oil prices, coupled
with a reduction in oil production as a result of the Niger Delta
crisis, saw increasing pressure on foreign exchange rates as
demand for foreign currency outstripped supply. During this
period the average exchange rate of the Naira against the US
dollar depreciated from N 116.02/US$1 in September 2008 to
N 130.75/US$1 in December 2008, and further to
N147.60/US$1 in December 2009.
Government intervention came in the form of a number of
stimulus packages aimed at using fiscal and monetary policies
to reduce the rate of inflation, ensure exchange rate stability
and reduce interest rates. Year on year inflation rate which
stood at 13.0 per cent as at the end of September 2008, closed
the year at 15.10 percent but decelerated to 12.0 percent at
the end of December 2009.
By the second half of 2009, as international crude prices began
to rise, foreign currency receipts improved. Crude prices
increased from an average level of US$41 .12 per barrel in
January 2009, to about US$70.00 per barrel at end-June 2009;
hitting US$80.00 at the close of the year. There was also
improved oil production during the second half of the year due
in part to the relative peace in the Niger Delta region sequel to
the success of the government's amnesty programme. Other
sectors that contributed to the growth of the economy during
the period include agriculture, wholesale and retail trade and
telecommunications.
In Gross Domestic Product (GDP) terms, the economy which
grew at a rate of 5.98 per cent in 2008 (as against a target of
9.8%), achieved a projected figure of 6.90 per cent in 2009 (a
rise of almost one per cent), according to preliminary
estimates from the National Bureau of Statistics, this was
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 77
Chairman’s Statement cont’d
slightly below the 7.50 per cent target for 2009. The growth in
the economy was driven by a number of factors, including
favorable revenue inflow during the second half of 2009.
In response to the deteriorating condition of the Nigerian
banking sector, the Central Bank of Nigeria commenced a
number of banking reform initiatives to improve corporate
governance, protect depositors' funds, ensure transparency
and entrench effective risk management in deposit money
banks. The apex bank also instituted various initiatives to
moderate the cost of borrowing, and unfreeze credit lines in
order to encourage investments in the real sector with the aim
of boosting the economy at large. The CBN adjusted the
Monetary Policy Rate (MPR) and other variables a number of
times during the period under review. MPR was reduced from
8.00 per cent in March 2009 to 6.00 percent in June 2009.
Similarly, the CBN altered the cash reserve ratio (CRR) and the
liquidity ratio, to among other reasons "lubricate the system".
In the capital market, the impact of the global economic
meltdown and developments in the local environment
precipitated a downward movement of all indicators in the
market. The Nigerian Stock Exchange (NSE) All-share Index
(ASI) dropped 33.8 percent to close at 20,827.17 points in the
reporting year.
Business Review
Most matured economies began to show signs of recovery in
the third quarter of 2009, and economies in emerging
markets, including those in Asia, began to exhibit healthier
growth rates, nonetheless, the economic environment in
matured markets remained fragile in 2009, with high levels of
unemployment and continued reliance on the external
stimulus measures taken by governments around the world in
the wake of the financial crisis.
Despite the challenges of 2009, we delivered a significant
turnaround in our financial indices, and strategically, we laid a
firm basis for success in the post-crisis era.
The bank witnessed a significant improvement in financial
results borne out of our mission to reposition Wema Bank. The
Bank's gross earnings rose to N16.27 billion (for the 9-month
period to December 2009) compared with a gross income of
N12.9 billion for the 12-month period to March 2009. In similar
vein, the group's gross income rose to N18.99 billion against
N16.55 billion respectively. The Bank posted a loss after tax of
N2.09 billion in the period under review compared with a loss
of N19.43 billion in the 12-month period to March 2009. A
close look at the accounts reveals the improvement in the
bank's net interest income despite rising operating expenses.
While a significant boost to the performance came from
recovery of lost assets, we expect this improved performance
to be sustained as the assets are subsequently re-deployed
profitably.
The Group's consolidated accounts show a loss after tax of
N7.53 billion largely attributable to the absorption of
significant write-downs and trading losses from legacy
positions impacted by the financial crisis in our subsidiaries. In
absorbing these losses, your bank has disseminated its
corporate governance ethos to its subsidiaries and proven that
the new management team did more with less, by delivering
substantial profitability with a significantly lower inherited
balance sheet.
Our success is a result of re-orienting our sales and trading
platform towards liquid, customer-driven 'flow' businesses.
We have aligned our compensation plan more closely to the
creation of sustainable value for shareholders. The rigour and
discipline of this plan has been confirmed by our decision to
invest in technology to drive this ambition. We are strongly
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 88
Chairman’s Statement cont’d
committed to a compensation plan which rewards and retains
top talents in the service of shareholders, but which is
performance-oriented and responsible.
Looking ahead, we see challenges and opportunities.
Economic recovery remains fragile, therefore the provision of
economic and fiscal stimulus from the Federal Government
and the Central Bank of Nigeria remain important factors in the
post-crisis environment. Wema Bank is well positioned not
only to weather the challenges but also to seize nascent
opportunities as they emerge. We have moved swiftly and
decisively to reposition our business, acquire strategic
leverage through targeted investments, which demonstrate
profitability, capital strength and risk discipline. Our strategy is
clear and we have the resources required to deliver.
The Board and Management team understand that our
long-term success lies in the delivery of outstanding
service to our customers. We will continue to invest in
the skills and development of our uniquely diverse
employee base, and create for them an environment of
true meritocracy.
We will continue to strive to deliver sustainable value for
you, our shareholders. Thank you for your loyalty and
support as always.
Chief Samuel Olaniyi Bolarinde
Chairman
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 99
The Group Managing Director/CEO’S Report
“Our overarching ambition continues to be to embed quality into the service delivered to all our
customers, as well as throughout the organizational culture. We will focus on cost optimization and
continue to improve infrastructural efficiency.”
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 10
The Group Managing Director/CEO’s Report
Executive summary
The Group's performance in the period under review is both a
reflection of the challenging environment and the fortitude of
Wema Bank as an institution.
The Bank turned a corner during the period as is evident in the
growth in gross earnings. The bank also improved its net interest
margin by moderating the cost of funds while improving interest
income. Operating expenses rose on the back of increasing costs
however significant recoveries of hitherto lost assets ensured
that the bottom line, albeit a loss, improved significantly over
prior period performance.
The results before you today show the position of the bank after
absorbing all recommended loan loss provisions as mandated by
the Central Bank of Nigeria and our External Auditors. In a sense
the cleansing of the loan book provides us the opportunity to
start afresh building a portfolio of well structured and
performing assets. In absorbing the loan losses, there has been
significant diminution in Shareholders' Funds and as such the
Central Bank of Nigeria has mandated the Bank to recapitalize in
order to meet the minimum requirement for operating as a
Bank.
Human Resource
In repositioning the Bank, we believe, that our employees are
our greatest assets, consequently, we have begun the arduous
task of retooling our workforce to meet the challenges of today's
banking terrain. While we have attracted some of the best hands
in the industry in order to draw on their experience and skill, we
have also revamped our training school to provide qualitative
skills to our entry-level employees.
We have realigned the workforce to ensure core banking
services are rendered by employees of the bank while
outsourcing non-core functions. This realignment will ensure
that we remain focussed on what is most important for us;
delivering excellent banking services to our customers.
Today, our workforce is buzzing with new energy and ideas, all
with one purpose in mind, to serve the customer better.
Service Quality
In achieving our ultimate objective of rebuilding the Bank, we
have started with the most important of the building blocks,
Service.
A dedicated Service Quality Management (SQM) team oversees
service delivery and customer satisfaction across the entire
customer touch-points in the Bank. Our aim is to make service
the hallmark of our offerings as enunciated in our mission and
vision. Our SQM team uses a variety of methods, including
mystery shopping to ensure service quality is maintained and I
am happy to note that we have customer testimonials to
confirm improvements in this regard. We know that with
increasing customer satisfaction repeat business will come and
thus our margins will improve. Quality Service is the Ace.
While customers need to experience our service to feel the
difference, we are happy that improvements in our ambience
can be seen from without. The Bank has embarked on a
determined renovation of its facilities and business offices. Our
aim is to ensure that the look and feel of our branches enhance
the comfort our customers' experience when doing business
with us.
(Service Delivery Model Redesign/Business Process
Improvement)
Alongside human resource transformation, service quality
management and infrastructural renovation, we have also
embarked on a redesign of our service delivery model and our
business processes.
Key changes to our business processes have changed the way
we interact with and serve our customers. Leveraging on
technology we are able to deliver continual service
improvement and ensure that service quality within the
organisation is monitored, measured and improved. We believe
that technology that correctly underpins and enables Continual
Service Improvement is fundamental in gaining maximum
effectiveness and efficiency from our processes.
The new Service Delivery Model (SDM) is built around the
customer. The SDM leverages on technology while linking
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 11
The Group Managing Director/CEO’s Report cont’d
business process management and business intelligence to put
in place a process that works for the benefit of the customer.
In order to deliver on our promise to render convenient services
to our customers, we have installed Automated Teller Machines
(ATMs) in all our branches located in major commercial centres.
We continue to increase our product offerings through our
alternative channels (online, mobile and card-based banking),
developing robust and practical products that meet the needs of
our customers.
In tandem with our newly defined service delivery model, there
are plans in place to upgrade and optimize the bank's
communication infrastructure using fibre optic solution. This
initiative will speed up automated services within our branch
network, which will result in delivering value faster to our
customers.
Risk Management
I am happy to announce that we are making good progress in
the implementation of a robust enterprise risk management
framework in the bank. Our medium term goal is to have an
automated risk management solution that will fortify existing
procedures and improve on current processes that have been
put in place to manage and control risks in line with the Bank's
risk policies.
Our Remedial Assets Management Group, tasked with the
unenviable assignment of recovering challenged loans has
recorded remarkable achievements in the period under review.
These achievements include recovery of N19.62billion of
delinquent and provisional loans, with a net impact of
N16.27billion on the Bank's Profit and Loss Account for the
period. We salute their efforts.
Recapitalization Update
The outcome of a CBN led examination in 2009 revealed a
negative capital adequacy as well as a weak liquidity position in
the Bank. The CBN mandated the bank to raise its shareholders'
funds to the regulatory minimum (N25billion) by June 2010. As
a result, the Bank has commenced the process of
recapitalization in line with CBN's directive.
Approvals to issue new shares and embark on a special private
placement have been obtained from the Board of Directors and
ratified by shareholders at the last Annual General Meeting of
the Bank. In line with these approvals, management has
opened discussions with a number of prospective investors.
These discussions are at an advanced stage and we are
optimistic that the Bank will achieve the recapitalization
objectives within the stipulated time frame. We are also happy
to note that the significant loan loss recoveries made have
reduced the amount we need to raise to achieve this goal.
Outlook for 2010
Our overarching ambition continues to be to embed quality into
the service delivered to all our customers, as well as throughout
the organizational culture. To reinvigorate our performance
culture, we will focus on cost optimization and continue to
improve infrastructural efficiency. We have significantly
enhanced the way we measure performance, aligning this
more closely with shareholder value.
We will continue to drive capital efficiency, reduce capital
consumption of non-core assets and rigorously assess possible
shareholder returns when evaluating our investments. We will
sustain the aggressive recovery programme which is yielding
very impressive results and cost optimization initiatives will
continue to be implemented to reduce our operating
overheads.
Again we would like to thank our customers and the
Shareholders for your unwavering patience and understanding
over the years, your views and contributions continue to be our
strength and compass.
The future is bright and we count on the continued support of
our customers and you, our shareholders, to deliver value to all
our stakeholders.
Thank you.
Segun Oloketuyi
Group Managing Director/Chief Executive Officer
1
2
3
4
5
6
7
1. Chief Samuel Bolarinde, Chairman
2. Segun Oloketuyi, GMD/CEO
3. Adebode Adefioye, Director
4. Nurudeen Fagbenro, Excutive Director
5. Chief Opeyemi Bademosi, Director
6. Festus Ajani, Director.
7. Ademola Adebise, Executive Director
The board of DIRECTORS
1313
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 1414
BoardSamuel Bolarinde (Chief) - Chairman
Segun Oloketuyi - Group Managing Director/Chief Executive Officer
Festus Ajani - Director
Nurudeen Fagbenro - Executive Director
Adebode Adefioye - Director
Opeyemi Bademosi (Chief) - Director
Ademola Adebise - Executive Director
Board SecretaryWole Ajimisinmi - Company Secretary
ManagementSegun Oloketuyi - Group Managing Director/Chief Executive Officer
Nurudeen Fagbenro - Executive Director
Ademola Adebise - Executive Director
General ManagersKayode Fasola - Regional Executive, South West Business Group
Tope Adebayo - Chief Inspector
Deputy General ManagersAkinlolu Ayileka - Group Head, Retail Banking Group
Wole Akinleye - Regional Executive, Lagos Business Group
Olayinka Oni - Group Head, Information Technology & Operations
Assistant General ManagersFola Ajanlekoko - Head, General Services
Bukola Dada - General Manager, Wema Homes (Savings & Loans) Limited
Wale Farodoye - Head, Branch Operations Co-ordination
Yemi Akingbe - Zonal Manager, Lagos Island Region
Lanre Ajayi - Head, Subsidiaries Co-ordination
Dele Olaolu - Head, Remedial Asset Management Group
Paul Otobrise - Regional Executive, South South/South East Business Group
Taofeek Adeniji - Zonal Manager, Ibadan Region
Board of Directors and Management Team
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 1515
Board of Directors and Management Team cont’d
Professional Advisers & Registered Offices
Secretary & Registered OfficeWole Ajimisinmi
Wema Bank Plc,
Wema Towers,
54, Marina, Lagos.
Registrar & Transfer Office Osabiya Jimoh
Wema Registrars Limited,
A.G. Leventis Building,
42/43, Marina, Lagos.
01-7732181, 07028380379
External AuditorsKPMG Professional Services
(Chartered Accountants)
22a, Gerrard Road, Ikoyi, Lagos
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 1616
Report on Corporate Governance
IntroductionWema Bank Plc is committed to good corporate governance practice as a system for managing and supervising a corporation, including its organization, its commercial principles and guidelines as well as all internal and external regulatory and monitoring mechanisms. Effective and transparent corporate governance, guarantees that, the Bank is managed in a responsible and value driven manner, towards sustaining the confidence of shareholders, employees, stakeholders and the public in our Bank.
The assurance of public confidence in the financial industry through the enthronement of good corporate governance remains of utmost importance given the role of the industry in the mobilization of funds, the allocation of credit to the deprived sectors of the economy, the payment and settlement system and the implementation of various monetary policies.
It is imperative to note that, the consolidation in this industry poses additional corporate governance challenges, in the areas of integration of processes, culture, ICT and human capital management.
Wema Bank Plc is among the leading banks to recognize the need for full implementation of sound corporate governance practice, as enunciated by CBN Code of Corporate Governance post consolidation 2006 and Securities and Exchange Commission (“SEC”) Code of corporate governance for Nigeria 2003.
Evidently, the current management team which was constituted in June 2009 has, within the six months period, taken steps towards stabilizing and repositioning the Bank and ensuring compliance with corporate governance practices.
Governance structure
The BoardThe board of directors comprises 7 members; 4 non Executive Directors, the Group Managing Director/ Chief Executive Officer (GMD/CEO) and 2 Executive Directors. One of the non Executive Directors chairs the Board. The board was restructured during the period under review.
Role of BoardThe primary purpose of the Board is to provide strategic direction for the Bank in order to deliver long term value to shareholders through its general supervision of the Bank's business.
Other functions of the Board include:
? To review management succession plan and determine their compensation.? To ensure that the Bank operates ethically and complies with applicable laws and regulations.? To approve capital projects and investments.? To consider and approve the annual budget of the Bank, monitor its performance and ensure that the Bank remains a going
concern.? To ensure that adequate system of internal control, financial reporting and compliance are in place. ? To ensure that an effective risk management process exists and is sustained.? To constitute Board Committees and determine their terms of reference and procedures; including reviewing and approving the
reports of these committees.
In furtherance of the above roles, the Board met eleven (11) times during the period under review.
In view of best practice and in accordance with the provision of CBN Code of Corporate Governance, the responsibilities of the Chairman and the GMD/CEO have remained separate.
Board CommitteeThe Board discharges its responsibilities through a number of standing committees with clear terms of reference setting out their roles, responsibilities, powers and reporting procedures to the Board.
The Board committees were restructured in the period and the committees in operation during the period under review are:
? Board Credit Committee? Board Audit Committee? Board General Purpose Committee? Board Risk Management Committee
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 1717
Report on Corporate Governance cont’d
The roles and responsibilities of these committees are discussed below:
Board Credit CommitteeThis committee is responsible for the consideration of loan applications above certain limits which needs to be referred to the Board.
The main functions are:? Approving credit guidelines for strategic plans? Approving credit policy, which includes defining levels and limits of lending authority? Approving all credits in excess of the limits delegated to the Management Credit Committee or Group Managing Director as the
case may be? Approving write off in excess of management limits and within the limits as shall be set by the Board
Audit CommitteeThis was established in compliance with Section 359(3&4) of the Companies and Allied Matters Act of Nigeria (CAMA). The committee consists of three shareholder representatives and three non executive directors. All the members of the committee are independent of the Bank's management. The Committee meets quarterly, with its proceedings regulated by the Audit Charter.Its main functions are:
? Ascertain whether the accounting and reporting policies of the Bank are in accordance with the legal requirements and agreed ethical practices.
? Review the scope and planning of audit requirements.? Review the findings on management matters as reported by the external auditors and departmental responses thereon.? Keep under review the effectiveness of the Bank's system of accounting and internal control.? Make recommendations to the Board in regards to the appointment, removal and remuneration of the external auditor of the
Bank.? Authorise the internal auditor to carry out investigations into any activities of the Bank which may be of interest or concern to
the committee.
General Purpose CommitteeThis committee replaces the previous Establishment Committee which handles staff matters and has now been saddled with more responsibilities in the area of finance and general administrative matters. The main functions are:? To define the strategic business focus and plans of the Bank.? To support management business development efforts.? To define capital expenditure limits and approve all capital expenditure on behalf of the Board.
Board Risk Management CommitteeThe Bank through its Board Risk Management Committee ensures that all risks are identified and properly managed; and shareholders' investments as well as company assets are safeguarded.The internal control system is reviewed regularly to ensure its efficiency and effectiveness.The main functions of the board risk management committee are:? To set out acceptable risk management guidelines? To provide oversight over management's activities in managing credit, market, liquidity, operations, legal and other risks of the
Bank.
Composition of Board Committees
Board of DirectorsChief Samuel Bolarinde (Chairman)Segun Oloketuyi (GMD/ CEO)Nurudeen Fagbenro, Executive Director, Enterprise Risk ManagementAdemola Adebise, Executive Director, Corporate and Investment BankingFestus O AjaniChief Opeyemi BademosiAdebode Adefioye
Board Credit CommitteeFestus O Ajani (Chairman)Segun Oloketuyi (GMD/ CEO)Chief Opeyemi BademosiAdebode AdefioyeNurudeen Fagbenro, Executive Director, Enterprise Risk ManagementAdemola Adebise, Executive Director, Corporate and Investment Banking
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 1818
Report on Corporate Governance cont’d
Board Audit CommitteeMatthew Akinlade - Shareholder (Chairman)Anosikeh Joe, Ogbonna - ShareholderPrince Adekunle Olodun - ShareholderFestus O Ajani - DirectorChief Opeyemi Bademosi - DirectorAdebode Adefioye - Director
Board General Purpose CommitteeAdebode Adefioye - (Chairman)Chief Opeyemi BademosiSegun Oloketuyi (GMD/ CEO)Ademola Adebise, Executive Director, Corporate and Investment Banking
Board Risk Management CommitteeChief Opeyemi Bademosi (Chairman)Festus O Ajani Segun Oloketuyi (GMD/ CEO)Nurudeen Fagbenro, Executive Director, Enterprise Risk Management
Board Meetings
The Bank's Board and committee meetings and members' attendance at these meetings for the 9 months period under review are detailed below:
Names of Directors Meeting
BOD BCC BAC BRMC BGPC
Number of meetings
11
1
-
- -
Samuel Bolarinde
8
-
-
- -
Segun Oloketuyi
8
1
-
- -
Mahmoud Lai Alabi
5
-
-
- -
Festus O. Ajani
11
1
-
- -
Adebode Adefioye
7
1
-
- -
Opeyemi Bademosi
8
1
-
- -
Nurudeen Fagbenro
11
1
-
- -
Ademola Adebise
8
1
-
- -
Taiwo Adeniji
3
-
-
- -Christy N. Okoye 5 - - - -Dauda N. Iliya 5 - - - -
Key
BOD –
Board of Directors' meeting
BCF – Board Credit CommitteeBAC – Board Audit committee BRMC – Board Risk Management Committee BGPC – Board General Purpose Committee
BIODUN HAFFNER & CO(CHARTERED ACCOUNTANTS)Lagos, Nigeria.May 20, 2010
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 19
The directors present their annual report on the affairs of Wema Bank Plc (the “Bank”), and its subsidiaries (the “Group”), together with the Group and Bank audited financial statements and auditors' report for the nine months financial period ended 31 December 2009.
Legal formThe Bank was incorporated in Nigeria under the Companies and Allied Matters Act of Nigeria as a private limited liability company on May 2, 1945 and was converted to a public company in April 1987. The Bank's shares, which are currently quoted on the Nigerian Stock Exchange, were first listed in February 1991. The Bank was issued a universal banking license by the Central Bank of Nigeria on January 2001. Arising from the consolidation in the banking industry, Wema Bank Plc acquired National Bank of Nigeria Plc in December 2005.
Principal activity The principal activity of the Bank is the provision of banking and other financial services to corporate and individual customers. Such services include granting of loans and advances, corporate finance and money market activities.
The Bank has five direct subsidiaries namely Wema Assets Management Limited, Wema Registrars Limited, Wema Insurance Brokers Limited, Wema Homes (Saving & Loans) Limited and Wema Securities and Finance Plc. The Bank also has two indirect subsidiaries; Great Nigeria Insurance Company Plc and Independent Securities Limited. The financial results of these subsidiaries have been consolidated in these financial statements.
Operating results
Highlights of the Group's operating results for the period under review are as follows:
Group Group Bank Bank
Dec 2009 Mar 2009 Dec 2009 Mar 2009
N’000 N’000 N’000 N’000
Gross earnings 18,994,974 16,551,373 16,272,245 12,938,450
Loss before taxation (8,868,199) (28,306,212) (3,309,254) (19,436,874)
Tax (charge)/credit 1,337,901 7,850,756 1,214,562 7,768,466
Loss after taxation (7,530,298) (20,455,456) (2,094,692) (11,668,408)
Non controlling interests 766,864 1,393,413 - -
Loss attributable to equity holders (6,763,434) (19,062,043) (2,094,692) (11,668,408)
Appropriations :
Transfer to statutory reserve - 3,117 - -
Transfer to statutory contingency reserve 43,796 25,109 - -
Transfer to general reserve (6,807,230) (19,090,269) (2,094,692)
11,668,408
(6,763,434) (19,062,043) (2,094,692) (11,668,408)
(Loss)/earnings per share (66)k (189)k (21)k (116)k
Total non performing loans to gross loans 74% 69% 74% 71%
Directors’ Report For the period ended 31 December 2009
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 20
Directors shareholding
The following directors of the Bank held office during the period and had direct interests in the issued share capital of the Bank as recorded in the register of directors shareholding as noted below:
Director Position Date of appointment Number of Ordinary Shares held
Number of Ordinary Shares held
December 2009 March 2009 Chief Samuel Bolarinde Chairman Appointed 10 June, 2009 - - Segun Oloketuyi GMD/CEO Appointed 10 June, 2009 - - Adebode Adefioye Director Appointed 10 June, 2009 - - Chief Opeyemi Bademosi Director Appointed 10 June, 2009 - -
Ademola Adebise Executive Director Appointed 10 June, 2009 - -
Nurudeen Fagbenro Executive Di rector Appointed 13 March, 2006 2,999,955 17,999,955
Festus Ajani Director Appointed 13 March, 2006 2,350,500 1,350,500
Mahmoud Lai Alabi Ag. GMD/CEO Appointed 4 September, 2008 and recalled 10 June, 2009 by CBN
- -
Christy N. Okoye Executive Director Appointed 4 September, 2008 and recalled 10 June, 2009 by CBN
- -
Dauda N. Iliya Executive Director Appointed 4 September, 2008 and recalled 10 June, 2009 by CBN
- -
- -
Directors’ Report cont’d For the period ended 31 December 2009
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 21
Directors’ Report cont’d For the period ended 31 December 2009
Share Range No of Shareholders
Percentage of Shareholders (%)
No. of Holdings Percentage Holdings
1-9,999 207,374 81.07% 521,393,606 5.05%
10,000 – 50,000 37,166 14.53% 732,865,960 7.10%
50,001 – 100,000 5,488 2.15% 393,540,016 3.81%
100,001 – 500,001 4,795 1.87% 924,425,941 8.96%
500,001 – 1,000,000 467 0.18% 335,424,268 3.25%
1,000,001 – 5,000,000 429 0.17% 857,439,281 8.31%
5,000,001 – 10,000,000 37 0.01% 258,526,597 2.50%
10,000,001 – 50,000,000 40 0.02% 926,180,403 8.97%
50,000,001 – 100,000,000 2 0.00% 144,438,021 1.40%
100,000,001 – 500,000,000 4 0.00% 917,606,546 8.89%
500,000,001 – 1,000,000,000 3 0.00% 2,038,103,276 19.75%
1,000,000,001 – 5,000,000,000 1 0.00% 2,270,687,037 22.00%
Foreign Share holders - - - -
Total 255,806 100.00% 10,320,630,952 100.00%
December 2009 March 2009 Shareholder No. of shares held Percentage of
shareholding No. of shares held Percentage of
shareholding SW8 Investment Company Limited
4,027,976,800 39% - -
Odu’a Investment Company Limited
1,032,063,095 10% 1,007,063,095 10%
Donations and charitable gifts
The Bank made contributions to charitable and non-political organizations amounting to N18,611,500 (March 2009:N14,439,992) during the period, as listed below:
N
1. Donation to Ibadan Polytechnic 11,371,500
2. Donation to Federal University of Petroleum 4,990,000
3. Donation to Indian Cultural Association 1,000,000
4. Donation to Bell University of Technology, Ota 500,000
5. Donation to Carol School - Science Exhibition 250,000
6. Gift to Ekiti State Government 250,000
7. Okuku Day celebrations 250,000
Total 18,611,500
Substantial interest in shares
According to the register of members as at 31 December 2009, no shareholder held more than 5% of the issued share capital of the Bank, except the following:
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 22
Directors’ Report contd For the period ended 31 December 2009
Post balance sheet events There were no post balance sheet events which could have a material effect on the state of affairs of the Group as at 31st December 2009 or the financial performance for the period ended on that date that have not been adequately provided for or disclosed.
Human Resources
(i) Employment of disabled personsThe Group continues to maintain a policy of giving fair consideration to application for employment made by disabled persons with due regard to their abilities and aptitudes. The Group's policies prohibit discrimination against disabled persons in the recruitment, training and career development of employees. In the event of members of staff becoming disabled, efforts will be made to ensure that their employment with the Group continues and appropriate training is arranged to ensure that they fit into the Group's working environment.
(ii) Health, safety and welfare at workThe Group enforces strict health and safety rules and practices at the work environment, which are reviewed and tested regularly. In addition, medical facilities are provided for staff and their immediate families at the Group's expense.
Fire prevention and fire-fighting equipment are installed in strategic locations within the Bank's premises.
The Bank operates both Group Personal Accident and Workmen's Compensation Insurance cover for the benefit of its employees. It also operates a contributory pension plan in line with the Pension Reform Act, 2004.
Employee involvement and trainingThe Group ensures, through various fora, that employees are informed on matters concerning them. Formal and informal channels are also employed in communication with employees with an appropriate two-way feedback mechanism.
In accordance with the Group's policy of continuous development, the Group draws up annual training programmes. The programmes include on the job training, classroom sessions and web-based training programmes which are available to all staff.
Auditors KPMG Professional Services have indicated their willingness to continue in office as auditors in accordance with Section 357(2) of the Companies and Allied Matters Act of Nigeria.
BY ORDER OF THE BOARDWole Ajimisinmi,Company Secretary,Wema Bank Plc,Wema Towers,54 Marina,Lagos.May 20, 2010
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 23
Previous NameAgbonmagbe Bank (Incorporated May 2, 1945) RC. 575
Re-Incorporation1969
Stock Exchange ListingFebruary 1991 * First Tier *Banking Group
BusinessUniversal Banking
Head OfficeWema Towers,
54, Marina, Lagos
P.M.B. 12862, Lagos
Tel: 01-2711697, 7406249, 7401341
e-mail: [email protected]
Website: www.wemabank.com
Swift Address: WEMANGLAXXX
Branches:154
Subsidiaries:Wema Capital Limited
Wema Registrars Limited
Wema Insurance Brokers Limited
Wema Securities & Finance Plc
Wema Homes (Savings & Loans) Limited
Authorised Share CapitalN10 Billion (Ordinary Shares of 50k each)
(N5,034,971,587 Paid Up)
Shareholding Structure:Nigerian 100%
Number of Employees1,604 as at December 31, 2009
Board Of DirectorsSamuel Bolarinde - Chairman
Segun Oloketuyi - Group Managing Director/
Chief Executive Officer
Festus Ajani - Director
Nurudeen Fagbenro - Executive Director
Adebode Adefioye - Director
Opeyemi Bademosi - Director
Ademola Adebise - Executive Director
Board SecretaryWole Ajimisinmi
Financial Year Endst31 December
AuditorsKPMG Professional Services (Chartered Accountants)
Media Enquiries ContactTunde Olofintila
Head, Corporate Communications
Tel: 01-2711695(tel. / fax) 0803 787 7802
Profile of the Bank
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 24
In accordance with the provisions of sections 334 and 335 of the Companies and Allied Matters Act and sections 24 and 28 of the Banks and Other Financial Institutions Act, the directors are responsible for the preparation of the annual financial statements which give a true and fair view of the state of affairs of the Group and the Bank at the end of the period and of the financial performance for the period then ended. The responsibilities include ensuring that:
i. the Group keeps proper accounting records that disclose, with reasonable accuracy, the financial position of the Group and which ensure that the financial statements comply with the requirements of the Companies and Allied Matters Act, Banks and Other Financial Institutions Act, Prudential Guidelines, Nigerian Accounting Standards and relevant Circulars issued by the Central Bank of Nigeria;
ii. appropriate and adequate internal controls are established to safeguard the assets of the Group and to prevent and detect fraud and other irregularities;
iii. the Group has used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgements and estimates, and that all applicable accounting standards have been followed; and
iv. it is appropriate for the financial statements to be prepared on a going concern basis unless it is presumed that the Bank and its subsidiaries will not continue in business.
The directors accept responsibility for the annual financial statements, which have been prepared using appropriate accountingpolicies supported by reasonable and prudent judgements and estimates, in conformity with Nigerian Accounting Standards, Prudential Guidelines for Licensed Banks, relevant circulars issued by the Central Bank of Nigeria, the requirements of the Banks and Other Financial Institutions Act; and the requirements of the Companies and Allied Matters Act.
The directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Bank and Group and of its financial performance for the period.
The directors further accept responsibility for the maintenance of accounting records that may be relied upon in the preparation offinancial statements, as well as adequate systems of internal financial control.
Nothing has come to the attention of the directors to indicate that the Group will not remain a going concern for at least twelve months from the date of this statement other than as disclosed in Note 44 to the financial statements.
SIGNED ON BEHALF OF THE BOARD OF DIRECTORS BY:
_______________________ _____________________CHIEF SAMUEL BOLARINDE SEGUN OLOKETUYIChairman Group Managing Director/CEO
May 20, 2010
Statement of Directors' responsibility in relation to the financial statements for the period ended 31 December 2009
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 25
Report of the Audit CommitteeTo the Member of Wema Bank Plc.
In accordance with the provisions of Section 359(6) of the Companies and Allied Matters Act of Nigeria, the members of the Audit Committee of Wema Bank Plc hereby report as follows:
? We have exercised our statutory functions under section 359(6) of the Companies and Allied Matters Act of Nigeria and acknowledge the co-operation of management and staff in the conduct of these responsibilities.
? We are of the opinion that the accounting and reporting policies of the Bank are in agreement with legal requirements and agreed ethical practices and that the scope and planning of both the external and internal audits for the period ended 31 December 2009 were satisfactory and reinforce the Group's internal control systems.
? We are satisfied that the Bank has complied with the provisions of Central Bank of Nigeria Circular BSD/1/2004 dated 18 February 2004 on “Disclosure of insider related credits in the financial statements of banks”. We hereby confirm that an aggregate amount of N15,992,927,000 (March 2009: N45,026,587,000) was outstanding as at 31 December 2009 of which N15,743,280,000 (March 2009: N44,591,155,000) was non performing (See Note 38(b)).
? We have deliberated on the findings of the external auditors who have confirmed that necessary cooperation was received
from management in the course of their statutory audit and we are satisfied with management's responses thereon and with the effectiveness of the Bank's system of accounting and internal control.
Mr. Mathew AkinladeChairman, Audit CommitteeMay 20, 2010
Members of the Audit Committee are:
Matthew Akinlade - Shareholder (Chairman)Anosikeh Joe, Ogbonna - Member
Adekunle Olodun (Prince)
-
Member Festus Ajani
-
Member
Adebode Adefioye
Member Opeyemi Bademosi (Chief) Member
In attendance:Tope Adebayo - Secretary
---
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 26
Independent Auditor’s ReportTo the Member of Wema Bank Plc.
Report on the Financial Statements
We have audited the accompanying financial statements of Wema Bank Plc (“the Bank”) and its subsidiary companies (together “the Group”), which comprise the balance sheets as at 31 December, 2009, and the profit and loss accounts, statements of cash flows and value added statements for the period then ended, and the statement of accounting policies, notes to the financial statements and the five year financial summaries, as set out on pages 27 to 106
.
Directors' Responsibility for the Financial Statements
The directors are responsible for the preparation and fair presentation of these financial statements in accordance with Statements of Accounting Standards applicable in Nigeria and in the manner required by the Companies and Allied Matters Act of Nigeria, the Banks and Other Financial Institutions Act of Nigeria, and relevant Central Bank of Nigeria circulars. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
OpinionIn our opinion, these financial statements give a true and fair view of the financial position of Wema Bank Plc (“the Bank) and its subsidiaries ( together “the Group”) as at 31 December, 2009, and of the Group and Bank's financial performance and cash flows for the period then ended in accordance with Statements of Accounting Standards applicable in Nigeria and in the manner required by the Companies and Allied Matters Act of Nigeria, Banks and Other Financial Institutions Act of Nigeria, and relevant Central Bank of Nigeria circulars.
Emphasis of matterWithout qualifying our opinion, we draw attention to Note 44 to the financial statements which explain the details of the on-going recapitalisation plans of the Bank.
Report on Other Legal and Regulatory Requirements Compliance with the requirements of Schedule 6 of the Companies and Allied Matters Act of Nigeria
In our opinion, proper books of account have been kept by the Bank, so far as appears from our examination of those books and the Bank's balance sheet and profit and loss account are in agreement with the books of accounts.
Compliance with Section 27 (2) of the Banks and Other Financial Institutions Act of Nigeria and Central Bank of Nigeria circular BSD/1/2004
i. The Bank did not pay penalties in respect of contraventions of the provisions of Section 27(2) of the Banks and Other Financial Institution Act of Nigeria during the period.
ii. Related party transactions and balances are disclosed in note 38(b) of the financial statements in compliance with the Central
Bank of Nigeria circular BSD/1/2004.
May20, 2010
Lagos, Nigeria
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 27
Statement of Significant Accounting Policies
A summary of the principal accounting policies, applied consistently throughout the current and preceding periods, is set out below;
except for the waiver of the requirement for a one percent (1%) general provision on performing loans as described in note (e)
below.
(a) Basis of preparation
These financial statements are the consolidated financial statements of Wema Bank Plc and its subsidiaries (hereinafter
collectively referred to as “the Group”). The consolidated financial statements are prepared under the historical cost convention,
modified by the periodic revaluation of fixed assets to approximate market value, and comply with the Statements of
Accounting Standards issued by the Nigerian Accounting Standards Board (NASB).
(i) Reporting period
The Group changed its financial year end from 31 March to 31 December based on the circular BSD/DIR/GEN/CIR/03/017
issued by the Central Bank of Nigeria in respect of a common year end for all banks. These Group financial statements have
therefore been prepared for the nine-month period ended 31 December 2009.
(b) Basis of consolidation
(i) Subsidiaries
Subsidiary undertakings, which are those companies in which the Bank, directly or indirectly, has an interest of more than
half of the voting rights or otherwise has power to exercise control over their operations, have been consolidated. Where
necessary, accounting policies for subsidiaries have been changed to ensure consistency with the policies adopted by the
Bank. Separate disclosure is made for minority interest. Inter-company transactions, balances and unrealized gains on
transactions between Group companies are eliminated. Unrealized losses are also eliminated unless the transaction
provides evidence of the impairment of the asset transferred.
The consolidated financial statements combine the financial statements of Wema Bank Plc (“the Bank”) and its
subsidiaries (“the Group”) wherein there is majority shareholding and/or control of the Board of Directors and
management. The consolidated subsidiaries are Wema Assets Management Limited, Wema Registrars Limited, Wema
Insurance Brokers Limited, Wema Homes Limited, Wema Securities and Finance Plc, Great Nigeria Insurance and
Independent Securities Limited.
(c) Goodwill on consolidation
Goodwill represents the excess of the purchase consideration over the fair value of the Group's share of the separable net assets
of subsidiaries acquired, at the date of the acquisition.
Goodwill is measured at cost less accumulated impairment losses. Goodwill is tested for impairment annually or more
frequently if events or circumstances indicate that it might have been impaired. Impairment losses are recognised in the profit
and loss account in the period in which they arise.
(d) Investment securities
The Group classifies its investments into the following categories: short-term investments, long-term investments and
investments in subsidiaries. Investment securities (short-term and long-term investments) are initially recognized at cost and
classified upon initial recognition. Debt and equity securities intended to be held for a period not exceeding one year or with
tenor to maturity not exceeding one year, and investments held for trading are classified as short-term investments.
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 28
Statement of Significant Accounting Policies
i. Short term investments
Short-term investments are investments held temporarily in place of cash and which can be converted into cash when
current financing needs make such conversion desirable. In addition, such investment is to be held for not more than one
year.
Investments held-for-trading are those investments that the Group acquires principally for the purpose of selling in the
near term, or holds as part of a portfolio that is managed together for short-term profit taking.
Investments held-for-trading and other marketable securities are stated at net realisable value. The gain/loss on
revaluation is credited/charged to profit and loss account during the year/period.
Treasury bills are presented net of unearned discount. Unearned discount is deferred and amortised as earned. Investments
in treasury bills held for trading are carried at net realizable value. Gains or losses resulting from market valuation are
recognised in the profit and loss account.
ii. Long term investments
Long-term investments are investments held over a long period of time to earn income or appreciate in value. Long-term
investments may include debt and equity securities.
Long term investments in marketable securities are stated at the lower of cost and net realizable value.
Interest earned whilst holding investment securities is reported as interest income. Dividends receivable are included
separately in dividend income when a dividend is declared. A change in market value of investment securities is not taken
into account unless it is considered to be permanent.
iii. Investments in subsidiaries
Investments in subsidiaries are carried in the Bank's balance sheet at cost less provisions for impairment losses. Where, in
the opinion of the Directors, there has been impairment in the value of an investment, the loss is recognised as an expense
in the period in which the impairment is identified.
On disposal of an investment, the difference between the net disposal proceeds and the carrying amount is charged or
credited to the profit and loss account.
(e)Loans and advances
Loans and advances are stated net of allowances for bad and doubtful loans. Allowances are determined in accordance with the
Central Bank of Nigeria's Prudential Guidelines for Licensed Banks and the Statement of Accounting Standards for Banks and
Non-Bank Financial institutions (SAS 10) issued by the Nigerian Accounting Standards Board from a specific assessment of each
customer's account as stated below:
Period principal or interest has been outstanding Classification % allowance required
90 days but less than 180days Substandard 10
180days but less than 360days Doubtful 50
Over 360 days Lost 100
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 29
Statement of Significant Accounting Policies
At each balance sheet date, the Bank also assesses whether there are other subjective criteria on loans and advances which may
result in the inability of the customers to meet their obligations based on the original terms of the contracts. Additional provisions as
may be determined by the Bank or the regulators are recognised in the profit and loss account.
Upon classification of a facility as non-performing, interests previously accrued and not received are reversed from earnings and
credited to an interest in suspense account. Future interest charged on the account is credited to the same account until such facilities
becomes performing. Such interest on the performing facilities is recognized as interest income in the profit and loss account.
A minimum of 1% general allowance is made on all loans and advances not specifically provided for. In the current year, the Nigerian
Accounting Standard Board (NASB), via its publication dated 08 February 2010 at the request of the Central Bank of Nigeria (CBN)
granted a waiver for financial statements ended on or before 31 December 2009 of the 1% general provision required by paragraph
55 of “Statement of Accounting Standards SAS 10 on Accounting for Banks and Non-bank financial institutions”. Accordingly, the
Bank did not make a general provision on loans and advances. The general provision brought forward in the Bank from the prior year
has been written back to the profit and loss account (see Note 14(f)).
When a loan in respect of which an allowance has already been made is deemed not collectible, it is written off against the related
provision and subsequent recoveries are credited to the profit and loss account.
Loans in respect of which a previous provision was not made are written off directly to the profit and loss account when they are
deemed to be not collectible.
(f) Leases
The Group classifies a lease as a finance lease if the following conditions are met:
(a) The lease is non-cancelable, and
(b) any of the following is applicable
i. the lease term covers substantially (80% or more) the estimated useful life of the asset or,
ii. the net present value of the lease at its inception using the minimum lease payments and implicit interest rate is
equal to or greater than the fair value of the leased asset or,
iii. the lease has a purchase option which is likely to be exercised.
A lease that does not qualify as a finance lease as specified above is classified as an operating lease.
A Group company can be a lessor or a lessee in either a finance lease or an operating lease.
i. Where a Group Company is the lessor
When assets are held subject to a finance lease, the transactions are recognized in the books of the Group at the net
investments in the lease. Net investment in the lease is the gross investment in the lease discounted at the interest rate
implicit in the lease. The gross investment is the sum of the minimum lease payments plus any residual value payable on
the lease. The discount on lease is defined as the difference between the gross investment and the present value of the
asset under the lease.
The discount is recognized as unearned in the books of the Group and amortized to income over the life of the lease on a
basis that reflects a constant rate of return on the Group's net investment in the lease.
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 30
Statement of Significant Accounting Policies
Finance leases are treated as risk assets and the net investment in the lease are subject to the provisioning policy listed in
note (e) above.
When assets are held subject to an operating lease, the assets are recognized as property and equipment based on the
nature of the asset and the Group's normal depreciation policy for that class of asset applies. Lease income is recognized on
a straight line over the lease term.
All indirect costs associated with the operating lease are charged as incurred to the profit and loss account.
ii. Where a Group Company is the lessee
When the assets leased are subject to operating lease, the total payments made under operating leases are charged to
profit and loss on a systematic basis in line with the time pattern of the Group's benefit.
When the assets are subject to a finance lease, the Group accounts for it by recording the lease as an acquisition of an asset
and the incurrence of a liability.
At the beginning of the lease term, the Group records the initial asset and liability at amounts equal to the fair value of the
leased asset less the present value of any un-guaranteed or partially guaranteed residual value which would accrue to the
lessor at the end of the term of the lease. The discount factor to apply in calculating the present value of the un-guaranteed
residual value accruing to the lessor is the interest rate implicit in the lease.
Where the Group cannot determine the fair value of the leased asset at the inception of the lease or is unable to make a
Reasonable estimate of the residual value of the lease without which the interest rate implicit in the lease could not be
computed, the initial asset and liability are recorded at amounts equal to the present value
The leased asset is depreciated or the rights under the leased asset are amortized in a manner consistent with the Group's
own assets.
The minimum lease payment in respect of each accounting period is allocated between finance charge and the reduction
of the outstanding lease liability. The finance charge is determined by applying the rate implicit in the lease to the
outstanding liability at the beginning of the year.
(g) Property and equipment
All property and equipment are initially stated at cost. They are subsequently stated at historical cost or valuation less
accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the assets.
Subsequent costs are included in the asset's carrying amount or are recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. All other repairs and maintenance are charged to the profit and loss account during the financial period in which they are incurred.
Construction cost in respect of offices is carried at cost as work in progress. On completion of construction, the related amounts are transferred to the appropriate category of property and equipment. Depreciation is calculated on a straight line basis to write down the cost of property and equipment to their residual values over Their estimated useful lives as follows:
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 31
Statement of Significant Accounting Policies
Leasehold Properties - Over the lease
period
Freehold properties - 2%
Leasehold improvements - 10%
Furniture and fittings - 20%
Equipment and machinery - 20%
Computer software and equipments - 20%
Motor vehicles - 25%
Capital work-in-progress which represents fixed assets under construction is not depreciated.
Assets that are subject to depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An asset's carrying amount is written down immediately to its recoverable amount if the
asset's carrying amount is greater than its estimated recoverable amount. The recoverable amount is the higher of the asset's value
less costs to sell or the value in use.
Gains and losses on disposal are determined by comparing proceeds with carrying amount. Gains and losses are included in the
profit and loss account for the period.
(h) Investment propertyAn Investment Property is an investment in land or buildings held primarily for generating income or capital appreciation and
not occupied substantially for use in the operations of the enterprise. A piece of property is treated as an investment property if it
is not occupied substantially for use in the operations of the Group. An occupation of more than 15% of the property is considered
substantial.
Investment properties are carried in the balance sheet at their market value and revalued periodically on a systematic basis at
least once in every three years. Investment properties are not subject to periodic charge for depreciation.
When there has been a decline in value of an investment property, the carrying amount of the property is written down to
recognize the loss. Such a reduction is charged to the profit and loss account. Reductions in carrying amount are reversed when
there is an increase, following a revaluation in accordance with the Group's policy, in the value of the investment property, or if
the reasons for the reduction no longer exist.
An increase in carrying amount arising from the revaluation of investment property is credited to equity as revaluation surplus.
To the extent that a decrease in carrying amount offsets a previous increase, for the same property that has been credited to
revaluation surplus and not subsequently reversed or utilized, it is charged against that revaluation surplus rather than the profit
and loss account.
An increase on revaluation which is directly related to a previous decrease in carrying amount for the same property that was
charged to the profit and loss account, is credited to profit and loss account to the extent that it offsets the previously recorded
decrease.
Investment properties are disclosed separate from the property and equipment used for the purposes of the business.
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 32
Statement of Significant Accounting Policies
(i) Taxation
Income tax expenses / credits are recognised in the profit and loss account. Current income tax is the expected tax payable on
the taxable income for the year, using statutory tax rates at the balance sheet date.
(j) Deferred taxation
Deferred taxation, which arises from timing differences in the recognition of items for accounting and tax purposes, is calculated
using the liability method. Deferred taxation is fully provided for on timing differences, which are expected to reverse at the rate
of tax likely to be in force at the time of reversal. Currently enacted tax rates are used to determine deferred income tax.
A deferred tax asset is recognised to the extent that it is probable that future taxable profit will be available against which the
associated unused tax losses and deductible temporary differences can be utilised. Deferred tax assets are reduced to the extent
That it is no longer possible that the related tax benefit will be realised.
(k) Income recognition
(I) Interest income is recognised on an accrual basis and credited to income only when it has been irrevocably earned.
Interest overdue for more than 90 days is suspended and recognised on a cash basis only.
(ii) Credit related fees are deferred and amortized over the life of the related facility where they constitute 10% or more of the
projected average annual yield of the facility, otherwise such fees are credited to the profit and loss account at the time the
credit is granted.
(iii) Non-credit related fee income is recognised at the time the service or the related transactions are considered substantially
completed.
(iv) Investment income is recognized on an accrual basis and credited to the profit and loss account. Gains and losses on
investment securities are recognised in the profit and loss account upon the sale of the securities.
(v) Commissions and fees, where material are amortised over the life of the related service. Otherwise, commissions and fees
charged to customers for services rendered are recognized at the time the services or transactions are completed.
(vi) Dividend income is recognized when the right to receive payment is established.
(vii) Income arising on investments held by the life business is recognized in the life fund whilst income derived from
investments held by the general business is credited to the profit and loss account.
(l) Foreign currency items
i. Reporting currency
The consolidated financial statements are presented in Nigerian Naira, which is the Group's reporting currency.
ii. Transactions and balances
Transactions denominated in foreign currencies are translated into Naira at the rates of exchange ruling at the date of each
transaction (or where appropriate the rate of the related forward contracts). Monetary assets and liabilities denominated
in foreign currencies are reported at the rates of exchange prevailing at the balance sheet date. Any gain or loss arising
from a change in exchange rates subsequent to the date of the transaction is included in the profit and loss account.
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 33
Statement of Significant Accounting Policies
(m) Retirement benefits
Pension costs
The Group operates a funded, defined contribution pension scheme for employees in Nigeria. Obligations in respect of the
Group's contributions to the scheme are recognised as an expense in the profit and loss account on an annual basis.
(n) Off Balance sheet transactions/contingent liabilities and contingent assets
A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the
occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group or the Group has
a present obligation as a result of past events which is not recognised because it is not probable that an outflow of resources will
be required to settle the obligation; or the amount cannot be reliably estimated.
Contingent liabilities normally comprise of legal claims under arbitration or court process in respect of which a liability is not
likely to crystallise.
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence
or non-occurrence of one or more uncertain future events not wholly within the control of the Group.
Contingent assets are never recognised rather they are disclosed in the financial statements when they arise.
Transactions to which there are no direct balance sheet risks to the Group are reported and accounted for as off balance sheet
transactions and comprise:
Guarantees and performance bonds
The Bank provides financial guarantees and bonds to third parties on the request of customers in form of bid and performance
bonds or advance payment guarantees. These agreements have fixed limits and generally do not extend beyond the period
stated in each contract.
The amounts reflected in the financial statements for bonds and guarantees represent the maximum accounting loss that would
be recognized at the balance sheet dates if counterparties failed completely to perform as contracted.
Letters of credit
The Bank provides letters of credit to guarantee the performance of customers to third parties. Confirmed letters of credit for
which the customer has not provided cash cover are reported off balance sheet.
(o) Cash and cash equivalents
Cash and cash equivalents comprises cash and balances with CBN, balances due from other banks and treasury bills.
(i) Cash and balance with CBN
Cash comprises cash on hand, demand deposits denominated in Naira and foreign currencies and cash balances with the
Central Bank of Nigeria (CBN). Cash equivalents are short-term, highly liquid instruments which are:
- readily convertible into cash, whether in local or foreign currency; and
- so near to their maturity dates as to present insignificant risk of changes in value as a result of changes in interest rates.
(ii) Due from other banks
Due from other banks represents cash held in other banks in Nigeria and banks outside Nigeria.
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 34
Statement of Significant Accounting Policies
(P) Sale of loans or securities
A sale of loans or securities without recourse to the Group is accounted for as a disposal and the assets excluded from the balance
sheet.
Profits or losses on sale of loans or securities without recourse to the Group are recognised by the Group when the transaction is
completed.
The Group regards a sale of loans or securities as without recourse, if it satisfies all the following conditions. Any sale not
satisfying these conditions will be regarded as with recourse.
(i) control over the economic benefits of the asset must be passed on to the buyer;
(ii) the seller can reasonably estimate any outstanding cost; and
(iii) there must not be any repurchase obligations
A sale or transfer of loans or securities with recourse where there is an obligation to, or an assumption of, repurchase is not
treated as a sale, and the asset remains on the Group's balance sheet, with any related cash received recognised as a liability.
Profit arising from sale or transfer of loan or securities with recourse to the seller is amortised over the remaining life. However,
losses are recognised as soon as they can be reasonably estimated.
(q) Earnings per share
The Group presents basic earnings per share for its ordinary shares. Basic earnings per share are calculated by dividing the profit
or loss attributable to ordinary shareholders of the Group by the weighted number of ordinary shares outstanding during the
year.
Adjusted earnings per share is determined by dividing the profit or loss attributable to ordinary shareholders by the weighted
number of ordinary shares adjusted for any bonus shares issued.
(r) Provisions
A provision is recognised if, as a result of a past event, the Bank has a present legal or constructive obligation that can be
estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
(s) Segment reporting
A segment is a distinguishable component of the Group that is engaged in providing products or services (business segment), or
in providing products or services within a particular economic environment (geographical segment), which is subject to risks
and rewards that are different from those other segments.
Segment information is presented in respect of the Group's business segments. The Group's primary format for segment
reporting is based on business segments. The business segments are determined by management based on the Group's
internal reporting structure. Segment results, assets and liabilities include items directly attributable to a segment as well as
those that can be allocated on a reasonable basis.
(t) Dividends
Dividends on ordinary shares are appropriated from retained earnings and recognised as a liability
in the period in which they are declared. Dividends that are proposed but not yet declared are
disclosed in the notes to the financial statements.
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 35
Statement of Significant Accounting Policies
(u) Other assets
Prepayments, receivables and other sundry debit balances are classified as other assets and are stated at cost net of allowances
for amounts doubtful of recovery.
Allowances for doubtful accounts are made in line with the provisions of the CBN Prudential Guidelines for receivables whose
collection has been identified by management as doubtful. When a receivable is deemed not collectible, it is written off against
the related allowance and subsequent recoveries are credited to the profit and loss account.
(v) Ordinary share capital
Share issue costs
Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the
proceeds.
(w) Deposit Administration
Receipts for deposit administration and other business of saving natures are recognized as liabilities. Interest accruing from
investment of the savings is recognized in the profit and loss account in the period it is earned while interest paid and due to
depositors is recognized as an expense.
(x) Outstanding claims and provisions
Full provision is made for the estimated cost of all claims notified but not settled at the date of the balance sheet, less
reinsurance recoveries, using the best information available at that time.
In non-life insurance business, a provision is also made for the cost of claims incurred but not reported (IBNR) as at the balance
sheet date on the basis of 10% of claims notified but not settled in compliance with the provisions of section 20(1) (b) of the
Insurance Act, 2003.
Similarly provisions are made for “unallocated claims expenses” being the estimated administrative expenses that will be
incurred after the balance sheet date in settling all claims outstanding at that date, including IBNR. Differences between
provisions for outstanding claims at a balance sheet date and the subsequent settlement are included in the Revenue Account of
the following year.
(y)Underwriting profits
The Group conducts life assurance and non life insurance business through its insurance subsidiary. The Group offers a full range
of insurance underwriting services.
i. Underwriting profits for non-life insurance business
The underwriting profits for non-life insurance business are determined on an annual basis whereby the incurred costs of
claims, commission and related expenses are charged against the earned proportion of premiums, net of reinsurance, as
follow:
- Premium written related to risks assumed during the year, and include estimates of premium due but not yet
received, less an allowance for cancellation.
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 36
Statement of Significant Accounting Policies
- Unearned premiums represent the proportion of the premiums written in periods up to the accounting date which relate
to the unexpired terms of policies in force at the balance sheet date, and are calculated on the basis of time
apportionment.
- Claims paid represent all payments made during the year, whether arising from events during that or earlier years.
Outstanding claims represent the estimated ultimate cost of settling all claims arising from incidents occurring prior to
the balance sheet date, but not settled at that date. Outstanding claims are computed on the basis of best information
available at the time the records for the year are closed, and include provisions for claims incurred but not reported
(“IBNR”).
- Provisions for unexpired risks are the estimated amounts required over and above provisions for unearned premiums to
meet future claims and related expenses on business in force at the end of the accounting period.
- Expenses are allocated to the relevant revenue accounts as incurred in the management of each class of business.
ii. Underwriting profits for life assurance business The underwriting profits for life assurance business are determined on a fund accounting basis. The incurred costs of
claims, commissions and related expenses are charged against the earned proportion of premiums, net of reinsurance, as
follows:
- Premiums written relate to risks assumed during the year, and include estimates of premiums due but not yet
received, less an allowance for estimated lapses.
- Claims arising on maturity are recognized when the claim becomes due for payment. Death claims are accounted for on
notification. Surrenders are accounted for on payment.
- Expenses and commissions are allocated to the life fund as incurred in the management of the life business.
- The life assurance contracts (accounted for in life fund) are assessed every three years by qualified consulting actuaries
in accordance with section 29 of the Insurance Act. Any resulting actuarial loss is made up by additional provisions
charged to the Group's profit and loss account.
Actuarial surpluses are allocated between the shareholders and the policyholders. Any balance remaining is retained in
the life fund and attributable to “with profit” policyholders as the date of actuarial valuation.
In accordance with section 22(1) of the Insurance Act 2003, an additional reserve (contingency reserves) of not less than
25% of the net written premium for every year between each valuation date, is maintained.
(z) Deferred acquisition and maintenance costsPrepaid expenses include deferred acquisition expenses and deferred maintenance expenses. These expenses are incurred as a
result of direct business earned from brokers. The deferred portion is calculated based on the percentage of unearned premium
to written premium.
(aa) Borrowings Borrowings are recorded at face value less amounts repaid. Direct issue costs are capitalized and amortised over the tenor of the
Underlying instrument. Interest costs are recognized in the profit and loss account over the maturity of the instrument.
FINANCIALS ...
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 3838
Consolidated Balance SheetsAs at 31 December, 2009
Notes
ASSETS
Cash in hand and balances with CBN 11Treasury bills 12Due from financial institutions 13Loans and advances to customers 14Advances under finance lease 15Insurance receivables 16Investment securities 17Investment in subsidiaries 18Deferred tax assets 30(b)Other assets 21Investment property 20Property and equipment 22Goodwill on consolidation 23TOTAL ASSETSLIABILITIESCustomers' deposits 24Due to other banks 25Claims payable 26Liability on investment contracts 27Liabilities on insurance contracts 28Current income tax payable 10(b)Other liabilities 29Deferred tax liabilities 30(c)Retirement benefit obligations 31Other borrowings 32
TOTAL LIABILITIES NET LIABILITIES
CAPITAL AND RESERVESShare capital 33Share premium 34Revaluation reserve 35(a)&(b)Retained earnings 35(a)&(b)Other reserves 35(a)&(b)
EQUITY ATTRIBUTABLE TO EQUITY- HOLDERS OF THE BANK
Non-controlling interest 36
TOTAL EQUITY
Guarantees and other commitments on behalf of customers 37(b)
6,354,206 5,810,659 5,851,836 5,309,086 5,049,245 2,923,425 5,049,245 2,923,425
60,292,150 13,335,516 58,729,492 9,539,964 30,001,550 46,166,955 28,636,557 49,689,651
463,206 913,272 456,882 822,453 212,049 85,565 - -
3,874,052 14,696,765 2,464,782 2,464,782 - - 2,894,479 2,894,479
20,242,539 18,843,223 19,759,352 18,511,749
5,964,253 8,967,682 5,725,233 5,045,953 4,198,020 3,032,351 - -
14,284,971 14,833,479 13,217,865 13,780,071 - - - -
150,936,241 129,608,892 142,785,723 110,981,613
94,058,964 108,825,013 94,791,074 108,907,683 467,797 - 467,797 - 205,017 128,066 - - 443,422 605,315 - - 985,051 777,340 - - 406,245 417,840 224,081 191,040
11,195,634 15,695,604 4,968,942 4,126,176 277,620 - - - 61,803 51,870 53,405 48,154
88,672,659 43,284,660 87,779,538 42,337,212
196,774,212 169,785,708 188,284,837 155,610,265
(45,837,971) (40,176,816) (45,499,114) (44,628,652)
5,160,315 5,034,971 5,160,315 5,034,971 18,791,971 17,693,085 18,791,971 17,693,085 4,249,457 3,779,614 2,088,605 2,088,605
(77,438,607) (70,631,377) (75,664,905) (73,570,213) 4,245,536 4,201,740 4,124,900 4,124,900
(44,991,328) (39,921,967) (45,499,114) (44,628,652) (846,643) (254,849) - -
(45,837,971) (40,176,816) (45,499,114) (44,628,652)
2,612,397 2,479,855 2,612,397 2,479,855
The accounting policies on pages 15 to 26 and financial statements and notes on pages 30 to 99 were approved by the Board
of Directors on 20 May 2010 and signed on its behalf by:
)
Chief Samuel Bolarinde )
) Directors
)
Mr. Segun Oloketuyi )
Dec. 2009
N'000
Group
Mar. 2009
N'000
Group Dec. 2009
N'000
Bank Mar. 2009
N'000
Bank
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 3939
Consolidated Profit and Loss AccountFor the period ended 31 December, 2009
Group Group Bank Bank
Notes Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
9 months 12 months 9 months 12 months
N'000
GROSS EARNINGS 18,994,974 16,551,373 16,272,245 12,938,450
Interest and similar income 3 12,945,257 8,977,903 11,563,403 8,272,035 Interest and similar expenses 4 (8,634,693) (12,153,808) (7,845,973) (10,342,198)
Net interest margin 4,310,564 (3,175,905) 3,717,430 (2,070,163)
Fee and commission income 5 4,535,283 5,759,736 4,077,113 4,417,350
Net fee and commission income 4,535,283 5,759,736 4,077,113 4,417,350
Net foreign exchange income 6 437,045 183,239 433,524 183,239
Underwriting profit 7 288,153 523,750 - -
Income from investments 8 789,236 1,106,745 198,205 65,826
Operating income 10,360,281 4,397,565 8,426,272 2,596,252
Operating expenses 9 (14,390,194) (16,495,325) (13,293,765) (14,477,190)
Loan loss (expenses)/ recoveries 14(h) (4,292,504) (2,973,557) 1,336,228 (6,961,467)
(Diminution)/ recoveries in other asset
and investment values 14(i) (545,782) (13,234,895) 222,011 (594,469)
LOSS ON ORDINARY ACTIVITIES
BEFORE TAXATION (8,868,199) (28,306,212) (3,309,254) (19,436,874)
Taxation 10(a) 1,337,901 7,850,756 1,214,562 7,768,466
LOSS ON ORDINARY ACTIVITIES
AFTER TAXATION (7,530,298) (20,455,456) (2,094,692) (11,668,408)
Non-controlling interest 36(a) 766,864 1,393,413 - -
Loss attributable to equity
holders of the Bank (6,763,434) (19,062,043) (2,094,692) (11,668,408)
APPROPRIATIONS
Transfer to statutory reserve - 3,117 - -
Transfer to statutory contingency
reserve 35(a)&(b) 43,796 25,109 - -
Transfer to retained earnings 35(a)&(b) (6,807,230) (19,090,269) (2,094,692) (11,668,408)
(6,763,434) (19,062,043) (2,094,692) (11,668,408)
Loss per share (kobo) 39 (66) (189) (21) (116)
The accounting policies on pages 15 to 26 and and notes on page 30 to 99 form an integral part of these financial statements.
N'000N'000N'000
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 4040
Statements of Cash FlowsFor the period ended 31 December, 2009
Group Group Bank Bank
Notes Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
9 months 12 months 9 months 12 months
N'000OPERATING ACTIVITIES
Net cash flow from operating activities 40 2,797,721 (43,267,138) 7,362,085 (43,025,519) Income tax paid 10(b) (63,872) (42,505) - - Net cash flows from operating
activities 2,733,849 (43,309,643) 7,362,085 (43,025,519)
INVESTING ACTIVITIES
Additional investments in unquoted equities 17(f) (207,611) - - - Dividend income received 8 201,790 55,283 181,752 18,442 Purchase of property and equipment (1,223,725) (1,417,544) (778,426) (1,226,846)Proceeds from disposal of property
and equipment 75,694 40,945 18,290 33,154 Proceeds from disposal of long term
investments 3,001,979 53,219 - - Purchase of investment property 20(a) (38,878) - - - Proceeds from disposal of investment property 81,548 - - - Purchase of shares in subsidiary (18,715) - - - Net cash flows from investing
activities 1,872,082 (1,268,097) (578,384) (1,175,250)
FINANCING ACTIVITIES
Borrowings- Inflow from CBN financial accomodation loan 87,000,000 - 87,000,000 - -Overdrawn CBN account - 22,897,351 - 22,897,351 - Repayment of bank overdraft (42,391,539) (1,475,654) (42,337,212) (1,822,898) Inflow from non-controlling interest - 560,807 - - Proceeds from issue of shares 1,253,440 - 1,253,440 - Share issue expenses (29,210) - (29,210) -
Net cash flows from financing activities 45,832,691 21,982,504 45,887,018 21,074,453
Net increase/(decrease) in cash and cash equivalents 50,438,622 (22,595,236) 52,670,719 (23,126,316)
Cash and cash equivalents, beginning
of period 19,864,859 42,460,095 16,067,734 39,194,050
Cash and cash equivalents, end of
period 41 70,303,481 19,864,859 68,738,453 16,067,734
Net increase/(decrease) in cash and cash
equivalents 50,438,622 (22,595,236) 52,670,719 (23,126,316)
The accounting policies on pages 15 to 26 and financial statements and noted on page 30 to 99 form an integral part of these financial statements.
22(a)&(b)
N'000N'000N'000
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 4141
Notes to the Consolidated Financial StatementsFor the period ended 31 December, 2009
1 General information
Wema Bank Plc ("the Bank") was incorporated in Nigeria on 2 May 1945 under the Companies &
Allied Matters Act of Nigeria as a private limited liability company and was converted to a public
company in April 1987. The Bank's shares, which are currently quoted on the Nigeria Stock
Exchange, were first listed in February 1991. The Bank was issued a universal banking licence by
the Central Bank of Nigeria in January 2001. Arising from the consolidation in the banking industry,
Wema Bank Plc acquired National Bank of Nigeria Limited in December 2005.
The Bank has five (5) direct and two (2) indirect subsidiaries as shown below:
Country of Percentage Nature of
Incorporation holding holding
Wema Asset Management Limited Nigeria 100% Direct
Wema Registrars Limited Nigeria 100% Direct
Wema Insurance Brokers Limited Nigeria 100% Direct
Wema Homes Limited Nigeria 100% Direct
Wema Securities and Finance Plc Nigeria 80.06% Direct
Great Nigeria Insurance Company PlcNigeria 75% Indirect
Independent Securities Limited Nigeria 73.25% Indirect
2 Segment analysis
(a) By business segment
The Group's business is organized along three (3) main business segments
(i) Banking - includes acting as financial intermediaries
(ii) Asset management - includes portfolio management and advisory services
(iii) Non-banking financial services - includes the provision of finance house services.
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 4242
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
(b)
Busi
ness
seg
men
ts:
Dec
. 20
09
Mar
. 200
9 D
ec.
2009
M
ar. 2
009
Dec
. 20
09
Mar
. 200
9 D
ec.
2009
M
ar. 2
009
Dec
. 20
09
Mar
. 200
9 N
'000
9 m
onth
s 1
2 m
onth
s 9
mon
ths
12
mon
ths
9 m
onth
s 1
2 m
onth
s 9
mon
ths
12
mon
ths
9 m
onth
s 1
2 m
onth
s G
ross
ear
ning
s:
Der
ived
fro
m e
xter
nal
cust
omer
sD
eriv
ed f
rom
oth
er
busi
ness
seg
men
tsCh
arge
d to
oth
er s
egm
ents
16,2
70,0
86
11
,090
,360
1,75
1,40
7
2,56
0,72
6
95,5
93
1,57
4,09
4
87
7,88
8
1,
326,
193
18,9
94,9
74
16
,551
,373
2,15
9
1,
848,
090
1,
911,
799
-
-
-
19
7,30
1
26
3,13
0
2,11
1,25
9
2,11
1,22
0
-
-
-
-
-
-
-
-
(2
,111
,259
)
(2
,111
,220
)
To
tal R
even
ue16
,272
,245
12,9
38,4
50
3,
663,
206
2,56
0,72
6
95,5
93
1,
574,
094
1,07
5,18
9
1,58
9,32
3
18
,994
,974
16,5
51,3
73
Inte
rest
exp
ense
s(7
,845
,973
)
(1
0,34
2,19
8)
(3
57,2
36)
(5
46,1
65)
(405
,290
)
(1
,150
,205
)
(2
6,19
4)
(1
15,2
40)
(8,6
34,6
93)
(12,
153,
808)
8,42
6,27
2
2,
596,
252
3,30
5,97
0
16
6,47
1
(3
09,6
97)
42
3,88
9
1,04
8,99
5
1,47
4,08
3
10
,360
,281
4,39
7,56
5
Expe
nse:
Dep
reci
atio
n(1
,256
,976
)
(1
,777
,185
)
(1
0,87
8)
(8
,009
)
(15,
470)
(80,
026)
(9
8,66
7)
(1
14,2
42)
(1,3
81,9
91)
(1,9
79,4
62)
Prof
it b
efor
e ta
x(3
,309
,254
)
(1
9,43
6,87
4)
1,14
5,11
4
(2
,862
,361
)
(4,2
21,8
08)
(4
,561
,479
)
(2,4
82,2
50)
(1
,445
,498
)
(8,8
68,1
99)
(28,
306,
212)
Ta
xati
on1,
337,
901
7,85
0,75
6
Pr
ofit
aft
er t
ax(7
,530
,298
)
(2
0,45
5,45
6)
Ass
ets
and
Liab
iliti
es:
Tang
ible
seg
men
t as
sets
142,
785,
723
110,
981,
613
11,2
74,2
79
17
,224
,190
1,
401,
099
30
,560
,685
10
,151
,122
11
,873
,169
16
5,61
2,22
3
170,
639,
657
Ch
arge
d to
oth
er s
egm
ents
-
-
-
-
-
-
-
-
(1
4,67
5,98
2)
(4
1,03
0,76
5)
Tota
l ass
ets
142,
785,
723
110,
981,
613
11,2
74,2
79
17,2
24,1
90
1,40
1,09
9
30,5
60,6
85
10,1
51,1
22
11
,873
,169
15
0,93
6,24
1
129,
608,
892
Segm
ent
liabi
litie
s18
8,28
4,83
7
15
5,61
0,26
5
14
,200
,496
23,1
96,2
43
8,25
0,73
4
36,4
15,2
70
4,05
3,30
7
3,87
5,81
8
21
4,78
9,37
4
219,
097,
596
Ch
arge
d to
oth
er s
egm
ents
-
-
-
-
-
-
-
-
(1
8,01
5,16
2)
(4
9,31
1,88
8)
Tota
l lia
bilit
ies
188,
284,
837
155,
610,
265
14,2
00,4
96
23,1
96,2
43
8,25
0,73
4
36,4
15,2
70
4,05
3,30
7
3,87
5,81
8
19
6,77
4,21
2
169,
785,
708
Net
ass
ets/
(lia
bilit
ies)
(45,
499,
114)
(4
4,62
8,65
2)
(2,9
26,2
17)
(5
,972
,053
)
(6,8
49,6
35)
(5
,854
,585
)
6,09
7,81
5
7,99
7,35
1
(4
5,83
7,97
1)
(40,
176,
816)
Gro
up T
otal
N
on -
allo
cate
d se
gmen
ts
Ban
king
A
sset
Man
agem
ent
Non
ban
king
fi
nanc
ial s
ervi
ces
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
N'0
00
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 4343
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
3 Interest and similar income Interest and similar income was derived as follows:(a)
(b)
4 Interest and similar expenses Interest and similar expenses comprise:(a)
Source
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
9 months 12 months 9 months 12 months
N'000
Placements 2,417,342 188,556 1,533,356 -
Treasury bills 77,616 670,197 77,616 670,197
Loans and advances 10,331,236 7,903,035 9,840,544 7,385,723
Advances under finance lease 119,063 216,115 111,887 216,115
12,945,257 8,977,903 11,563,403 8,272,035
Geographical location
Interest income earned in Nigeria
Interest income earned outside Nigeria
Source: Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
9 months 12 months 9 months 12 months
Savings accounts 238,846 399,428 234,838 346,105
Time deposits 4,499,952 7,337,928 3,733,901 6,209,578
Borrowed funds 3,895,895 4,416,452 3,877,234 3,786,515
8,634,693 12,153,808 7,845,973 10,342,198
N'000 N'000 N'000
Group
Dec. 2009
9 months
12,945,257
-
12,945,257
N'000
Group
Mar. 2009
12 months
8,977,903
-
8,977,903
N'000
Bank
Dec. 2009
9 months
11,563,403
-
11,563,403
N'000
Bank
Mar. 2009
12 months
8,272,035
-
8,272,035
N'000
N'000 N'000 N'000 N'000
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9
(b) Geographical Location: Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
9 months 12 months 9 months 12 months
N'000
Paid in Nigeria 8,634,693 12,153,808 7,845,973 10,342,198
Paid outside Nigeria - - - -
8,634,693 12,153,808 7,845,973 10,342,198
5 Fee and commission income Fee and commission income comprises:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
9 months 12 months 9 months 12 months
Credit related fees 1,899,197 2,466,086 1,893,515 2,845,934
Commission on turnover 944,855 1,397,128 942,837 1,397,128
Other fees and commissions 1,337,600 607,482 1,235,825 143,760
Other income 353,631 1,289,040 4,936 30,528
4,535,283 5,759,736 4,077,113 4,417,350
6 Net foreign exchange income Net foreign exchange income comprises:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
9 months 12 months 9 months 12 months
Foreign currency trading 291,621 215,298 291,621 215,298
Exchange gain/(loss) 145,424 (32,059) 141,903 (32,059)
437,045 183,239 433,524 183,239
N'000 N'000 N'000
N'000 N'000 N'000 N'000
N'000 N'000 N'000 N'000
4444
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 4545
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
7 Underwriting profit
Underwriting profit comprises:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
9 months 12 months 9 months 12 months
General insurance 281,905 351,688 -
Shareholders portion of life assurance 6,248 172,062
Underwriting profit 288,153 523,750 -
8 Income from investments Income from investments comprises:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
9 months 12 months 9 months 12 months
Dividend income 201,790 55,283 181,752 18,442
Rental income 30,930 47,384 16,453 47,384
Profit on sale of securities 556,516 1,004,078 -
789,236 1,106,745 198,205 65,826
-
-
-
N'000 N'000 N'000 N'000
N'000 N'000 N'000 N'000
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 4646
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
9 Operating expenses(a) Analysis of operating expenses:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
9 months 12 months 9 months 12 months
N'000 N'000 N'000 N'000
Staff salaries and allowances 8,128,708 7,912,705 7,518,273 7,230,324
Depreciation (see note 22(a) & (b)) 1,381,991 1,979,462 1,256,976 1,777,185
Reversal of depreciation on investment
property (see note 22(a)(ii)) (46,300) - - -
Goodwill impairment (see note 23(b)) 37,171 - - -
Loss on disposal of property and equipment 47,448 - 65,366 -
Administrative and general expenses 1,220,154 2,808,986 783,384 1,710,346
Repairs and maintenance 1,416,743 1,196,563 1,391,613 1,177,811
Insurance 593,373 916,374 754,363 903,725
Professional fees 248,802 454,841 230,376 410,526
Director's emoluments 19,370 2,765 19,370 2,765
Rents and rates 441,784 239,301 415,917 351,807 Travelling 141,337 282,068 120,811 255,128
Auditor's remuneration 96,800 83,870 75,000 65,000
Business development expenses 462,317 349,010 462,317 331,458
Printing and stationary 200,496 269,380 199,999 261,115
14,390,194 16,495,325 13,293,765 14,477,190
(b) Staff and executive directors' costs(i) Employee costs, including executive directors, during the period is shown below:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
9 months 12 months 9 months 12 months
N'000 N'000 N'000 N'000
Wages and salaries 6,546,181 7,296,594 5,999,080 6,638,747
Pension cost : -
Defined contribution plans 593,157 616,111 549,457 591,577
7,139,338 7,912,705 6,548,537 7,230,324
Other retirement benefit costs 989,370 - 969,736 -
8,128,708 7,912,705 7,518,273 7,230,324
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 4747
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
(ii) The average number of persons employed by the Group during the period was as follows:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
Number Number Number Number
Executive directors 6 3 3 3
Management 84 43 65 38
Non-management 1,932 1,434 1,771 1,373
2,022 1,480 1,839 1,414
(b) (iii) Employees other than directors, earning more than N60,000 per annum, whose duties were wholly or mainly
discharged in Nigeria, received emoluments (excluding pension contributions and certain benefits) in the
following ranges: Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
9 months 12 months 9 months 12 months
Number Number Number Number
N 250,001 - N 260,000 387 142 339 142
N 300,001 - N 310,000 239 196 210 196
N 440,001 - N 450,000 279 216 256 208
N 500,001 - N 560,000 211 246 164 242
N 790,001 - N 800,000 13 155 - 155
N 910,001 - N 920,000 427 61 418 49
N1,490,001 - N1,500,000 185 127 181 119
N1,510,001 - N1,520,000 12 82 6 82
N1,740,001 - N1,750,000 194 118 193 108
N1,990,001 - N2,000,000 34 59 32 56
N2,210,001 - N2,220,000 - 32 - 32
N2,390,001 - N2,400,000 15 13 15 6
N2,590,001 - N2,600,000 11 13 10 6
N2,790,001 - N2,800,001 - 6 - 6
N2,990,001 - N3,000,000 - 4 - 4
N3,100,001 - N3,110,000 15 10 15 3
2,022 1,480 1,839 1,414
(b)
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 4848
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
(c) Directors' remuneration:(c) (i) Directors' remuneration (excluding pension contributions and certain benefits) was provided as follows:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
9 months 12 months 9 months 12 months
N'000
Fees as directors 8,070 1,200 8,070 1,200
Other emoluments 11,300 1,565 11,300 1,565
19,370 2,765 19,370 2,765
Executive compensation 54,577 36,475 47,462 30,620
93,317 42,005 86,202 36,150
(c) (ii) The directors' remuneration shown above includes:
Bank Bank
Dec. 2009 Mar. 2009
9 months 12 months
Chairman 4,700 1,200
Highest paid director 6,404 3,868
(c) (iii) The emoluments of all other directors fell within the following ranges: Bank Bank
Dec. 2009 Mar. 2009
9 months 12 months
N'000
N2,370,001 - N2,380,000 - 2
N2,720,001 - N2,730,000 4 1
N3,060,001 - N3,070,000 - 1
N7,360,001 - N7,370,000 1 1
5 5
N'000N'000N'000
N'000N'000
N'000
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 4949
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
10 Taxation (a) Tax charge
The tax charge for the period comprises: Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
9 months 12 months 9 months 12 months
Company income tax 35,302 64,655 33,041 22,927
Education tax - - - - Prior period under-provision 16,975 - -
52,277 64,655 33,041 22,927 Deferred tax charge/(credit)
(see note 30(b)) (1,399,316) (7,743,250) (1,247,603) (7,791,393) Deferred tax charge/(credit)
(see note 30(c)) 9,138 (172,161) - -
(1,337,901) (7,850,756) (1,214,562) (7,768,466)
(b) (i) Current income tax payable
The movement on the current income tax payable account during the period was as follows:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
Balance, beginning of period 417,840 395,690 191,040 168,113
Charge for the period (see note 10(a)) 52,277 64,655 33,041 22,927
Payments during the period (63,872) (42,505) - -
Balance, end of period 406,245 417,840 224,081 191,040
(ii) The current tax charge for the Bank has been computed based on the minimum tax requirements as there
was no taxable profit in the period (March 2009: nil).
11 Cash in hand and balances with CBN (Central Bank of Nigeria) (a) Cash in hand and balances with regulatory bodies comprise:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
Cash in hand 2,745,644 3,605,918 2,743,274 3,604,345 Operating account held with the Central
Bank of Nigeria (CBN) 1,016,442 - 1,016,442 -
Placement with CBN 1,200,000 - 1,200,000 -
4,962,086 3,605,918 4,959,716 3,604,345 Mandatory reserve deposits with CBN
- Cash reserve 892,120 1,704,741 892,120 1,704,741 - Statutory deposits (See (c) below) 500,000 500,000 - -
6,354,206 5,810,659 5,851,836 5,309,086
N'000N'000N'000N'000
N'000N'000N'000N'000
N'000N'000N'000N'000
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 5050
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
(b) Mandatory reserve deposits are not available for use in the Group's day-to-day operations.
(c) This represents the amount deposited with the Central Bank of Nigeria in accordance with section 9(1) and
section 10(3) of the Insurance Act 2003.
12 Treasury bills These comprise:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
N'000
Treasury bills (see note (a) below) 5,049,245 2,923,425 5,049,245 2,923,425
5,049,245 2,923,425 5,049,245 2,923,425
(a) Included in treasury bills are bills amounting to N2,151,589,000 (31 March 2009: N2,923,425,000) which
have been pledged as collateral by the Bank.
13 Due from financial institutions(a) Due from financial institutions comprise:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
Balances held with other local banks
and discount houses
- Current accounts 158,955 11,456,026 - 7,660,474
- Placements (see note (b) below) 58,032,715 - 56,629,012 -
Balances and cash balances outside Nigeria
- Balances held with other banks outside
Nigeria (see note (c) below) 2,100,480 1,879,490 2,100,480 1,879,490
60,292,150 13,335,516 58,729,492 9,539,964
(b) Included in placements are N42,000,000,000 (March 2009: Nil) placed with local banks. All placements
with local banks in Nigeria are backed by CBN guarantees valid until 31 December 2010.
(c)
behalf of customers in various foreign accounts amounting to N368,010,000 (31 March 2009: N780,756,000)
to cover letters of credit transactions. The corresponding liability for this amount is included in other
liabilities (see Note 29).
14 Loans and advances to customers:(a) Loans and advances to customers comprise:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
N'000
Overdrafts 24,375,533 50,287,658 33,275,380 90,799,456
Term loans 46,622,455 52,243,144 36,938,836 43,484,474
Others 24,268,925 25,307,911 23,905,685 25,307,911
Included in balances held with other banks outside Nigeria is the Naira value of foreign currencies held on
N'000N'000N'000
N'000N'000N'000
N'000N'000N'000N'000
95,266,913 127,838,713 94,119,901 159,591,841
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9
N'000N'000N'000N'000
5151
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
N'000N'000N'000N'000
N'000N'000N'000N'000
Less: allowances for bad and doubtful loans
- specific allowance (see note (e)
below) (51,113,293) (58,670,565) (52,250,768) (87,783,513)
- general allowance (see note (f)(i)
below) (4,436) (574,977) - (468,810)
- Interest in suspense (see note (g)
below) (14,147,634) (22,426,216) (13,232,576) (21,649,867)
30,001,550 46,166,955 28,636,557 49,689,651
(b) Loans and advances by security comprise:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
Secured against real estate 38,023,442 19,137,026 36,223,133 18,547,591
Secured by shares of quoted companies 5,764,150 4,066,732 3,727,164 3,640,555
Otherwise secured 40,599,449 70,022,717 43,417,741 102,835,012
Unsecured 10,879,872 34,612,238 10,751,863 34,568,683
95,266,913 127,838,713 94,119,901 159,591,841
(c) The gross value of loans and advances by maturity is as follows:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
Under 1 month 45,773,494 14,012,798 53,066,373 13,475,585
1 - 3 months 1,741,984 32,854,031 1,417,888 32,613,565
3 - 6 months 3,206,221 19,260,374 3,127,230 10,448,835
6 - 12 months 1,378,496 19,705,688 1,440,898 16,479,827
Over 12 months 43,166,718 42,005,822 35,067,512 86,574,029
95,266,913 127,838,713 94,119,901 159,591,841
(d) The gross value of loans and advances by performance is as follows:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
Performing 24,656,258 39,196,019 24,212,613 46,880,990
Non-performing:
- Sub-standard 4,423,007 2,289,850 3,826,049 2,253,762
- Doubtful 1,974,119 10,970,098 1,743,759 2,498,171
- Lost 64,213,529 75,382,746 64,337,480 107,958,918
95,266,913 127,838,713 94,119,901 159,591,841
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 5252
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
(e) The movements on specific loan loss allowance during the period was as follows:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
Balance, beginning of period 58,670,565 58,007,589 87,783,513 82,434,921
Allowances made during the period 16,375,414 4,271,295 22,032,699 8,601,908
Allowances no longer required (10,614,785) (2,621,898) (21,982,917) (2,621,898)
Allowances written-off during the
period (13,317,901) (986,421) (35,582,527) (631,418)
Balance, end of period 51,113,293 58,670,565 52,250,768 87,783,513
(f) (i) The movement in general loan loss allowance during the period is as follows:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
Balance, beginning of period 574,977 594,421 468,810 464,692
(Writeback)/allowance made during
the period (570,541) (19,444) (468,810) 4,118
Balance, end of period 4,436 574,977 - 468,810
(f) (ii) In the current period, the Bank did not make a general provision on loans and advances and reversed the
general provision carried forward from prior year. The change which represents a change in accounting
estimates was based on a publication by the Nigerian Accounting Standard Board (NASB) dated 08 February
2010 at the request of Central Bank of Nigeria (CBN) in which a waiver was granted on the 1% general
provision required by paragraph 55 of “Statement of Accounting Standards – SAS 10 on Accounting for
Banks and Non-bank financial institutions” for the financial year ended on or before 31 December 2009.
Pursuant to the above and having ensured that full provisions were made on a case by case basis for
specific loan impairments by the Bank, the Board of Directors reversed the general allowance which stood
to the credit of the Bank as at the beginning of the current period ended 31 December 2009 to the profit
and loss account.
(g) The movement on interest-in-suspense during the period were as follows:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
Balance, beginning of period 22,426,216 7,117,435 21,649,867 6,747,065
Interest suspended during the period 6,095,074 15,857,847 6,319,944 15,434,535
Interest recovered (6,185,897) (393,564) (6,549,476) (393,564)
Interest written off (8,187,759) (155,502) (8,187,759) (138,169)
Balance, end of period 14,147,634 22,426,216 13,232,576 21,649,867
N'000N'000N'000N'000
N'000N'000N'000N'000
N'000N'000N'000N'000
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 5353
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
(h) Loan loss expense/ (recoveries) comprise:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
9 months 12 months 9 months 12 months
(h) (i) Loans and advances- General allowance (See (f)(i) above) (570,541) (19,444) (468,810) 4,118
- Specific allowance (See (e) above) 16,375,414 4,271,295 22,032,699 8,601,908
- Allowance no longer required (See (e) above) (10,614,785) (2,621,898) (21,982,917) (2,621,898)
5,190,088 1,629,953 (419,028) 5,984,128
(h) (ii) Advances under finance lease- General allowance (See Note 15(b)(ii)) (8,814) (25,569) (8,031) (21,409)
- Specific allowance (See Note 15(b)(i)) 20,399 1,369,173 - 998,748 - Allowance no longer required (See Note 15(b)(i)) (909,169) - (909,169) -
(897,584) 1,343,604 (917,200) 977,339
4,292,504 2,973,557 (1,336,228) 6,961,467
(i) Diminution/(recoveries) in other assets and investments value
This comprise: Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
9 months 12 months 9 months 12 months
Allowance made on unlisted investment securities - long term (see note 17(d)(ii)) 269,430 58,229 - 37,500
Allowance made on listed investment securities - long term (see note 17(d)(i)) 6,811 197,033 - 66,600
Allowance made on listed investment securities - short term (see note 17(e)) 800,233 11,612,703 - -
Specific allowance on other assets (see note 21(b)) 1,233,307 1,607,417 712,849 829,768
Allowance no longer required on other assets (see note 21(b)) (1,016,498) - (934,860) (339,399)
Write-off of other assets 11,541 - - -
Allowance no longer required on listed investment securities - short term (see note 17(e)) (783,210) - - -
Allowance no longer required on unlisted investment securities - long term (see note 17(d)(i)) (22,242) - - -
499,372 13,475,382 (222,011) 594,469
Allowance on insurance receivables (see note 16(b)) 46,410 293,500 - -
Allowance no longer required on insurance receivables (see note 16(b)) - (533,987) - -
545,782 13,234,895 (222,011) 594,469
N'000N'000N'000N'000
N'000N'000N'000N'000
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 5454
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
15 Advances under finance lease
(a)Advances under finance lease comprise:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
Gross investment in finance lease 1,508,123 3,446,943 1,039,968 2,913,908
Less: Un-earned income (75,519) (139,918) (75,519) (139,918)
Net investment in finance lease 1,432,604 3,307,025 964,449 2,773,990
Allowance for losses:
Specific (see note (b)(i) below) (969,387) (2,384,928) (507,567) (1,943,506)
General (see note (b)(ii) below) (11) (8,825) - (8,031)
Balance, end of period 463,206 913,272 456,882 822,453
(b) (i) The movement on specific allowances for bad and doubtful advances under finance lease was as follows:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
Balance, beginning of period 2,384,928 1,015,755 1,943,506 944,758
Charge for the period
(See note 14(h)(ii)) 20,399 1,369,173 - 998,748
Allowance no longer required
(See note 14(h)(ii)) (909,169) - (909,169) -
Allowance written off (526,771) - (526,770) -
Balance, end of period 969,387 2,384,928 507,567 1,943,506
(b) (ii) The movement on general allowances for bad and doubtful advances under finance lease was as follows:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
Balance, beginning of period 8,825 34,394 8,031 29,440
(Writeback) made during the period
(See note 14(h)(ii)) (8,814) (25,569) (8,031) (21,409)
Balance, end of period 11 8,825 - 8,031
N'000N'000N'000N'000
N'000N'000N'000N'000
N'000N'000N'000N'000
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9
(c) The maturity profile of the net investment in advances under finance lease is as follows:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
Under 1 month 663,128 718,644 194,973 185,609
1 - 3 months 53,297 6,253 53,297 6,253
3 - 6 months 6,175 62,797 6,175 62,797
6 - 12 months 79,381 62,927 79,381 62,927
Over 12 months 630,623 2,456,404 630,623 2,456,404
1,432,604 3,307,025 964,449 2,773,990
(d) The performance analysis of net advance under finance lease is as follows:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
Performing 456,427 922,097 455,284 803,128
Non performing
- Substandard - - -
- Doubtful 13,586 54,712 3,198 54,712
- Lost 962,591 2,330,216 505,967 1,916,150
1,432,604 3,307,025 964,449 2,773,990
16 Insurance receivables
(a) Insurance receivables comprise:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
Due from insurance companies 103,207 77,797 - -
Due from agents and brokers 526,332 359,704 - -
Due from reinsurers 3,468 22,612 - -
633,007 460,113 - -
Allowance for doubtful receivables
(see (b) below) (420,958) (374,548) - -
212,049 85,565 - -
N'000N'000N'000N'000
N'000N'000N'000N'000
N'000N'000N'000N'000
5555
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 5656
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
N'000 N'000 N'000 N'000
N'000 N'000 N'000 N'000
(b) Movement in allowance for doubtful insurance receivables is as follows:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
Balance, beginning of the period 374,548 615,035 - -
Additions during the period
(See note 14(i)) 46,410 293,500 - -
Allowance no longer required
(See note 14(i)) - (533,987) - -
Balance, end of the period 420,958 374,548 - -
17 Investment in securitiesInvestment in securities comprise:
(a) Investment in securities - long term Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
(a) (i) Listed equity securities - at cost 1,568,561 3,679,873 153,000 153,000
(a) (ii) Unlisted equity securities - at cost
- Frontage Communications Limited 1,705,030 1,705,030 1,705,030 1,705,030
- Associated Discount House Limited 1,353,703 1,353,703 1,353,703 1,353,703
- Knight Rook (Grant Properties) 906,695 906,695 906,695 906,695
- AIICO pension managers limited 80,000 80,000 - -
- Central Securities System Nigeria Limited 87,800 87,800 87,800 87,800
- ATM Consortium Limited 73,389 73,389 73,389 73,389
- Virgin Nigeria Limited 70,000 70,000 - -
- Nigeria Inter-bank Settlement System 47,482 47,482 47,482 47,482
- Ibadan Clay and Bricks Limited 40,000 40,000 - -
- E-Government 37,500 37,500 37,500 37,500
- Capital Bancorpt Limited 22,480 22,480 - -
- Continental Reinsurance Plc 200,000 - - -
- Sterling Assurance Nigeria Ltd 36,220 36,220 - -
- Others 81,471 77,871 - -
- Valucard Nigeria Plc 14,821 14,821 14,821 14,821
- Nigeria Industrial Development Bank 128 128 128 128
- Small and medium industries
investments (see note (c) below) 486,463 503,663 486,463 503,663
6,811,743 8,736,655 4,866,011 4,883,211
Less: Provision for diminution in values
(see note (d) below) (3,419,475) (2,589,591) (2,401,229) (2,418,429)
3,392,268 6,147,064 2,464,782 2,464,782
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 5757
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
N'000N'000N'000N'000
(b) Investment in securities- short term
Listed equity securities
- Proprietary investments 2,718,536 1,530,800 - -
- Own shares held - 32,096,341 - -
Less: Provision for diminution in value
(see note (e) below) (2,236,752) (25,077,440) - -
481,784 8,549,701 - -
3,874,052 14,696,765 2,464,782 2,464,782
(c) (i)
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
Kotco Power Industries Limited 139,965 139,965 139,965 139,965
Eagle Packaging Printing 100,000 100,000 100,000 100,000
Oil Palm Industry Limited 37,893 37,893 37,893 37,893
United Information Technology 56,000 56,000 56,000 56,000
Ecco Solution Limited 28,619 28,619 28,619 28,619
Tokson Industry Limited 40,000 40,000 40,000 40,000
Tifanny Stoneworks 30,000 30,000 30,000 30,000
Meroxe Paints Industry Limited 28,066 28,066 28,066 28,066
Chrisalis Limited - 17,200 - 17,200
Double Crown Limited 13,000 13,000 13,000 13,000
Interswitch Limited 10,420 10,420 10,420 10,420
Associated Equity Funds 2,500 2,500 2,500 2,500
486,463 503,663 486,463 503,663
(c) (ii) The Bank makes investments under the Small and Medium Enterprises Equity Investment Scheme
(SMEEIS) in line with the Policy Guidelines for 2001 Fiscal period (Monetary Policy Circular No. 35).
Included in unlisted long term investments are the Bank's investment under the Small and Medium Industries
Equity Investment Scheme (SMEEIS)). A total of N486,463,000 (31 March 2009: N503,663,000) has been
so far invested under the scheme. Due to the effective percentage holding of the Bank in these companies,
some of them qualify as associates. However, they are not accounted as associated entities as the
investments are held for sale and the value of the Bank's residual interest in the individual investee
companies is not material.
Equities in small and medium scale enterprises comprise:
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 5858
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
(d)
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
(d) (i) Listed equity securities :
Balance, beginning of period 240,033 244,125 109,600 43,000
Allowance made during the period
(see note 14(i)) 6,811 197,033 - 66,600
Allowance no longer required
(see note 14(i)) (22,242) - - -
Allowance written off - (201,125) - -
Reclassified from short term investment
securities (see (e) below) 593,085 - - -
Balance, end of period 817,687 240,033 109,600 109,600
(d) (ii) Unlisted equity securities:
Balance, beginning of period 2,349,558 1,945,737 2,308,829 1,925,737
(Write-off)/allowance made on equities
in small and medium scale enterprises
during the period (17,200) 345,592 (17,200) 345,592
Allowance made on other unlisted equities
during the period (see note 14(i)) 269,430 58,229 - 37,500
Balance, end of period 2,601,788 2,349,558 2,291,629 2,308,829
3,419,475 2,589,591 2,401,229 2,418,429
(e) Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
Balance, beginning of period 25,077,440 13,464,737 - -
Allowance made during the period
(see note 14(i)) 800,233 11,612,703 - -
Allowance no longer required
(see note 14(i)) (783,210) - - -
Reclassified to listed investments
securities - long term (see (d)(i) above) (593,085) - - -
Allowance written off (22,264,626) - - -
Balance, end of period 2,236,752 25,077,440 - -
Movement in allowance for impairment of listed investment in securities - short term is as follows:
Movement in allowance for impairment of investment in securities - long term is as follows:
N'000N'000N'000N'000
N'000N'000N'000N'000
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 5959
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
(f) (i) The movement in investment in securities-long term is as follows:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
Balance, beginning of the period 6,147,064 6,315,427 2,464,782 2,914,474
Additions 207,611 455,685 - -
Reclassification from investment
securities - short term (see (ii) below) 886,657 - - -
Redemption of long term bonds - (1,675) - -
Disposals (3,019,179) (222,644) (17,200) -
Provision for diminution (829,885) (399,729) 17,200 (449,692)
Balance, end of period 3,392,268 6,147,064 2,464,782 2,464,782
(ii) The investments reclassified from short term to long term are transferred at historical cost less allowance
for impairment in their value.
18 Investment in subsidiaries
(a) Investment in subsidiaries comprises:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
Wema Asset management Limited
(See Note (c) below) - - 300,000 300,000
Wema Registrars Limited
(See Note (d) below) - - 50,000 50,000
Wema Insurance Brokers Limited
(See Note (e) below) - - 5,000 5,000
Wema Homes Limited (See note (f) below) - - 1,629,193 1,629,193
Wema Securities and Finance Plc
(See Note (g) below) - - 910,286 910,286
- - 2,894,479 2,894,479
N'000N'000N'000N'000
N'000N'000N'000N'000
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 6060
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
(b) Principal subsidiary undertakings:
Country of Nature of Percentage Period endIncorporation Business of equity
capital held
1 Nigeria Asset management 100% 31/12/2009
2 Nigeria Securities
registration 100% 31/12/2009
3 Nigeria Insurance
brokerage 100% 31/12/2009
4 Nigeria Mortgage Services 100% 31/12/2009
5 Nigeria Finance house
services 80.06% 31/12/2009
(c) This represents the cost of the Bank's 100% equity holding in Wema Asset Management Ltd. The
company was incorporated in February 2000 and commenced operations in 2002.
(d) This represents the cost of the Bank's 100% equity holding in Wema Registrars Ltd. The company was
incorporated in 2002 and commenced operations in February 2003.
(e) This represents the cost of the Bank's 100% equity holding in Wema Insurance Brokers Ltd. The
company was incorporated in May 2002 and commenced operations in April 2004.
(f) This represents the cost of the Bank's 100% equity holding in Wema Homes Ltd. The company was
incorporated in February, 2004 and commenced operations in April 2005.
(g) This represents the cost of the Bank's 80.06% equity holding in Wema Securities and Finance Plc. The
company was incorporated in April 1988 and commenced operations in April 1992.
(h) The condensed financial statements of the consolidated subsidiaries are included in Note 19.
Company
Name
Wema Securities and Finance Plc
Wema Asset management Limited
Wema Registrars Limited
Wema Insurance Brokers Limited
Wema Homes Limited
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 6161
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
19Co
nden
sed
resu
lts
of c
onso
lidat
ed e
ntit
ies
(a)
Cond
ense
d re
sults
of
the
cons
olid
ated
ent
ities
as
at 3
1 D
ecem
ber
2009
, ar
e as
follo
ws:
Subs
idia
ry c
ompa
nies
/par
ent
com
pany
Grou
p ba
lanc
eEl
imin
atio
n En
trie
s W
ema
Bank
Plc
Wem
a In
sura
nce
Wem
a As
set
Man
agem
ent
Wem
a Se
curit
ies
Wem
a Re
gist
rars
W
ema
Hom
es
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
Cond
ense
d pr
ofit
and
loss
O
pera
ting
inco
me
10,3
60,2
81
(1
,816
,199
)
8,42
6,27
2
106,
689
Ope
ratin
g ex
pens
es
(14,
390,
194)
2,31
1,58
8
(13,
293,
765)
(48,
060)
Lo
an lo
ss (
expe
nse)
/ re
cove
ries
(4,2
92,5
04)
(5,4
65,2
63)
1,
336,
228
-
Re
cove
ries/
(dim
inut
ion)
on
othe
r
asse
ts a
nd in
vest
men
t va
lues
(5
45,7
82)
-22
2,01
1-
(Los
s)/p
rofit
bef
ore
tax
(8,8
68,1
99)
(4,9
69,8
74)
(3
,309
,254
)
58
,629
Ta
xatio
n 1,
337,
901
-1,
214,
562
(13,
483)
(Los
s)/p
rofit
afte
r tax
(7
,530
,298
)(4
,969
,874
)(2
,094
,692
)45
,146
Dec
embe
r 20
09
Cond
ense
d fi
nanc
ial p
osit
ion
Ass
ets
Cash
and
bal
ance
s w
ith
C
entr
al B
ank
of N
iger
ia
6,35
4,20
6
-
5,
851,
836
59
Trea
sury
bill
s 5,
049,
245
-
5,04
9,24
5
-
Due
fro
m f
inan
cial
inst
itutio
ns60
,292
,150
(6,2
24,8
54)
58
,729
,492
109,
686
Loan
s an
d ad
vanc
es t
o cu
stom
ers
30,0
01,5
50
79
,919
28
,636
,557
-
Adv
ance
s un
der
finan
ce le
ase
463,
206
-
456,
882
-
In
sura
nce
rece
ivab
les
212,
049
-
-
-
In
vest
men
t se
curit
ies
3,87
4,05
2
-
2,46
4,78
2
6,25
5
Inve
stm
ent
in s
ubsi
diar
ies
-
(2,8
94,4
79)
2,
894,
479
-
Def
erre
d ta
x as
sets
20,2
42,5
39
-
19
,759
,352
-
O
ther
ass
ets
5,96
4,25
3
(476
,687
)
5,
725,
233
24
6,81
6
Inve
stm
ent
prop
erty
4,
198,
020
-
-
Pr
oper
ty a
nd e
quip
men
t 14
,284
,971
-
13,2
17,8
65
10
,173
Goo
dwill
on
cons
olid
atio
n-
-
-
-
Tota
l ass
ets
150,
936,
241
(9,5
16,1
01)
142,
785,
723
372,
989
3,88
8,66
1(2
,473
,056
)19
6,08
3
(771
,862
)83
9,82
63,
342
843,
168
500,
515 -
6,33
8,87
259
,410
-21
2,04
971
2,45
0 -33
0,62
030
6,96
93,
695,
339
884,
558 -
13,0
40,7
82
(570
,068
)(4
88,2
45)
(79,
987)
(18,
173)
(1,1
56,4
73)
142,
967
(1,0
13,5
06)
228 -
180,
919
327,
522
6,32
4 -69
0,56
5 -15
2,56
79,
800 -
33,1
74-
1,40
1,09
9
110,
833
(234
,654
) -
22,2
42(1
01,5
79)
(9,4
87)
(111
,066
) 2 -83
4,62
4 - - - - - -77
,775
38,2
09-
950,
610
214,
093
(164
,002
) (2
79,5
65)
-(2
29,4
74)
-
(229
,474
)
1,56
6
- 32
3,41
1 89
8,14
2
- - - - - 74
,347
502,
681
100,
992
-
1,90
1,13
9
Grou
p ba
lanc
eEl
imin
atio
n En
trie
s W
ema
Bank
Plc
Wem
a In
sura
nce
Wem
a As
set
Man
agem
ent
Wem
a Se
curit
ies
Wem
a Re
gist
rars
W
ema
Hom
es
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 6262
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
Dec
embe
r 20
09
Fina
nced
by:
Cust
omer
s' d
epos
its
Due
to
othe
r ba
nks
Clai
ms
paya
ble
Liab
ility
on
inve
stm
ent
cont
ract
s
Liab
ilitie
s on
insu
ranc
e co
ntra
cts
Curr
ent
inco
me
tax
paya
ble
Oth
er li
abili
ties
Def
erre
d ta
x lia
bilit
ies
Retir
emen
t be
nefit
obl
igat
ions
Oth
er b
orro
win
gs
Equi
ty a
nd r
eser
ve
Dec
embe
r 20
09
Subs
idia
ry c
ompa
nies
/par
ent
com
pany
Cond
ense
d ca
sh f
low
Net
cas
h flo
w f
rom
ope
ratin
g
act
iviti
es
Net
cas
h flo
w f
rom
inve
stin
g
act
iviti
es
Net
cas
h flo
w f
rom
fin
anci
ng
a
ctiv
ities
Incr
ease
in c
ash
and
cash
e
quiv
alen
ts
Cash
bal
ance
, beg
inni
ng o
f pe
riod
Cash
bal
ance
, end
of
perio
d
317,
727
- - - -
8,14
6 61,5
97
-
8,39
8
287,
192
1,21
8,07
9
1,90
1,13
9
5,52
4 38,2
96
-
43,8
20 28
1,15
7 32
4,97
7
-
-
-
-
-
4,19
1
817,
511
8,78
4
-
-
120,
124
950,
610
43,8
62
(108
,536
)
-
(64,
674)
899,
300
834,
626
-
-
205,
017
5,55
1,55
7
985,
051
143,
700
1,42
4,63
7
268,
482
-
7,91
8,94
2 (3,4
56,6
04)
13,0
40,7
82 5,
968,
419
(183
,769
)
(3,0
96,6
81)
2,68
7,96
9
3,65
1,41
8
6,33
9,38
7
- - - - -
15,1
12 227,
404
354
- -
130,
119
372,
989
(162
,598
)
(8,0
22) -
(170
,620
)
280,
365
109,
745
94,7
91,0
74
467,
797
-
-
-
224,
081
4,96
8,94
2 -
53,4
05
87,7
79,5
38 (45,
499,
114)
142,
785,
723
7,36
2,08
5
(578
,384
)
45,8
87,0
18
52,6
70,7
19
16,0
67,7
34
68,7
38,4
53
(1,0
49,8
37)
- -
(5,1
08,1
35)
- -
(748
,145
)
- -
(11,
109,
044)
8,49
9,06
0 (9,5
16,1
01)
(37,
023,
463)
2,65
5,25
7
29,5
02,4
05
(4,8
65,8
01)
(1,3
59,0
53)
(6,2
24,8
54)
-
-
-
-
-
11,0
15
4,44
3,68
8 - -
3,79
6,03
1
1,40
1,09
9
26,5
40,0
20
57,2
40
(26,
460,
051)
137,
209
43,9
38
181,
147
(6,8
49,6
35)
94,0
58,9
64
467,
797
20
5,01
7
443,
422
98
5,05
1
406,
245
11,1
95,6
34
277,
620
61,8
03
88,6
72,6
59
(45,
837,
971)
15
0,93
6,24
1
2,73
3,84
9 1,
872,
082
45,8
32,6
91 50
,438
,622
19,8
64,8
59 70
,303
,481
Grou
p ba
lanc
eEl
imin
atio
n En
trie
s W
ema
Bank
Plc
Wem
a In
sura
nce
Wem
a As
set
Man
agem
ent
Wem
a Se
curit
ies
Wem
a Re
gist
rars
W
ema
Hom
es
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
Grou
p ba
lanc
eEl
imin
atio
n En
trie
s W
ema
Bank
Plc
Wem
a In
sura
nce
Wem
a As
set
Man
agem
ent
Wem
a Se
curit
ies
Wem
a Re
gist
rars
W
ema
Hom
es
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 6363
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
19(b
)Co
nden
sed
resu
lts o
f th
e co
nsol
idat
ed e
ntiti
es a
s at
31
Mar
ch 2
009
, are
as
follo
ws:
Mar
ch 2
009
Subs
idia
ry c
ompa
nies
/par
ent
com
pany
Cond
ense
d pr
ofit
and
loss
O
pera
ting
inco
me
4,39
7,56
5
Ope
ratin
g ex
pens
es
(16,
495,
325)
Loan
loss
exp
enss
(2
,973
,557
)
Dim
inut
ion
on o
ther
ass
ets
and
i
nves
tmen
t va
lues
(1
3,23
4,89
5)
(Los
s)/p
rofit
bef
ore
tax
(28,
306,
212)
Taxa
tion
7,85
0,75
6
(Los
s)/p
rofit
afte
r tax
(2
0,45
5,45
6)
Mar
ch 2
009
Cond
ense
d fi
nanc
ial p
osit
ion
Ass
ets
Cash
and
bal
ance
s w
ith
C
entr
al B
ank
of N
iger
ia
5,81
0,65
9
Trea
sury
bill
s 2,
923,
425
Due
fro
m f
inan
cial
inst
itutio
ns13
,335
,516
Loan
s an
d ad
vanc
es t
o cu
stom
ers
46,1
66,9
55
A
dvan
ces
unde
r fin
ance
leas
e91
3,27
2
Insu
ranc
e re
ceiv
able
s 85
,565
In
vest
men
t se
curit
ies
14,6
96,7
65
In
vest
men
t in
sub
sidi
arie
s -
Def
erre
d ta
x as
sets
18,8
43,2
23
Oth
er a
sset
s8,
967,
682
Inve
stm
ent
prop
erty
3,03
2,35
1
Prop
erty
and
equ
ipm
ent
14,8
33,4
79
Goo
dwill
on
cons
olid
atio
n-
-
Tota
l ass
ets
129,
608,
892
329,
674
(152
,653
) (1
38,8
14)
(20,
000)
18,2
07 8,
146
26,3
53
812
-
280,
345
1,
146,
945
- -
38,5
30
- - 48
,644
517,
851
98,9
20
-
2,13
2,04
7
283,
762
(192
,643
)
-
(22,
242)
68,8
77
-
68,8
77
32
-
899,
268
-
-
-
22
,241
-
-
76
,206
-
41,7
06
-
1,03
9,45
3
5,30
9,08
6 2,
923,
425
9,53
9,96
4 49,6
89,6
51
822,
453
-
2,
464,
782
2,89
4,47
9 18,5
11,7
49
5,04
5,95
3
-
13,7
80,0
71
-
110,
981,
613
423,
889
(389
,261
)
(3,1
44,6
17)
(1
,451
,490
)
(4,5
61,4
79)
18,2
92
(4,5
43,1
87)
180
-
43,7
58
875,
054
90
,819
-
897,
413
-
7,33
9
28,6
03,2
95
-
42
,827
-
30,5
60,6
85
926,
473
(2,1
64,0
69)
(2,6
87,2
35)
(2,3
97,1
06)
(6,3
21,9
37)
55,8
52
(6,2
66,0
85)
500,
542 -
3,65
0,87
63,
987,
820 -
85,5
655,
417,
225 -
324,
135
3,10
4,55
92,
514,
500
865,
531
20,4
50,7
53
100,
645
(57,
817)
- -
42,8
28
-
42,8
28
7 - 28
0,35
8
- - - 14
,705
- -
11,7
45
- 4,
424
-
311,
239
2,59
6,25
2(1
4,47
7,19
0)(6
,961
,467
)
(594
,469
)
(19,
436,
874)
7,76
8,46
6
(11,
668,
408)
- - (1
,359
,053
) (9
,532
,515
)
-
- 5,
841,
869
(2,8
94,4
79)
-
(2
7,92
2,72
0)
-
-
-
(35,
866,
898)
(263
,130
) 93
8,30
8
9,95
8,57
6 (8,7
49,5
88)
1,88
4,16
6
-
1,88
4,16
6
Grou
p ba
lanc
eEl
imin
atio
n En
trie
s W
ema
Bank
Plc
Wem
a In
sura
nce
Wem
a As
set
Man
agem
ent
Wem
a Se
curit
ies
Wem
a Re
gist
rars
W
ema
Hom
es
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
Grou
p ba
lanc
eEl
imin
atio
n En
trie
s W
ema
Bank
Plc
Wem
a In
sura
nce
Wem
a As
set
Man
agem
ent
Wem
a Se
curit
ies
Wem
a Re
gist
rars
W
ema
Hom
es
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9
Mar
ch 2
009
Fina
nced
by:
Cust
omer
s' d
epos
its
Due
to
othe
r ba
nks
Cl
aim
s pa
yabl
e
Liab
ility
on
inve
stm
ent
cont
ract
s
Liab
ilitie
s on
insu
ranc
e co
ntra
cts
Cu
rren
t in
com
e ta
x pa
yabl
e
Oth
er li
abili
ties
D
efer
red
tax
liabi
litie
s
Retir
emen
t be
nefit
obl
igat
ions
Oth
er b
orro
win
gs
Eq
uity
and
res
erve
(44,
628,
652)
(5,8
54,5
85)
Mar
ch 2
009
Subs
idia
ry c
ompa
nies
/par
ent
com
pany
Cond
ense
d ca
sh f
low
Net
cas
h flo
w f
rom
ope
ratin
g
act
iviti
es
Net
cas
h flo
w f
rom
inve
stin
g
act
iviti
es
Net
cas
h flo
w f
rom
fin
anci
ng
a
ctiv
ities
Incr
ease
in c
ash
and
cash
equ
ival
ents
Cash
bal
ance
, beg
inni
ng o
f pe
riod
Cash
bal
ance
, end
of
perio
d
- - - - -
8,75
4
35,7
45,8
60
- 40
0
660,
256
30
,560
,685
- - 12
8,06
6 60
5,31
5 77
7,34
0 18
3,82
4
23,6
54,3
26
- - - (4
,898
,118
) 20
,450
,753
- - - - - 3,
128
22
3,31
8
- -
- 84
,793
311,
239
70,5
94 496,
116
(286
,629
) 28
0,08
1
1,07
6
281,
157
(1,6
21,7
88)
(12,
446)
-
(1,6
34,2
34)
2,53
3,53
4
899,
300
(9,1
81,2
81)
507,
637
7,10
6,57
9 (1,5
67,0
65)
1,61
1,00
3
43,9
38
(5,1
41,3
91)
4,78
4,70
8
54,4
19
(302
,264
)
3,95
3,68
2
3,65
1,41
8
83,5
71
(738
)
-
82,8
33 197,
532
280,
365
108,
907,
683
- - - -
191,
040
4,
126,
176
-
48,1
54
42,3
37,2
12 110,
981,
613
(43,
025,
519)
(1,1
75,2
50)
21,0
74,4
53
(23,
126,
316)
39,1
94,0
50
16,0
67,7
34
(398
,500
)
- - - - -
(48,
909,
402)
-
- -
13
,441
,004
(35,
866,
898)
15,5
06,1
71
(5,8
68,1
24)
(5,9
66,3
18)
3,67
1,72
9
(5,0
30,7
82)
(1,3
59,0
53)
(43,
309,
643)
(1,2
68,0
97)
21,9
82,5
04
(22,
595,
236)
42,4
60,0
95
19,8
64,8
59
108,
825,
013
-
128,
066
605,
315
777,
340
417,
840
15
,695
,604
-
51,8
70
43,2
84,6
60 (4
0,17
6,81
6) 12
9,60
8,89
2
315,
830
- - - -
8,14
6 70,0
10
-
3,31
6
287,
192
1,
447,
553
2,13
2,04
7
- - - - - 22
,948
785,
316
- - -
231,
189
1,03
9,45
3
6464
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
Grou
p ba
lanc
eEl
imin
atio
n En
trie
s W
ema
Bank
Plc
Wem
a In
sura
nce
Wem
a As
set
Man
agem
ent
Wem
a Se
curit
ies
Wem
a Re
gist
rars
W
ema
Hom
es
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
Grou
p ba
lanc
eEl
imin
atio
n En
trie
s W
ema
Bank
Plc
Wem
a In
sura
nce
Wem
a As
set
Man
agem
ent
Wem
a Se
curit
ies
Wem
a Re
gist
rars
W
ema
Hom
es
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 6565
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
20 Investment property
(a) (i) Movement in investment property is as follows:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
N'000
Balance, beginning of period 3,032,351 - - Additions 38,878 - -
Revaluation gain (see 35(a)(i)) 320,739 - - Transfer from property and equipment (see note 22 (a)(i)) 887,600 - - Disposals (81,548) - -
Balance, end of period 4,198,020
1,003,561 - -
2,514,500 (485,710)
3,032,351 - -
(a) (ii) Investment property represents land and buildings held by the Group for investment purposes. They are not
occupied substantially by the Group and are not subject to periodic charges for depreciation. The properties are independently valued at least once every three years on the basis of open market value.This valuation is carried out by a professional qualified firm of valuers.
The recognised revaluation gain for the period arose from the land and building located at 39/41 Martin Street, Lagos in the sum of N222 million which was professionally valued on 22 January 2009 by Diya Fatimilehin & Co at N357.7 million resulting in a revaluation gain of N135.7 million and the land and building located at No. 11 Malanje Street, Wuse Zone 4, Abuja in the sum of N65million which was professionally valued on 14 January 2009 by Ubosi Eleh & Co. at N250million resulting in a revaluation gain of N185 million.
21 Other assets(a) Other assets comprise:
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
N'000 N'000 N'000
Prepayments 682,891 3,865,323 633,423 3,767,823 Interest receivable 79,323 393,625 6,384 89,391
Stock 389,696 337,413 385,808 334,682 Other accounts receivable 10,289,257 9,742,429 8,720,985 5,097,435
11,441,167 14,338,790 9,746,600 9,289,331 Allowances on other assets
(see (b) below) (5,476,914) (5,371,108) (4,021,367) (4,243,378)
5,964,253 8,967,682 5,725,233 5,045,953
(b)
Group Group Bank Bank Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
N'000 N'000 N'000 N'000
Balance, beginning of period 5,371,108 3,831,053 4,243,378 3,820,371 Allowance made during the
period (see note 14(i)) 1,233,307 1,607,417 712,849 829,768 Allowance no longer required
(see note 14(i)) (1,016,498) - (934,860) (339,399) Allowance written-off (111,003) (67,362) - (67,362)
Balance, end of period 5,476,914 5,371,108 4,021,367 4,243,378
The movement on allowance on other assets during the period was as follows:
N'000 N'000 N'000
N'000
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9
22 Property and equipment
(a) Group
The movement in these accounts during the period was as follows:
Computer
Freehold Leasehold Furnture & Equipment & software &
properties properties fittings machinery equipment
N'000 N'000 N'000 N'000 N'000
(i) Cost/valuation
Balance, beginning of the period 9,977,636
3,624,908
1,194,829
3,162,544
3,974,327
Additions 242,025
17,946
22,850
611,250
92,195
Valuation (see (vii) below) 68,600
505,600
-
-
-
Disposals -
-
(1,549)
(26,181)
(2,966)
Transfers to investment property
(see (viii) below & note 20(a)(i)) (162,600)
(725,000)
-
-
-
Balance, end of the period 10,125,661
3,423,454
1,216,130
3,747,613
4,063,556
(ii) Accumulated depreciation
Balance, beginning of the period 940,760 1,214,823 602,271 2,057,456 3,097,495
Charge for the period 152,700 208,871 122,604 307,413 323,565 Disposals - - - (10,625) (1,527) Reversal to profit and loss account
(see (viii) below & note 9(a)(i)) (5,400) (40,900) - - -
Balance, end of the period 1,088,060 1,382,794 724,875 2,354,244 3,419,533
(iii) Net Book Value
End of period 9,037,601
2,040,660
491,255
1,393,369
644,023
Beginning of the period 9,036,876 2,410,085 592,558 1,105,088 876,832
(iv) No leased assets are included in the above property and equipment.
(v) The authorised and contracted capital commitments as at the balance sheet date was nil (31 March 2009: nil)
(vi) The Bank's freehold and leasehold properties were revalued as at December 2006 by Messers. Jide Taiwo & Co. on the basis of depreciated
replacement cost. In line with CBN guideline on treatment of revaluation surplus, 45% of the revaluation gain of N6.63 billion amounting toN2.98billion has been taken to revaluation reserves. All subsequent additions are stated at cost.
(vii) The freehold and leasehold properties of Great Nigeria Insurance Company Plc, an indirect subsidiary of the Bank, were revalued as at January
2009 by Messers. Jide Taiwo & Co., Ubosi Eleh & Co and Diya Fatimilehin & Co. During the period, some of the freehold properties and leasehold
properties were reclassified to investment property in line with usage. The accumulated depreciation on the items transferred has been reversed to the profit and loss Account.
Motor Capital work
vehicle in progress
N'000 N'000
2,541,660
2,644
140,578
96,881
-
-
(190,554)
-
-
-
2,491,684
99,525
1,732,264 -
266,838 - (85,956) -
- -
1,913,146 -
578,538
99,525
809,396 2,644
Total
N'000
24,478,548
1,223,725
574,200
(221,250)
(887,600)
-
25,167,623
9,645,069
1,381,991 (98,108)
(46,300)
10,882,652
14,284,971
14,833,479
6666
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 6767
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
N'000 N'000 N'000 N'000 N'000 N'000 N'000
22 (b) Bank:
The movement on these accounts during the period was as follows:
(i) Cost/valuation
Computer
Freehold Leasehold Furnture & Equipment & software & Motor Capital work Total
properties properties fittings machinery equipment vehicle in progress
N'000
Balance, beginning of the period 9,795,636
2,977,340
1,035,603
2,887,374
3,816,514
1,991,594
2,644
22,506,705
Additions 242,025
17,696
21,381
217,042
88,184
95,217
96,881
778,426
Disposals -
-
-
(5,342)
(1,498)
(115,051)
-
(121,891)
Transfers -
-
5,177
13,056
9,306
20,000
(47,539)
-
- Balance, end
of the period 10,037,661
2,995,036
1,062,161
3,112,130
3,912,506
1,991,760
51,986
23,163,240
(ii) Accumulated depreciation
Balance, beginning of the period 931,764
1,148,369
466,296
1,857,920
3,004,866
1,317,419
-
8,726,634
Charge for the period 144,483
192,265
117,486
280,795
303,300
218,647
-
1,256,976 Disposals -
-
-
(3,447)
(677)
(34,111)
-
(38,235)
Balance, end of the period 1,076,247
1,340,634
583,782
2,135,268
3,307,489
1,501,955
-
9,945,375
Net Book Value
End of period 8,961,414
1,654,402
478,379
976,862
605,017
489,805
51,986
13,217,865
Beginningof the period 8,863,872
1,828,971
569,307
1,029,454
811,648
674,175
2,644
13,780,071
(iii) No leased assets are included in the above fixed assets account
(iv) The authorised and contracted capital commitments as at the balance sheet date was nil (31 March 2009: nil)
(v) The Bank's freehold and leasehold properties were revalued as at December 2006 by Messers. Jide Taiwo & Co. on the basis of
depreciated replacement cost. In line with CBN guideline on treatment of revaluation surplus, 45% of the revaluation gain of N6.63 billion amounting to N2.98billion has been taken to revaluation reserves. All subsequent additions are stated at cost.
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 6868
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
23 Goodwill
(a) Goodwill comprises: Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
N'000
Balance, beginning of period 3,691,923 3,691,923 3,037,229 3,037,229 Addition during the period (see (b)(ii) below) 37,171 - - -
Balance, end of period 3,729,094 3,691,923 3,037,229 3,037,229
Impairment charge (See (b)(i) below) (3,729,094) (3,691,923) (3,037,229) (3,037,229)Carrying value - - - -
(b) (i) The movement on the impairment charge on goodwill account during the period was as follows: Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
N'000
Balance, beginning of period 3,691,923 3,691,923 3,037,229 3,037,229 Charge in the period (see (ii) below) 37,171 - - -
Balance, end of period 3,729,094 3,691,923 3,037,229 3,037,229
(ii) During the period, the Group acquired additional ordinary shares in Independent Securities Ltd, an indirect
subsidiary of Wema Bank Plc. The resulting goodwill on consolidation is considered impaired and has been
charged to profit and loss accordingly.
24 Customers' deposits (a) Customers' deposits comprise:
Group Group Bank Bank Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
N'000Demand- Current 32,838,818 49,287,586 33,260,008 49,183,016 - Domiciliary 1,405,330 1,457,021 1,405,330 1,457,021
Time 39,851,100 34,260,821 40,357,069 34,622,346 Savings 19,963,716 23,819,585 19,768,667 23,645,300
94,058,964 108,825,013 94,791,074 108,907,683
(b) The maturity profile of customers' deposits is as follows: Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
N'000
Under 1 month 57,938,433 54,151,669 68,456,251 54,657,708 1 - 3 months 25,997,871 19,945,174 20,189,275 19,654,978 3 - 6 months 7,563,259 17,468,001 6,145,548 17,430,102 6 - 12 months 2,004,266 11,568,217 - 11,511,368
Over 12 months 555,135 5,691,952 - 5,653,527
94,058,964 108,825,013 94,791,074 108,907,683
N'000N'000N'000
N'000N'000N'000
N'000N'000N'000
N'000N'000N'000
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9
25 Due to other banks
Due to other banks comprise:
Items in the course of collection
26 Claims payable
Outstanding claims on insurance contracts comprise:
General insurance policies
Life assurance policies
27 Liability on investment contracts
(a) Liability on investment contracts comprises:
Deposit administration funds (see note(b) below)
Other managed funds (see note(c) below)
(b) (i) Movement in deposit administration funds:
Balance, beginning of periodDeposits receivedWithdrawals Guranteed interest
Balance, end of the period
(b) (ii) Deposit administration funds arose from investment contracts of the insurance subsidiary of the Group.
Holders of such contracts are guaranteed their funds plus a guaranteed interest for the tenor of the contract.
These contracts have additional life benefits scheme.
Group
Dec. 2009
N'000
467,797
467,797
Group
Dec. 2009
N'000
125,827
79,190
205,017
Group
Dec. 2009
N'000
416,027 27,395
443,422
Group Dec. 2009
578,155 3,821
(200,415) 34,466
416,027
N'000
Group
Mar. 2009
N'000
-
-
Group
Mar. 2009
N'000
106,220
21,846
128,066
Group
Mar. 2009
N'000
578,155 27,160
605,315
Group Mar. 2009
907,1294,214
(381,556)48,368
578,155
N'000
Bank
Dec. 2009
467,797
467,797
Bank
Dec. 2009
N'000
-
-
-
Bank
Dec. 2009
N'000
- -
-
Bank Dec. 2009
- - -
-
N'000
N'000
Bank
Mar. 2009
-
-
Bank
Mar. 2009
N’000
-
-
-
Bank
Mar. 2009
N'000
- -
-
Bank Mar. 2009
- - -
-
N'000
N'000
69
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 7070
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
(c) (i) Movement in other managed funds:
Balance, beginning of the period Additions Withdrawals Investment returns
Balance, end of the period
(c) (ii) Other managed funds represent monies administered by the Group under trust contract. Investors in the trust product are guaranteed their principal as well as agreed interest.
28 Liabilities on insurance contracts
(a) Liabilities on insurance contracts comprise:
Life Fund (see (b)(i) below) Provision for unexpired risks
(see (c) below)
(b) (i) The movement in life fund is as follows:
Balance, beginning of the period Increase in life funds
Balance, end of the period
(b) (ii) An actuarial valuation was performed in December 2007 on the long term life policies. An actuarial valuation
is due on the fund in December 2010 in line with section 29(1) of the Insurance Act of 2003.
(c) The movement in provision for unexpired risk is as follows:
Balance, beginning of the period
Increase in unexpired risks premium
Balance, end of the period
Group
Dec. 2009
Group
Dec. 2009
720,741
264,310
985,051
Group
Dec. 2009
575,611 145,130
720,741
27,160 16,733
(18,535) 2,037
27,395
N'000
N'000
N'000
Group
Mar. 2009
Group
Mar. 2009
575,611
201,729
777,340
Group
Mar. 2009
480,564 95,047
575,611
41,463 4,088
(22,537) 4,146
27,160
N'000
N'000
N'000
Bank
Dec. 2009
- - - -
-
Bank
Dec. 2009
-
-
-
Bank
Dec. 2009
- -
-
N'000
N'000
N'000
Bank
Mar. 2009
- - - -
-
Bank
Mar. 2009
-
-
-
Bank
Mar. 2009
- -
-
N'000
N'000
N'000
Bank
Mar. 2009
N'000
-
-
-
Bank
Dec. 2009
N'000
-
-
-
Group
Mar. 2009
N'000
157,789
43,940
201,729
Group
Dec. 2009
N'000
201,729
62,581
264,310
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 7171
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
29 Other liabilities
Other liabilities comprise:
Customers' deposits for letter of credit (see note 13(c))
Interest payable Certified cheques Unearned income Other credit balances Short term payable Customers funds
30 Deferred taxation(a) Deferred taxation comprises:
Deferred tax assets (see note (b) below)
Deferred tax liabilities (see note (c) below)
(b) Deferred tax assetsThe movement on this account during the period was as follows:
Balance, beginning of period
(Reversal)/charge for the period period (see note 10(a))
Balance, end of period
(c) Deferred tax liabilities
The movement on the deferred tax account during the period was as follows:
Balance, beginning of the period
(Credit)/Charge to income statements for the period (see note (10)(a))
Arising from revaluation of fixed assets and investment property (see note 35(a)(i))
Balance, end of period
N'000
Bank
Mar. 2009
780,756 -
1,195,294 94,972
2,055,154 - -
4,126,176
Bank Mar. 2009
N'000
18,511,749
-
18,511,749
N'000
Bank
Dec. 2009
368,010 -
1,816,783 39,427
2,744,722 - -
4,968,942
Bank Dec. 2009
N'000
19,759,352
-
19,759,352
N'000
Group
Mar. 2009
780,756 67,903
1,210,454 389,138
5,458,265 125,782
7,663,306
15,695,604
Group Mar. 2009
N'000
18,843,223
-
18,843,223
20,242,539
(277,620)
19,964,919
Group
Dec. 2009
N'000
368,010 57,883
1,817,822 100,551
3,905,366 231,478
4,714,524
11,195,634
Group Dec. 2009
N'000
N'000
N'000
Bank Mar. 2009
-
-
-
-
Bank Mar. 2009
10,720,356
7,791,393
18,511,749
N'000
N'000
Bank Dec. 2009
-
-
-
-
Bank Dec. 2009
18,511,749
1,247,603
19,759,352
172,161
(172,161)
N'000
N'000
Group Mar. 2009
11,099,973
7,743,250
18,843,223
Group Mar. 2009
-
-
N'000
N'000
Group Dec. 2009
18,843,223
1,399,316
20,242,539
Group Dec. 2009
-
9,138
268,482
277,620
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 7272
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
32 Other borrowings
(a) Other borrowings comprise:
CBN financial accomodation loan (see note (b) below)
Overdrawn account balance with CBN Bank overdraft (see note (c) below) National Housing Fund
(b) This represents a subordinated convertible loan, plus accrued interest, granted to the Bank by the CentralBank of Nigeria (CBN) in October 2009 for a period of 7 years. The principal amount is repayable as a bullet payment at maturity while interest is payable monthly at MPR (moneteray policy rate) plus 5 percent perannum. The loan is convertible to either preference shares or ordinary shares of the Bank at the option of theCBN and becomes exercisable from 61 months after the draw-down date.
(c) This represents a N500 million facility plus accrued interest at interest rates of 15% to 18% with an outstanding tenor of 54 months as at period end.
Bank Mar. 2009
N'000
- 42,337,212
- -
42,337,212
Bank Dec. 2009
N'000
87,779,538
- -
87,779,538
Group Mar. 2009
N'000
- 42,337,212
660,256 287,192
43,284,660
Group Dec. 2009
N'000
87,779,538 -
605,929 287,192
88,672,659
31 Retirement benefit obligations(a) Retirement benefit obligations comprise:
Defined contribution schemes (see note (b) below)
(b) Defined contribution schemesThe movement in defined contribution liability is as follows:
Balance, beginning of period
Charge for the period
Contribution remitted
Balance, end of period
The Group and its employees make a contribution of 7.5% and 15% of basic salary, housing and transport allowance respectively to each employee's retirement savings account maintained with their nominated Pension Fund Administrators.
N'000
38,428
591,577
(581,851)
48,154
N'000
Bank Mar. 2009
48,154
48,154
Bank Mar. 2009
N'000
N'000
Bank Dec. 2009
53,405
53,405
Bank Dec. 2009
48,154
549,457
(544,206)
53,405
N'000
41,561616,111
(605,802)
51,870
N'000
Group Mar. 2009
51,870
51,870
Group Mar. 2009
N'000
N'000
Group Dec. 2009
61,803
61,803
Group Dec. 2009
51,870
593,157
(583,224)
61,803
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 7373
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
33 Share capital
(a) Authorised:20,000,000,000 Ordinary shares of 50 kobo each (31 March 2009: 20,000,000,000 of 50k each)
(b) Issued and fully-paid:10,320,630,952 Ordinary shares of 50 kobo each (31 March 2009: 10,069,943,000 Ordinary shares of 50k each)
(c) (i) The movement on the issued and fully paid share capital account during the period was as follows:
Balance, beginning of period Issued during the period (see note (c)(ii) below)
Balance, end of period
(c) (ii) During the period, the Bank offered 250,687,950 ordinary shares of 50k each at N5 per share to SW8 Investment Limited. The proceeds of the issue were accounted for as follows:
ProceedTransfer to share capital (see (c)(i) above)Transfer to share premium (see note 34)
34 Share premium
Balance, beginning of period Issued during the period (See note 33(c)(ii)) Share issue expenses
Balance, end of period
BankMar. 2009
N'000
10,000,000
5,034,971
BankMar. 2009
N'000
5,034,971
-
5,034,971
BankMar. 2009
N'000
17,693,085 - -
17,693,085
GroupMar. 2009
N'000
10,000,000
5,034,971
GroupMar. 2009
N'000
5,034,971
-
5,034,971
GroupMar. 2009
N'000
17,693,085 - -
17,693,085
GroupDec. 2009
N'000
10,000,000
5,160,315
GroupDec. 2009
N'000
5,034,971
125,344
5,160,315
GroupDec. 2009
N'000
17,693,085 1,128,096
(29,210)
18,791,971
BankDec. 2009
N'000
10,000,000
5,160,315
BankDec. 2009
N'000
5,034,971
125,344
5,160,315
BankDec. 2009
N'000
17,693,085 1,128,096
(29,210)
18,791,971
N'000
1,253,440
(125,344) (1,128,096)
-
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9
35Re
serv
es
(a)
(i)
Grou
p
Synd
icat
ed
Stat
utor
y Co
ntin
genc
y SM
EEIS
loan
rede
mpt
ion
Capi
tal
Tota
lRe
tain
edTo
tal
rese
rve
rese
rve
rese
rve
rese
rve
rese
rve
Othe
r res
erve
sea
rnin
gsRe
serv
es
N'0
00
Bala
nce,
beg
inni
ng o
f the
per
iod
2,80
5,61
4
69
,219
526,
907
500,
000
30
0,00
0
4,
201,
740
3,
779,
614
(70,
631,
377)
(62,
650,
024)
Tr
ansf
erre
d fr
om p
rofit
and
loss
acc
ount
-
43
,796
-
-
-
43,7
96
-
(6,8
07,2
30)
(6,7
63,4
34)
Tran
sfer
red
to n
on-c
ontr
ollin
g in
tere
st-
-
-
-
-
-
(156
,614
)
-
(1
56,6
14)
Re
valu
atio
n su
rplu
s on
inve
stm
ent
p
rope
rty
(see
not
e 20
(a)(
i))-
-
-
-
-
-
320,
739
-
32
0,73
9
Reva
luat
ion
surp
lus
on p
rope
rty
and
e
quip
men
t (se
e no
te 2
2(a)
(i))
-
-
-
-
-
-
57
4,20
0
-
574,
200
De
ferr
ed ta
xatio
n on
reva
luat
ion
s
urpl
us (
see
note
30(
c))
-
-
-
-
-
-
(2
68,4
82)
-
(268
,482
)
Bala
nce,
end
of t
he p
erio
d2,
805,
614
113,
015
52
6,90
7
50
0,00
0
300,
000
4,24
5,53
6
4,24
9,45
7
(7
7,43
8,60
7)
(6
8,94
3,61
5)
(a)
(ii)
As re
quire
d by
insu
ranc
e re
gula
tions
, a c
ontin
genc
y re
serv
e is
mai
ntai
ned
for b
oth
the
non
life
insu
ranc
e an
d lif
e in
sura
nce
cont
ract
s un
derw
ritte
n by
the
Grou
p.
The
cont
inge
ncy
rese
rve
for t
he G
roup
, is
the
post
acq
uisi
tion
port
ion
of th
e Gr
oup'
s ho
ldin
g in
the
cont
inge
ncy
rese
rve
of th
e su
bsid
iary
com
pany
as
at p
erio
d en
d.
Fixe
d as
sets
and
inve
stm
ent
Prop
erty
re
valu
atio
n re
serv
e
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
7474
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 7575
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
35Re
serv
es
(b)
(i)
Bank
Bala
nce,
beg
inni
ng o
f the
per
iod
Tran
sfer
red
from
pro
fit a
nd lo
ss a
ccou
nt
Bala
nce,
end
of t
he p
erio
d
(ii)
Nig
eria
n ba
nkin
g re
gula
tions
requ
ire th
e Ba
nk to
mak
e an
ann
ual a
ppro
pria
tion
to a
sta
tuto
ry re
serv
e. A
s st
ipul
ated
by
S.16
(1)
of th
e Ba
nks
and
Othe
r
Fina
ncia
l Ins
titut
ion
Act o
f 199
1 (a
men
ded)
, an
appr
opria
tion
of 3
0% o
f pro
fit a
fter
tax
is m
ade
if th
e st
atut
ory
rese
rve
is le
ss th
an p
aid-
up s
hare
cap
ital
as a
t per
iod
end.
(iii)
The
SMEE
IS re
serv
e is
mai
ntai
ned
to c
ompl
y w
ith th
e Ce
ntra
l Ban
k of
Nig
eria
(CB
N)
requ
irem
ent t
hat a
ll lic
ense
d b
anks
set
asi
de a
por
tion
of th
e pr
ofit
afte
r tax
in a
fund
to b
e us
ed to
fina
nce
equi
ty in
vest
men
t in
qual
ifyin
g sm
all a
nd m
ediu
m s
cale
ent
erpr
ises
. Und
er th
e te
rms
of th
e gu
idel
ine
(am
ende
d by
a CB
N le
tter
dat
ed 1
1 Ju
ly 2
006)
, the
con
trib
utio
ns w
ill b
e 10
% o
f pro
fit a
fter
tax
and
shal
l con
tinue
aft
er th
e fir
st 5
per
iods
but
ban
ks' c
ontr
ibut
ions
sha
ll
ther
eaft
er re
duce
to 5
% o
f pro
fit a
fter
tax.
How
ever
, thi
s is
no
long
er m
anda
tory
. The
sm
all a
nd m
ediu
m s
cale
indu
strie
s eq
uity
inve
stm
ent s
chem
e
rese
rves
are
non
-dis
trib
utab
le.
Tota
l
Rese
rves
N'0
00
(67,
356,
708)
(2,0
94,6
92)
(69,
451,
400)
Gene
ral
rese
rve
(73,
570,
213)
(2,0
94,6
92)
(75,
664,
905)
N'0
00
Fixe
d as
sets
reva
luat
ion
rese
rve
2,08
8,60
5
-
2,08
8,60
5
N'0
00
Tota
l
Othe
r res
erve
s
4,12
4,90
0
-
4,12
4,90
0
N'0
00
Capi
tal
rese
rve
300,
000
-
300,
000
Synd
icat
ed
loan
rede
mpt
ion
rese
rve
N'0
00
500,
000
-
500,
000
SMEE
IS
rese
rve
N'0
00
526,
908
-
526,
908
Stat
utor
y
rese
rve
N'0
00
2,79
7,99
2
-
2,79
7,99
2
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 7676
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
36 Non-controlling interest
(a) (i) The movement in the non-controlling interest account during the period is shown below:
Group Group Dec. 2009 Mar. 2009
N'000 N'000
Balance, beginning of the period (254,849) 175,701 Cash paid by non-controlling interest - 560,807 Transfer from profit and loss account (766,864) (1,393,413) Reduction of non-controlling interest
(see (ii) below) 18,456 - Increase in minority interest - 322,143 Share of revaluation reserve transferred
from the Group (see note 35(a)(i)) 156,614 79,913
Balance, end of period (846,643) (254,849)
(ii) During the period, the Group acquired additional ordinary shares in Independent Securities Ltd, an indirectsubsidiary of Wema Bank Plc, resulting in the increase in the Group shareholding from 68.85% to 73.25% and reduction of non-controlling interest. Accordingly, the additional net assets acquired has been transferred from non-controlling interest to the Group. The goodwill on the purchase has been recognised in these financial statements. See Note 23(b)(ii).
37 Contingent liabilities, guarantees and other commitments on behalf of customers
(a) Litigations and claims
There are litigation claims against the Bank as at 31 December 2009 amounting to N956,700,815(31 March 2009: N648,401,961). These litigations arose in the normal course of business and are being
contested by the Bank. The Directors, having sought advice of professional counsel, are of the opinion that
no significant additonal liability will crystallise from these claims; other than as recognised in these
Financial statements.
(b) Guarantees and other commitments on behalf of customersIn the normal course of business, the Group is party to financial instruments with off-balance sheet risk. The instruments are used to meet the credit and other financial requirements of customers. The contractual amounts of the off-balance sheet financial instruments are:
Group Group Bank Bank Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
N'000 N'000 N'000 N'000
Guarantees and indeminities 1,661,684 1,933,986 1,661,684 1,933,986 Bonds 404,542 545,869 404,542 545,869 Clean-line facilities & irrevocable - letters of credit 546,171 - 546,171 -
2,612,397 2,479,855 2,612,397 2,479,855
(ii) Included in these guarantees and other commitments on behalf of customers are cash collaterised contingent liabilities of N106,362,106 (March 2009: N39,402,664).
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 7777
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
38 Related Party transactions
(a) A number of banking transactions are entered into with related parties in the normal course of business. These include loans, deposits, placements and off balance sheet transactions. The volumes of related-party transactions, outstanding balances at the period-end was as follows:
(b) Risk assets outstanding as at 31 December 2009 The Bank granted various credit facilities to companies whose directors are also directors of Wema Bank Plc at rates and terms comparable to other facilities in the Bank's portfolio. An aggregate of N15,992,927,000 (31 March 2009: N45,026,587,000) was outstanding on these facilities at the end of theperiod of which N15,743,280,000 (March 2009: N44,591,155,000) was non performing.
Relationship Facility type N '000 Status Nature of Security
Odu'a Invvestment Limited Director/principal shareholder TLF 429,788
Lost Share CertificatesOdu'a Investment Limited Director/principal shareholder ODF 238,490
Lost Share CertificatesOdu'a Telecoms Subsidiary of Odua'a Inv. Company CFF 1,919,044
Lost Share Certificates
Odu'a Telecoms Subsidiary of Odua'a Inv. Company ODF 162,005
LostMortgage Debentures
Odu'a Telecoms Subsidiary of Odua'a Inv. Company CFF 689,456
LostMortgage Debentures
Odu'a Telecoms Subsidiary of Odua'a Inv. Company TLF 100,000
LostMortgage Debentures
Premier Hotel Subsidiary of Odua'a Inv. Company ODF 3,104
Performing Guarantee
Askar Paints Subsidiary of Odua'a Inv. Company TLF 44,358
Performing Corporate GuaranteeAskar Paints Subsidiary of Odua'a Inv. Company ODF 5,869
Performing -Lafia Hotel Subsidiary of Odua'a Inv. Company ODF 5,026
Performing MortgageOasis Plastics Company of Mr. A.J.Adegbite ODF 1,395
Lost DebenturesSimi Nig Limited Company of Chairman of Odu'a Group CFF/PFF 80,844
Lost LM ON LP
Simi Nig Limited Company of Chairman of Odu'a Group ODF 231,298
LostDomiciliation of Payment
Simi Nig Limited Project Fin Fac Company of Chairman of Odu'a Group CFF/PFF 12,883
LostDomiciliation of Payment
Simi Nig Limited Company of Chairman of Odu'a Group ODF 6
Lost LM ON LP
Simi Nig Limited Company of Chairman of Odu'a Group ODF 80,845
Lost LM ON LPWemasec & Finance Limited Subsidiary of Wema Bank Plc ODF 445,351
Doubtful Negative PledgeWemasec & Finance Limited. Subsidiary of Wema Bank Plc TLF 2,260,000
Lost Negative PledgeWema Assets Mgt Limited Subsidiary of Wema Bank Plc ODF 7,910,211
Lost Negative PledgeWemaHomes Osborne/ Parkview Subsidiary of Wema Bank Plc CFF/PFF 44,358
Doubtful -Independent Securities Subsidiary of Wema Bank Plc EQUITY FAC 328,146
Lost Negative PledgeIndependent Securities Subsidiary of Wema Bank Plc EQUITY FAC 207,405
Lost Negative PledgeCrystal Press and Paper Limited. Company of a former director - Late Chief R.F.Giwa TLF 627
Lost Share CertificatesCrystal Press and Paper Limited. Company of a former director - Late Chief R.F.Giwa ODF 7,265
Lost Share CertificatesRufcon Nig. Limited. Company of a former director - Late Chief R.F.Giwa Contract Finance 64,888
Lost Share CertificatesRufus Giwa Former director Contract Finance 199,540
Lost Share Certificates
Aks Steel Nig. Limited.Company of a former director - Alh Olapade Mohammed. ODF 142,254
Performing Debenture
Aks Steel Nig. Limited.Company of a former director - Alh Olapade Mohammed. ELF 49,036
Performing DebentureJohn Jadek Limited. Dir./Guaranteed by Sen.Meroyi LPO 9,682
Lost P.G of Sen.MeroyiChilds Play Books Limited. Companyy of a former director Mr. Tokunbo Ajasin TLF 2,092
Lost LM ON LPPrince A.K.Gbadegesin A former director - Prince Gbadegesin TLF 1,384
Lost Lien on Shares
Newtel Limited.Company of a former director of defunct National Bank - Seye Oladapo TLF 21,440 Lost LM ON LP
Newtel Limited.Company of a former director of defunct National Bank - Seye Oladapo ODF 48,063
Lost Guarantee
Technixs Oilfield Support LimitedCompany of a former director of defunct National Bank - Seye Oladapo and Kola Ayeye TLF 10,891
Lost Guarantee
Integrated Agric Serv.Company of a former director of defunct National Bank - Ayomane Odimayo TLF 7,142
Lost Lien on Shares
Integrated Agric Serv.Company of an ex-director of defunct National Bank - Ayomane Odimayo ODF 87,429 Lost Lien on Shares
Olario Services Limited. Guarantee by an ex-director Alh Olapade Mohammed ODF 7,777 LostDomiciliation of Payment
Mury-Murrison Int'lGuarantee by an ex- director Alh Olapade Mohammed ODF 8,134 Performing EM ON LP
(c) Deposits oustanding as at 31 December 2009.
(i) Director/insiders related deposit liabiilties as at period end amounted to N16,439,000.
(ii) Subsidiaries' deposit account balances with the Bank as at period end amounted to N1,049,837,000 (March 2009: N398,500,000)
Name of company/individual
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 7878
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
N'000 N'000 N'000 N'000
N'000 N'000 N'000 N'000
5,984,128 594,469
- - -
-
- 977,339
1,777,185
(17,810) 64,918
- -
(18,442)
(10,075,087)
(419,028) (222,011)
- - -
-
- (917,200)
1,256,976
65,366 - - -
(181,752)
(3,726,903)
1,629,953 13,475,382
293,500 43,940 95,047
-
(533,987) 1,343,604 1,979,462
(21,547) 49,047
- 11,817
(55,283)
(9,995,277)
5,190,088 499,372 46,410 62,581
145,130
(46,300)
- (897,584)
1,381,991
47,448 -
37,171 -
(201,790)
(2,603,682)
39 (Loss)/earnings per share
number of ordinary shares of 10,195,287,000 (31 March 2009: 10,069,943,000) in issue during the period.
Group Group Bank Bank
Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
9 months 12 months 9 months 12 months
Profit attributable to group shareholders (6,763,434) (19,062,043) (2,094,692) (11,668,408)
Number of ordinary shares in issue as at period end 10,320,631 10,069,943 10,320,631 10,069,943
Weighted average number of ordinary shares for purpose of basic EPS 10,195,287 10,069,943 10,195,287 10,069,943
Basic earnings per share -k (66) (189) (21) (116)
40 Net cash flow from operating activitiesReconciliation of profit before tax to cash generated from operating activities:
Group Group Bank Bank Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
9 months 12 months 9 months 12 months
(Loss)/profit after tax (7,530,298) (20,455,456) (2,094,692) (11,668,408) Add back: taxation charge (1,337,901) (7,850,756) (1,214,562) (7,768,466)
(8,868,199) (28,306,212) (3,309,254) (19,436,874) Adjustments to reconcile profit before
tax to net cash flow from operating activities:
Allowance for bad and doubtful loans Allowance for investments and other assets Allowance on insurance receivables Increase in provision on unexpired risks Increase in life funds Reversal of depreciation on investment property Reversal of allowance for doubtful
insurance receivables (Recovery)/allowance on finance lease Depreciation of property and equipment Loss/(gain) on disposal of property and
equipment Adjustment to fixed assets Impairment of goodwill Write off of fixed assets Dividend income from equity investments
Net cash flow from operating activities
before changes in operating assets
Loss/earnings per share has been computed based on profit after taxation and the weighted average
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9
(Increase)/decrease in operating assets:
Cash reserve balances
Loans and advances
Advances under finance leases
Insurance receivables
Investment securities -short term
Interest receivable and prepayments
Other assets receivable
Increase/(decrease) in operating liabilities:
Customers' deposits
Due to other banks
Customers' deposit for foreign currency denominated obligations
Investment contract liabilities
Insurance contract liabilities
Interest payable and unearned income Other liabilities Outstanding claims
Net cash flow from operating activities
41 Cash and cash equivalents
For the purpose of the statements of cash flows, cash and cash equivalents include cash, treasury bills and other eligible bills, operating account with other banks, amounts due from other banks and short-term government securities.
Cash in hand and balances with CBN (less restricted balances) (see note 11(a))
Treasury bills (see note 12) Due from financial institutions (see note 13)
42 Events after balance sheet date There were no post balance sheet events which could have a material effect on the financial position of the Group as at 31 December 2009 and profit attributable to equity holders on that date which have not been adequately adjusted for or disclosed.
43 Comparatives
Where necessary, comparative figures have been adjusted to conform to changes in presentation in the the current period, as required by the 18 January 2010 CBN circular BSD/DIR/CEN/CIR/04/004 on "minimum information to be contained in the financial statements".
N'000
1,926,054 (7,279,526)
169,963 - -
(376,152) (382,429)
(5,942,090)
(27,737,378) -
427,661 - -
1,875,832 (1,574,457)
-
(27,008,342)
(43,025,519)
Bank Mar. 2009
3,604,345 2,923,425 9,539,964
16,067,734
N'000
812,621 21,472,122 1,282,771
- -
3,217,407 (3,674,676)
23,110,245
(14,116,609) 467,797
(412,746) - -
(55,545) 2,095,846
-
(12,021,257)
7,362,085
Bank Dec. 2009
4,959,716 5,049,245
58,729,492
68,738,453
N'000
1,926,054 1,002,314
490,396 (194,697)
(5,553,798) (536,488)
(2,639,066)
(5,505,285)
(23,500,827) -
427,661 (12,601,807)
2,179,033 5,684,513
44,851
(27,766,576)
(43,267,138)
Group Mar. 2009
3,605,918 2,923,425
13,335,516
19,864,859
N'000
812,621 10,975,317 1,347,651 (172,894)
7,757,322 3,496,734 (721,655)
23,495,096
(14,766,049) 467,797
(412,746) (161,893)
(296,046) (3,001,707)
76,951
(18,093,693)
2,797,721
Group Dec. 2009
4,962,086 5,049,245
60,292,150
70,303,481
7979
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 8080
Notes to the Consolidated Financial Statements cont’dFor the period ended 31 December, 2009
44 Recapitalisation plans
1. Internal and external recovery options – aside from the internal recovery efforts on loans, the Bank also
intends to leverage on the available opportunities provided by the Central Bank of Nigeria as well as
the Asset Management Corporation (AMC) when it is eventually set up and/or;
2. Apply for a regional banking license and/or;
3. Raise additional capital through a special placement offer and/or;
4. A business combination.
Based on the support provided by the CBN to date and, the current and planned actions of the Board as described above, the directors expect the Bank and its subsidiaries to continue as going concerns, realise their assets and discharge their liabilities in the normal course of business. Accordingly, the financial statements are prepared on a
going concern basis.
The Board and Management of the Bank are vigorously pursuing these options with the intention of achieving
adequate capitalization in a manner satisfactory to the CBN.
Given the impending new regulatory guidelines on the universal banking model by the CBN, the Board has
reviewed its recapitalization strategy and is pursuing the following options:
The directors have also estimated income and cash flow projections based on assumptions that represent the directors' best estimates of economic conditions in the short and medium term and the expected outcome of the Board's recapitalisation strategy. Based on these projections, the directors consider that assets are not impaired having regard to the Bank’s accumulated losses. Arising from the projections, the directors expect that it is probable that future taxable profits will be available against which the accumulated tax losses may be utilised and,
accordingly, have retained the deferred tax asset stated above.
The Group and the Bank had a shareholders’ deficit of N44.99 billion and N45.50 billion respectively as at 31
December 2009. These are stated after recognition of the Group and Bank revaluation surplus of N4.25 billion and
N2.09 billion respectively (Note 35) and a Group and Bank deferred tax asset of N20.24 billion and N19.76 billion
respectively (Note 30(b)). The level of shareholder funds is below the N25 billion minimum regulatory capital
requirements set by the Central Bank of Nigeria. During the period, the Central Bank of Nigeria (CBN) provided a
financial accommodation assistance loan amounting to N87 billion (Note 32) to the Bank to address the weak
capital adequacy and liquidity position of the Bank based on the results of the regulatory examination and
mandated the Bank to recapitalize on or before June 30, 2010. The facility qualifies as tier 2 capital and resulted in a capital adequacy ratio of the Bank in excess of the regulatory
requirement of 10% as at 31 December 2009.
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 8181
Financial Risk ManagementFor the period ended 31 December, 2009
(a) Principal credit policies
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(b) Methodology for risk rating
(i)
(ii) The objectives of the internal ratings methodology in Wema Bank include:
(iii) The internal rating methodology is integrated into the Bank’s overall portfolio risk management and provides the basis
for credit risk measurement, monitoring and reporting in the Bank and support management’s and the Board’s decision
making.(iv) Wema Bank’s rating methodology incorporates:
The Bank has established internal ratings methodology to assess the risks of lending to customers including individual borrowers, small businesses, commercial and corporate entities.
? To enable the Bank evaluate/ predict the likelihood that an obligor will default.
? Evaluate the impact of such default on the Bank.
(a) Obligor risk rating: risk that a borrower will not be able to meet required obligations as and when due.
? Financial institutions customers
? Commercial customers
? Public sector customers
(b) Facility risk rating: risk of loss in the event that a borrower defaults on a specific transaction. The risk of loss is usually linked to the availability (recourse), reliability and coverage of pledged collateral.
(c ) The Bank maintains obligor/counter party risk rating systems for the different customer segments based on the unique characteristics of each of the following customer class:
? Corporate customers
? Retail customers
? Consumer customers
Building capacity and improving skill levels to support the Bank’s credit management functions.
The Bank’s credit processing and credit risk management functions are guided by its Credit Policy Manual and Credit Risk Management Framework. The principal credit policies include:
Generating earnings which are commensurate with the Bank risk exposure and meet its target return on assets.
Ensuring compliance with regulatory, legal and statutory measures in the course of lending activities.
Identifying potential problem risk assets and keeping non performing assets and charge offs to the barest minimum
Managing risk asset portfolio effectively and efficiently.
Structuring and developing credit products that meet customers’ requirements but at minimal risks to the Bank.
Defining and adhering to the Bank’s target markets, risk appetite and risk acceptance criteria to guide lending decisions.
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9
(c ) Enterprise Risk Review
? Credit Risk Management
? Operational Risk and Internal Control
? Market Risk Management
? Remedial Asset Management
? definition of strategic objectives
? proactive portfolio planning
? proactive control over money and capital market activities
? proactive account planning
? conduct of consistent portfolio review
? regular conduct of macro economic review
? definition of robust IT-driven operational process
? definition of risk and return preferences
? the Board Risk Management Committee (BRC)
? the Management Risk Committee (MRC)
? the Board Credit Committee (BCC)
? the Management Credit Committee (MCC)
? the Asset and Liability Committee (ALCO)
? the Executive Committee (EXCO)
Credit risk
? Credit Analysis / Credit Quality Assurance Department
? Credit Administration Department
? Loan Review and Monitoring Department
The Bank has also constituted relevant committees and sub-committees of the Board and management to anchor various policy and strategic decisions leading to optimal balancing operations in general and robust risk management practices in particular.
The main board and management risk related committees put in place that deliberate and strategize on risk management issues include:
Credit risk is the primary financial risk in the Banking system and is implied in most income producing activities of the Bank.
with agreed terms. The principal areas where the Bank is exposed to credit risk include; lending, trade finance, leasing, treasury activities and off balance sheet engagement.
Credit risk management is a key component of the Bank’s Enterprise Risk Management structure. The functions are performed by the Credit Risk Management Group, a unit of the Enterprise Risk Management Directorate.
In order to ensure operational convenience, holistic scope and adequacy / effectiveness of preventive and correcting controls, the group is subdivided into three (3) departments namely:
In order to ensure sound risk management practices, the Bank has designed an Enterprise Wide Risk Management Framework as well as set up decentralized robust risk management structures with all encompassing risk managementfunctions cutting across the head office, zonal offices and network of branches. The structure takes the form of an Enterprise Risk Management directorate which supervises four (4) functional groups namely:
Credit risk is defined as the probability that an obligor or counter party will fail to meet its obligations in accordance
The Bank adopts a risk management strategy derived from its corporate vision, mission and objectives which involves:
8282
Financial Risk ManagementFor the period ended 31 December, 2009
cont’d
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9
Credit risk measurement
(i)
Internal rating scale
Grade
AAA
AA
A
BBB
BB
B
CCC
CC
C
D
(ii)
Average Risk. Caution is necessary
Very High Risk. Highly vulnerable to default. Substandard
Extremely High Risk. Doubtful
The Bank also adheres to the regulatory single obligor limit as stipulated by the Central Bank of Nigeria. Limits are also set on the level of credit risk by geographical segment, industry segment and by product.
The Bank also sets internal credit approval limits for various levels of authority in the credit process. The current position as approved by the Board and Management is as shown in the table below:
Bad and Lost
Credit risk limits signify the maximum amount of credit risk the Bank is willing to accept in pursuit of its earnings Objectives.
External rating metrics are used to measure market and liquidity risk exposures to debt securities and other bills.
Risk limit control and mitigation policies
Levels of credit risk undertaken by the Bank are controlled by setting approved credit limits for all loans, advances, investments and off balance sheet engagements.
Measurement of credit risk is of vital importance in the Bank’s credit risk management functions. The Bank adopts qualitative and quantitative techniques to measure the risk inherent in its credit portfolio.
Speculative Grade
Loans and advancesFor measuring credit risk of loans, advances and investments, the Bank makes use of its risk rating criteria which are clearly and precisely defined based on: objectively measurable factors e.g. cash flow capacity, capital adequacy, profitability, liquidity, gearing, return on asset, return on equity, credit history, current exposure and past account performance. Some non numerate criteria are also applied such as character, quality of board and management, type of facility, type / location / value of security / type of customer / sectoral classification etc.
The internal rating methodology incorporates ten (10) rating grades. This is to ensure that risk levels are adequately differentiated. Four (4) grades are classified as investment grades (i.e. AAA - BBB), Three (3) as Speculative grade (i.e. BBB – B) and three (3) as Default grade (i.e. CCC – D) as shown in the table below:
Investment/Lending Grade
High Risk. Vulnerable to default
Best Quality. Extremely Low Risk
Very good. Very Low Risk
Good. Low Risk
Fairly Good. Above Average Risk
Debt Securities and Other Bills
Below Average Risk. Caution is necessary
Default Grade
Description of Grade Remark
8383
Financial Risk ManagementFor the period ended 31 December, 2009
cont’d
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9
? Mortgage Debenture / Legal Mortgage over landed properties
? Debenture over specific assets
? Charges over marketable instruments, securities and accounts receivables
The Bank manages its asset and liability structure with great efficiency so as to ensure ability to honour both cash and contingent commitments as and when due. Levels of undrawn commitments are also closely monitored to ensure effective gap optimization.
Furthermore, in order to ensure credibility and integrity of security valuation, the Bank has limited acceptable security valuation to two (2) prominent accredited estate valuers in Nigeria.
The major types of collateral acceptable for loans and advances include:
Netting / set off arrangementsAnother strategy employed by the Bank for risk mitigation is the netting / set – off concept. Where there are outstanding balances in favour and against a defaulting counter party, the adverse position is settled on a net basis.
Credit related commitments
As part of the Bank’s credit policy, security is taken for all credits granted. In order to ensure adequacy of collateral in the event of default of principal loan and interest the Bank’s policy requires a minimum of 150% coverage ratio fornon-cash collateral.
Collateral
N500 million
N150 million
N20 million
N5 million
Board Credit Committee
Management Credit Committee
Managing Director
Executive Director
Regional Executives
Authority level
Board
Approval Limit
Above N1.5 billion
N1.5 billion
8484
Financial Risk ManagementFor the period ended 31 December, 2009
cont’d
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9
Risk Assets (Loans and Advances, Advances under Finance Leases, off-balance sheet direct credit substitutes etc)
Loans and advances are summarised as follows:
Group Group Bank Bank Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
N'000 N'000 N'000 N'000
Performing 24,656,258 39,196,019 24,212,613 46,880,990
Non-Performing
Substandard 4,423,007 2,289,850 3,826,049 2,253,762
Doubtful 1,974,119 10,970,098 1,743,759 2,498,171
Lost 64,213,529 75,382,746 64,337,480 107,958,918
TOTAL 95,266,913 127,838,713 94,119,901 159,591,841
(e) Performing but past due loans
Loans and advances less than 90 days past due are considered performing, unless other information is available to indicate the
contrary. Gross amount of loans and advances by class to customers that were past due but performing were as follows:
Group
Corporate Retail Commercial Total
As at 31 December 2009 Dec. 2009 Dec. 2009 Dec. 2009 Dec. 2009
N'000 N'000 N'000 N'000
Not yet due 12,318,335 2,367,425 6,197,108 20,882,868
Past due 0 - 30 days 218,971 53,683 - 272,654
Past due up to 30 - 60 days 404,239 28,245 50,938 483,423
Past due up to 60 - 90 days 2,545,561 471,752 - 3,017,313
15,487,106 2,921,105 6,248,046 24,656,258
Group
Corporate Retail Commercial Total
As at 31 March 2009 Mar. 2009 Mar. 2009 Mar. 2009 Mar. 2009
N'000 N'000 N'000 N'000
Not yet due 12,719,969 2,016,397 11,372,225 26,108,591
Past due 0 to 30 days 1,492,378 2,831,959 711,918 5,036,256
Past due up to 30 - 60 days 5,279,448 303,089 - 5,582,536
Past due up to 60 - 90 days 1,374,914 1,093,722 - 2,468,636
20,866,709 6,245,167 12,084,143 39,196,019
8585
Financial Risk ManagementFor the period ended 31 December, 2009
cont’d
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9
Bank
Corporate Retail Commercial Total
As at 31 December 2009 Dec. 2009 Dec. 2009 Dec. 2009 Dec. 2009
N'000 N'000 N'000 N'000
Not yet due 14,842,037 2,528,644 6,246,811 23,617,492
Past due 0 - 30 days 210,401 - - 210,401
Past due up to 30 - 60 days 384,720 - - 384,720
Past due up to 60 - 90 days - - - -
15,437,158 2,528,644 6,246,811 24,212,613
Bank
Corporate Retail Commercial Total
As at 31 March 2009 Mar. 2009 Mar. 2009 Mar. 2009 Mar. 2009
N'000 N'000 N'000 N'000
Not yet due 23,154,622 6,117,969 12,048,415 41,321,006
Past due 0 to 30 days 1,166,190 - - 1,166,190
Past due up to 30 - 60 days 4,393,794 - - 4,393,794
Past due up to 60 - 90 days - - - -
28,714,606 6,117,969 12,048,415 46,880,990
Non-performing loans by industry
Group Group Bank Bank Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
N'000 N'000 N'000 N'000
Agriculture 632,220
General commerce 28,082,811
Consumer Credit 9,902,758
Manufacturing 2,458,379
Mining, Oil and Gas 5,476,861
Real Estate and Construction 9,379,460
Credit and Financial Institutions 3,471,126
Transportation and Communication 5,716,638
Education 71,225
Government 1,264,673
Others 4,154,504
TOTAL 70,610,655
396,708
2,263,432
29,368,220
259,326
2,870,455
503,765
5,093,271
9,664,211
28,674,208
4,330,067
5,219,030
88,642,694
632,220
28,075,791
2,331,996
2,330,583
5,476,861
8,870,245
12,462,035
5,716,638
71,225
1,264,673
2,675,021
69,907,288
396,708
2,253,932
22,281,327
259,326
2,870,455
83,650
41,043,318
6,172,942
28,674,208
4,330,067
4,344,917
112,710,851
8686
Financial Risk ManagementFor the period ended 31 December, 2009
cont’d
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 8787
Financial Risk ManagementFor the period ended 31 December, 2009
cont’d
Non-performing advances by industry
Group Group Bank Bank Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
N'000 N'000 N'000 N'000
Agriculture - 4,107 - 4,107
General Commerce 70,026 37,705 70,026 37,705
Consumer Credit 467,919 1,000,771 907 1,000,771
Manufacturing 67,924 53,179 67,924 53,179
Mining, Oil and Gas - 359,930 - 359,930
Real Estate and Construction 35,072 29,539 35,072 29,539
Credit and Financial Institutions 2,823 - 2,823 -
Transportation and Communication 328,975 - 328,975 -
Education 3,198 568,158 3,198 444,702
Government - - - -
Others 240 331,540 240 40,930
TOTAL 976,177 2,384,928 509,165 1,970,862
Non-performing loans by geography
Group Group Bank Bank Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
N'000 N'000 N'000 N'000
Abuja & North Central 11,937,294 6,698,561 2,730,425 6,698,561 North East 246,328 243,254 246,328 169,528 North West 221,736 930,087 221,736 930,087 South East 3,517,555 121,145 3,517,555 121,145 South South 8,826,674 12,589,496 4,651,708 12,589,496 South West 45,861,068 68,060,150 58,539,536 92,202,033
TOTAL 70,610,655 88,642,694 69,907,288 112,710,851
Non-performing advances by geography
Group Group Bank Bank Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
N'000 N'000 N'000 N'000
Abuja & North Central - - - - North East - - - - North West - - - - South East - - - - South South 245,325 794,088 2,141 594,676 South West 730,852 1,590,840 507,024 1,376,186
TOTAL 976,177 2,384,928 509,165 1,970,862
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9
(f) Concentration of risks of financial assets with credit risk exposure
(i) Geographical sectors
The following table breaks down the Group’s main credit exposure at their carrying amounts, as categorised by geographical region as of 31 December 2009. For this table, the Group has allocated exposures to regions based on the region of domicile of our counterparties.
Group
Due from Loans Advances under Debt Totalfinancial institutions finance lease Instruments
As at 31 December 2009 Dec. 2009 Dec. 2009 Dec. 2009 Dec. 2009 Dec. 2009
N'000 N'000 N'000 N'000 N'000
Abuja & North Central - 10,260,667 - - 10,260,667 North East - 501,463 - - 501,463 North West - 307,306 - - 307,306 South East - 2,921,202 - - 2,921,202 South South - 1,690,421 465,102 - 2,155,523 South West 58,191,670 79,585,853 967,502 - 138,745,025 Outside Nigeria 2,100,480 - - - 2,100,480
60,292,150 95,266,913 1,432,604 - 156,991,667
Group
Due from Loans Advances under Debt Totalfinancial institutions finance lease Instruments
As at 31 March 2009 Mar. 2009 Mar. 2009 Mar. 2009 Mar. 2009 Mar. 2009
N'000 N'000 N'000 N'000 N'000
Abuja & North Central - 10,947,302 - - 10,947,302 North East - 262,459 - - 262,459 North West - 506,554 - - 506,554 South East - 13,258,543 1,931,322 - 15,189,865 South South - 1,417,016 31,378 - 1,448,394 South West 11,456,026 133,199,967 1,344,325 - 146,000,318
Outside Nigeria 1,879,490 - - - 1,879,490
13,335,516 159,591,841 3,307,025 - 176,234,382
Bank Due from Loans Advances under Debt Total
financial institutions finance lease Instruments
As at 31 December 2009 Dec. 2009 Dec. 2009 Dec. 2009 Dec. 2009 Dec. 2009
N'000 N'000 N'000 N'000 N'000
Abuja & North Central - 5,904,537 - - 5,904,537
North East - 501,463 - - 501,463 North West - 307,306 - - 307,306 South East - 2,921,202 - - 2,921,202 South South 906,439 2,366 908,805 South West 56,629,012 83,578,953 962,083 - 141,170,048 Outside Nigeria 2,100,480 - - - 2,100,480
58,729,492 94,119,901 964,449 - 153,813,842
8888
Financial Risk ManagementFor the period ended 31 December, 2009
cont’d
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 8989
Financial Risk ManagementFor the period ended 31 December, 2009
cont’d
Bank
As at 31 March 2009
Abuja & North Central - 8,386,980 - - 8,386,980 North East - 262,459 - - 262,459 North West - 506,554 - - 506,554 South East - 14,818,159 1,681,322 - 16,499,481 South South - 516,577 3,172 - 519,749 South West 7,669,474 135,101,112 1,089,496 - 143,860,082 Outside Nigeria 1,879,490 - - - 1,879,490
9,548,964
159,591,841 2,773,990 - 171,914,795
Group
Industry SectorsDue from Loans Advances under Debt Total
financial institutions finance lease Instruments
As at 31 December Dec. 2009 Dec. 2009 Dec. 2009 Dec. 2009 Dec. 2009
N'000 N'000 N'000 N'000 N'000
Agriculture -
680
-
920,543 General Commerce -
404,466
-
38,279,271
Consumer Credit -
6,743
-
11,696,901 Manufacturing -
404,193
-
10,181,138
Mining, Oil and Gas -
15,318
-
6,631,134 Real Estate and Construction -
35,072
-
5,280,011
Credit and Financial Institutions 60,292,150
2,823
-
65,271,046 Transportation and Communication -
456,511
-
7,949,066
Education -
4,150
-
1,291,194 Government -
1,752
-
344,214
Others -
100,897 - 9,147,150
60,292,150
919,86337,874,80511,690,1589,776,9456,615,8165,244,939
4,976,0737,492,5561,287,044
342,4619,046,253
95,266,913
1,432,604
-
156,991,668
Group
Due from Advances under Debtfinancial institutions Loans finance lease Instruments Total
As at 31 March 2009 Mar. 2009 Mar. 2009 Mar. 2009 Mar. 2009 Mar. 2009
N'000 N'000 N'000 N'000 N'000
Agriculture -
1,065,460
12,213
-
1,077,673
General Commerce 11,456,026
27,101,117
1,764,746
-
40,321,889
Consumer Credit -
12,601,477
18,346
-
12,619,823
Manufacturing -
12,690,045
728,969
-
13,419,014
Mining, Oil and Gas -
6,751,784
15,509
-
6,767,293
Real Estate and Construction -
5,112,950
35,727
-
5,148,676
Credit and Financial Institutions 1,879,490
23,265,002
5,948
-
25,150,440
Transportation and Communication -
8,608,611
532,438
-
9,141,049
Education -
443,944
4,150
-
448,094
Government -
5,595,458 4,448 - 5,599,906Others -
24,147,867 184,530 - 24,332,398
13,335,516 127,383,713 3,307,025 - 144,026,254
Due from Loans Advances under Debt Totalfinancial institutions finance lease Instruments
Mar. 2009 Mar. 2009 Mar. 2009 Mar. 2009 Mar. 2009
N'000 N'000 N'000 N'000 N'000
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 9090
Financial Risk ManagementFor the period ended 31 December, 2009
cont’d
Bank
(ii) Industry Sectors
As at 31 December 2009
Agriculture - 919,863 680 - 920,543
General Commerce - 30,811,524 392,473 - 31,203,997
Consumer Credit - 5,464,960 6,743 - 5,471,703 Manufacturing - 9,776,945 404,193 - 10,181,138 Mining, Oil and Gas - 6,615,816 15,318 - 6,631,134 Real Estate and Construction - 3,418,610 35,072 - 3,453,682 Credit and Financial Institutions 58,729,492 3,153,784 2,823 - 61,886,098 Transportation and Communication - 7,492,556 348 - 7,492,904 Education - 1,287,044 4,150 - 1,291,194
Government - 342,461 1,752 - 344,214 Others - 24,836,337 100,897 - 24,937,234
58,729,492 94,119,901 964,449 - 153,813,842
Bank
As at 31 March 2009
Agriculture - 1,065,460 12,213 - 1,077,673 General Commerce - 37,838,078 1,760,977 - 39,599,055
Consumer Credit - 6,168,213 18,346 - 6,186,559
Manufacturing - 12,690,045 728,969 - 13,419,014
Mining, Oil and Gas - 6,751,784 15,509 - 6,767,293 Real Estate and Construction - 3,502,751 35,727 - 3,538,477 Credit and Financial Institutions 9,539,964 21,028,035 5,948 - 30,573,947 Transportation and Communication - 8,608,611 3,173 - 8,611,784 Education - 443,944 4,150 - 448,094
Government - 5,595,458 4,448 - 5,599,906 Others - 55,899,463 184,530 - 56,083,994
9,539,964 159,591,841 2,773,990 - 171,905,795
Analysis of Loans and Advances by Portfolio Distribution and Risk Rating
As at 31 December Group Group Bank Bank Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009
Risk rating N'000 N'000 N'000 N'000
AAA - BBB 11,226,988 25,513,105 10,926,046 27,348,860 BB - CCC 10,481,887 12,187,116 10,057,326 12,187,116 CC - D 59,464,618 60,032,548 61,240,148 98,708,591 Unrated 14,093,421 30,105,944 11,896,382 21,347,274
Total 95,266,913 127,838,713 94,119,901 159,591,841
Due from Loans Advances under Debt Totalfinancial institutions finance lease Instruments
Dec. 2009 Dec. 2009 Dec. 2009 Dec. 2009 Dec. 2009
N'000 N'000 N'000 N'000 N'000
Due from Loans Advances under Debt Totalfinancial institutions finance lease Instruments
Dec. 2009 Dec. 2009 Dec. 2009 Dec. 2009 Dec. 2009
N'000 N'000 N'000 N'000 N'000
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9
(g) Report on market and liquidity risk management
Market risk
Market Risk is defined as the risk to the Bank’s financial condition arising from adverse movements in interest rates,
Currency exchange rates, equity prices and commodity prices. The Bank’s approach to market risk management is based on:
1. Risk strategy.
2. Identification, assessment and measurement.
3. Validation and control, using various strategic tools including limit monitoring, stress testing, marking to market and
sensitivity analysis.
4. Systems requirements.
5. Governance and organisation/management oversight.
6. Capital allocation.
The Bank defines, reviews and articulates market risk appetite to:
1. Guide the limits of all assets creation and liability assumption in trading and investment activities.
2. Provide clarity on the nature of market risk the Bank is willing to undertake.
3. Enable monitoring of activities of both the trading and banking books.
4. Ensure that total market risk exposure does not exceed risk taking capacity at any point in time
From the defined risk appetite, the Bank distill major elements of market risk return preference involving:
- Market risk indicators and limits.
- Market risk rating metrics.
Our trading and dealing activities are guided by the trading mandate which is subject to Board approval.
- Trading Strategies, trading positions, instruments and portfolio are clearly reviewed, documented and consistently
approved by the Asset and Liability Committee (ALCO) to cover money market, capital market and foreign exchange
activities such as:
Purchase and sale of treasury bills.
Purchase and sale of commercial paper.
Purchase and sale of bankers acceptance.
Purchase and sale of stocks.
Purchase and sale of bonds.
Foreign currency transactions.
Security repurchase agreements e.t.c.
Liquidity risk
Wema Bank defines liquidity risk as possibility of loss arising from either its inability to meet its obligations or fund
increase in assets as they fall due without incurring unacceptable costs/ losses or risk of loss arising from adverse
movement of rates in the course of efforts to close a liquidity gap from market activities.
The bank approaches liquidity risk management from two perspectives as follows:
- Funding liquidity risk.
- Trading liquidity risk.
The bank’s liquidity risk management is aimed at utilizing the potential from both sides of the balance sheet and
optimizing all available resources while taking into account the risks associated with each type of liquidity source to
control and prevent inability to meet financial obligations as and when due.
9191
Financial Risk ManagementFor the period ended 31 December, 2009
cont’d
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 9292
Financial Risk ManagementFor the period ended 31 December, 2009
cont’d
The bank identified typical causes of liquidity risk as including cash flow mismatch arising from:
- Portfolio characteristics.
- Asset and liability mixes in the bank’s on and off balance sheet positions.
- Foreign currency portfolio.
- Other risk areas such as credit, operational, market, reputational and strategic risks.
Operational risk management
Wema Bank defines operational risk as the risk of loss resulting from inadequate or failed internal process, people,
systems or external events. Sources of operational risk exposure to the Bank include, people management, errors, frauds,
process design flaws, degraded performance in IT systems, software , infrastructures, contractual control etc. Our approach
to management of operational risk involves the use of the following tools and methodologies:
- Business continuity management.
- Disaster recovery planning.
- Outsourcing.
- Information security.
- Key risk indicators.
- Compliance and legal risk management.
- Internal and external loss data capture.
The bank will use two major approaches for operational risk identification i.e risk mapping and risk categorization while
capital allocation for operational risk will be based on the standardized approach. The bank has also commenced
management of its reputational, legal, strategic and compliance risks.
Strategy risk
Strategic risk is defined as the risk of incurring an economic loss as a result of adverse impact of internal and external
factors on the bank’s earnings and/or ability to achieve its strategic objectives. The factors may include:
- Ineffective/ inadequate corporate business strategy.
- Improper implementation of corporate business strategy.
- Defective strategic management systems.
- Competitive environment.
- Economic environment.
- Regulatory factors.
- Socio-Political factors.
The bank’s Corporate Planning and Development Department undertakes the duty of identifying Strategic Risk Drivers
(SRD) across the external and internal environments. Our strategic risk management approach includes:
1. Identifying material Strategic Risk Drivers (SRD)
2. Assessing likelihood of occurrence of each Strategic Risk Driver (SRD)
3. Deciding and implementing management action.
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 9393
Financial Risk ManagementFor the period ended 31 December, 2009
cont’d
Foreign exchange risk
The Group takes on exposure to the effects of fluctuations in the prevailing foreign currency exchange rates on its financial position and cash flows. The Board sets limits on the level of exposure by currency and in aggregate for both overnight and intra-day positions, which are monitored daily. The table below summarises the Group’s exposure to foreign currency exchange rate risk as at 31 December, 2009. Included in the table are the Group’s assets and liabilities at carrying amounts, categorised by currency.
Group
31 December 2009 Naira
Dec 2009
N'000
Dollar
Dec 2009
N'000
GBP
Dec 2009
N'000
Euro
Dec 2009
N'000
Others
Dec 2009
N'000
Carrying amount
Dec 2009
N'000Assets:Cash and balances with Central Banks 5,797,635 279,704 181,630 94,110 1,127 6,354,206 Treasury bills 5,049,245 - - - - 5,049,245 Due from other banks 58,191,670 1,501,129 106,995 211,148 281,207 60,292,150 Loans and advances to customers 30,001,550 - - - - 30,001,550 Advances under finance lease 463,206 - - - - 463,206 Insurance receivables 212,049 - - - - 212,049 Investment securities 3,874,052 - - - - 3,874,052 Investment in subsidiaries - - - - - - Goodwill - - - - - - Deferred tax assets 20,242,539 - - - - 20,242,539
Other assets 5,914,523 49,730 - - - 5,964,253
Investment property 4,198,020 - - - - 4,198,020 Property and Equipment 14,284,971 - - - - 14,284,971
Total financial assets 148,229,460 1,830,562 288,626 305,259 282,334 150,936,241
Liabilities:Customer deposits 92,653,634 1,405,330 - - - 94,058,964 Due to other banks 467,797 - - - - 467,797
Claims payable 205,017 - - - - 205,017
Liability on investment contracts 443,422 - - - - 443,422
Liabilities on insurance contracts 985,051 - - - - 985,051 Other borrowings 88,672,659 - - - - 88,672,659 Current income tax 406,245 - - - - 406,245 Other liabilities 10,506,567 669,414 6,542 13,433 (322) 11,195,634 Deferred income tax liabilities 277,620 - - - - 277,620 Retirement benefit obligations 61,803 - - - - 61,803
Total liabilities 194,679,816 2,074,744 6,542 13,433 (322) 196,774,212
Net on-balance sheet financial position (46,450,355) (244,181) 282,084 291,826 282,656 (45,837,971)
Off balance sheet 2,066,226 546,171 - - - 2,612,397
31 March 2009 Naira Dollar GBP Euro OthersCarrying Amount
N'000 N'000 N'000 N'000 N'000 N'000
Total financial assets 127,032,721 1,559,310 146,004 177,011 693,846 129,608,892 Total financial liabilities 167,547,931 1,952,233 35,191 148,419 101,933 169,785,708
Net on-balance sheet financial position (40,515,210) (392,923) 110,813 28,592 591,913 (40,176,816)
Off balance sheet 2,479,855 - - - - 2,479,855
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 9494
Financial Risk ManagementFor the period ended 31 December, 2009
cont’d
Bank
Concentrations of currency risk – on- and off-balance sheet financial instruments
31 December 2009 Naira Dollar GBP Euro Others Carrying amount
N'000 N'000 N'000 N'000 N'000 N'000
Assets:
Cash and balances with central banks 5,295,265 279,704 181,630 94,110 1,127 5,851,836
Treasury bills 5,049,245 - - - - 5,049,245
Due from other banks 56,629,012 1,501,129 106,995 211,148 281,207 58,729,492
Loans and advances to customers 28,636,557 - - - - 28,636,557
Advances under finance lease 456,882 - - - - 456,882
Insurance receivables - - - - - -
Investment securities 2,464,782 - - - - 2,464,782
Investment in subusidiaries 2,894,479 - - - - 2,894,479
Goodwill - - - - - -
Other assets 5,675,503 49,730 - - - 5,725,233
Property and Equipment 13,217,865 - - - - 13,217,865
Deferred tax asset 19,759,352 - - - - 19,759,352
Total financial assets 140,078,942 1,830,562 288,626 305,259 282,334 142,785,723
Liabilities:
Customer deposits 93,385,744 1,405,330 - - - 94,791,074
Due to other banks 467,797 - - - - 467,797
Finance lease obligations - - - - - -
Current income tax 224,081 - - - - 224,081
Other liabilities 4,279,553 669,414 6,542 13,433 4,968,942
Deferred tax liabilities - - - - - -
Debt securities in issue - - - - - -
Other borrowings 87,779,538 - - - - 87,779,538
Retirement Benefit Obligations 53,405 - - - - 53,405
Total liabilities 186,136,714 2,074,744 6,542 13,433 - 188,284,837
Net on-balance sheet financial position (46,057,772) (244,182) 282,084 291,826 282,334 (45,499,114)
Off balance sheet 2,066,226 546,171 - - - 2,612,397
31 March 2009 Naira Dollar GBP Euro Others
N'000 N'000 N'000 N'000 N'000 N'000
Total financial assets 108,405,442 1,559,310 146,004 177,011 693,847 110,981,613
Total financial liabilities 153,372,489 1,952,233 35,191 148,419 101,933 155,610,265
Net on-balance sheet financial position (44,967,047) (392,923) 110,812 28,592 591,914 (44,628,652)
Off balance sheet 2,479,855 - - - - 2,479,855
Carrying amount
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9
31 March 2009 Naira Dollar GBP Euro Others Carrying amt
N'000 N'000 N'000 N'000 N'000
Assets:
Cash and balances with central banks 4,858,433 450,654 - - - 5,309,086
Treasury bills 2,923,425 - - - - 2,923,425
Due from other banks 7,660,474 862,629 146,004 177,011 693,847 9,539,964
Loans and advances to customers 49,689,651 - - - - 49,689,651
Advances under finance lease 822,453 - - - - 822,453
Investment securities 2,464,782 - - - - 2,464,782
Investment in subsidiaries 2,894,479 - - - - 2,894,479
Other assets 4,799,925 246,028 - - - 5,045,954
Property and equipment 13,780,071 - - - - 13,780,071
Deferred Tax assets 18,511,749 - - - - 18,511,749
Total financial assets 108,405,441 1,559,310 146,004 177,011 693,847 110,981,613
Liabilities:
Customer deposits 106,927,723 1,456,926 - - - 108,384,649
Due to other banks - - - - - -
Finance lease obligations - - - - - -
Current income tax 191,040 - - - - 191,040
Other liabilities 6,410,539 495,308 35,191 148,419 101,933 7,191,390
Deferred tax liabilities - - - - - -
Retirement benefit obligations 48,154 - - - - 48,154
Debt securities in issue - - - - - -
Other borrowings 39,795,033 - - - - 39,795,033
Total liabilities 153,372,489 1,952,233 35,191 148,419 101,933 155,610,265
Net on-balance sheet financial position (44,967,048) (392,923) 110,812 28,592 591,914 (44,628,652)
Off balance sheet 2,479,855 - - - - 2,479,855
9595
Financial Risk ManagementFor the period ended 31 December, 2009
cont’d
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 9696
Financial Risk ManagementFor the period ended 31 December, 2009
cont’dM
atur
ity P
rofil
e -
On
Bala
nce
Shee
t
Gro
up
Up t
o 1
1 -
33
- 6
6 -
121
- 5
Ove
r 5
Tota
lCa
rryi
ng v
alue
31
Dec
embe
r 20
09
mon
thm
onth
sm
onth
sm
onth
sye
ars
year
sN
'000
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
N'0
00
Cash
and
bal
ance
s w
ith C
entr
al B
anks
5,85
4,20
6
-
-
-
-
50
0,00
0
6,35
4,20
6
6,35
4,20
6
Trea
sury
bill
s25
0,50
0
2,00
0
4,
796,
745
-
-
-
5,04
9,24
5
5,04
9,24
5
Due
from
oth
er b
anks
42,6
99,5
17
16,7
34,8
17
-
857,
816
-
-
60
,292
,150
60,2
92,1
50
Loan
s an
d ad
vanc
es t
o cu
stom
ers
53,4
71,9
15
1,48
6,79
8
3,21
6,87
0
1,
629,
037
17,0
40,1
52
18,4
22,1
40
95,2
66,9
13
30
,001
,550
Adva
nces
und
er fi
nanc
e le
ase
138,
432
52
,725
68
,371
15,6
82
30
1,64
8
855,
746
1,
432,
604
46
3,20
6
Insu
ranc
e re
ceiv
able
s-
212,
049
-
-
-
-
212,
049
212,
049
Inve
stm
ent
secu
ritie
s-
-
228,
536
2,
490,
000
6,81
1,74
3
-
9,
530,
279
3,
874,
052
Inve
stm
ent
in s
ubsi
diar
ies
-
-
-
-
-
-
-
-
Inve
stm
ent
in a
ssoc
iate
s-
-
-
-
-
-
-
-
Goo
dwill
-
-
-
-
-
-
-
-
Def
erre
d ta
x as
set
-
-
-
-
20
,242
,539
-
20
,242
,539
20,2
42,5
39
Oth
er a
sset
s9,
558,
243
877,
074
438,
713
65
,195
308,
666
19
3,27
5
11,4
41,1
67
5,
964,
253
Inve
stm
ent
prop
erty
-
-
-
-
50
2,68
1
3,69
5,33
9
4,
198,
020
4,
198,
020
Prop
erty
and
Equ
ipm
ent
-
-
-
-
13
,549
,115
11
,618
,508
25
,167
,623
14,2
84,9
71
Tota
l ass
ets
111,
972,
813
19
,365
,464
8,
749,
236
5,05
7,73
0
58
,756
,544
35
,285
,008
23
9,18
6,79
5
150,
936,
241
Liab
iliti
es
Cust
omer
dep
osits
57,9
38,4
33
25,9
97,8
71
7,56
3,25
9
2,
004,
266
555,
135
-
94
,058
,964
94,0
58,9
64
Due
to
othe
r ba
nks
467,
797
-
-
-
-
-
46
7,79
7
46
7,79
7
Clai
ms
paya
ble
-
-
27
,496
150,
951
26
,570
-
205,
017
205,
017
Liab
ility
on
inve
stm
ent
cont
ract
s-
-
443,
422
-
-
-
44
3,42
2
44
3,42
2
Liab
ilitie
s on
insu
ranc
e co
ntra
cts
14,2
80
-
59
5,87
8
149,
310
22
5,58
4
-
985,
051
985,
051
Oth
er b
orro
win
gs-
-
-
-
893,
121
87
,779
,538
88
,672
,659
88,6
72,6
59
Curr
ent
inco
me
tax
-
52
,277
25
8,85
5
95,1
13
-
-
40
6,24
5
40
6,24
5
Oth
er li
abili
ties
6,99
1,19
8
56
5,35
2
2,
120,
406
880,
725
62
5,95
4
12,0
00
11
,195
,634
11,1
95,6
34
Def
erre
d in
com
e ta
x lia
bilit
ies
-
-
-
27
7,62
0
-
-
277,
620
277,
620
Retir
emen
t be
nefit
obl
igat
ions
-
-
-
61
,803
-
-
61,8
03
61,8
03
Tota
l lia
bilit
ies
65,4
11,7
08
26,6
15,5
00
11,0
09,3
15
3,61
9,78
7
2,
326,
364
87,7
91,5
38
196,
774,
212
19
6,77
4,21
2
Gap
(46,
561,
106)
7,
250,
036
2,
260,
080
(1,4
37,9
43)
(5
6,43
0,18
0)
52,5
06,5
30
(42,
412,
583)
45,8
37,9
71
Ass
ets:
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 9797
Financial Risk ManagementFor the period ended 31 December, 2009
cont’d
Ban
k
31 D
ecem
ber
2009
Up t
o 1
1 -
33
- 6
6 -
121
- 5
Ove
r 5
Tota
lCa
rryi
ng v
alue
mon
thm
onth
sm
onth
sm
onth
sye
ars
year
s
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
Cash
and
bal
ance
s w
ith c
entr
al b
anks
5,85
1,83
6
-
-
-
-
-
5,
851,
836
5,
851,
836
Trea
sury
bill
s25
0,50
0
2,00
0
4,
796,
745
-
-
-
5,04
9,24
5
5,04
9,24
5
Due
from
oth
er b
anks
48,2
29,4
92
10,5
00,0
00
-
-
-
-
58,7
29,4
92
58
,729
,492
Loan
s an
d ad
vanc
es t
o cu
stom
ers
53,0
66,3
72
1,41
7,88
8
3,12
7,23
0
1,
440,
898
16,6
45,3
72
18,4
22,1
40
94,1
19,9
01
28
,636
,557
Adva
nces
und
er fi
nanc
e le
ase
197,
048
52
,725
68
,371
15,6
82
30
1,64
8
328,
975
96
4,44
9
45
6,88
2
Inve
stm
ent
secu
ritie
s-
-
-
-
4,86
6,01
1
-
4,
866,
011
2,
464,
782
Inve
stm
ent
in s
ubsi
diar
ies
-
-
-
-
-
2,
894,
479
2,89
4,47
9
2,89
4,47
9
Oth
er a
sset
s8,
625,
363
600,
964
5,34
2
12
,991
308,
666
19
3,27
5
9,74
6,60
0
5,72
5,23
3
Prop
erty
and
equ
ipm
ent
-
-
-
-
10
,130
,543
13
,032
,697
23
,163
,240
13,2
17,8
65
Def
erre
d Ta
x as
set
-
-
-
-
19
,759
,352
-
19
,759
,352
19,7
59,3
52
Tota
l ass
ets
116,
220,
610
12
,573
,577
7,
997,
688
1,46
9,57
1
52
,011
,592
34
,871
,565
22
5,14
4,60
4
142,
785,
723
Liab
iliti
es:
Cust
omer
dep
osits
68,3
67,7
62
20,1
87,3
25
6,14
5,54
8
88
,489
1,95
0
-
94
,791
,074
94,7
91,0
74
Due
to
othe
r ba
nks
467,
797
-
-
-
-
-
46
7,79
7
46
7,79
7
Fina
nce
leas
e ob
ligat
ions
-
-
-
-
-
-
-
-
Deb
t se
curit
ies
in is
sue
-
-
-
-
-
-
-
-
Oth
er b
orro
win
gs-
-
-
-
-
87,7
79,5
38
87,7
79,5
38
87
,779
,538
Curr
ent
inco
me
tax
-
-
19
1,04
0
33,0
41
-
-
22
4,08
1
22
4,08
1
Div
iden
d pa
yabl
e-
-
-
-
-
-
-
-
Oth
er li
abili
ties
3,44
2,87
8
53
4,64
7
72
1,92
6
269,
490
-
-
4,
968,
942
4,
968,
942
Def
erre
d ta
x lia
bilit
ies
-
-
-
-
-
-
-
-
Retir
emen
t be
nefit
obl
igat
ions
-
-
53
,405
-
-
53,4
05
53,4
05
Tota
l lia
bilit
ies
72,2
78,4
37
20,7
21,9
72
7,05
8,51
4
44
4,42
5
1,95
0
87
,779
,538
18
8,28
4,83
7
188,
284,
837
Gap
43,9
42,1
73
(8,1
48,3
95)
93
9,17
4
1,02
5,14
6
52
,009
,642
(5
2,90
7,97
3)
36,8
59,7
67
(4
5,49
9,11
4)
Ass
ets:
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9
Gro
up
9898
Financial Risk ManagementFor the period ended 31 December, 2009
cont’d
31 M
arch
200
9Up
to
11
- 3
3 -
66
-12
1 -
5 ye
ars
Ove
r 5
Tota
lCa
rryi
ng v
alue
mon
thm
onth
sm
onth
sm
onth
sye
ars
Mat
urit
y Pr
ofile
- O
n B
alan
ce S
heet
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
Ass
ets:
Cash
and
bal
ance
s w
ith C
entr
al B
anks
5,31
0,65
9
-
-
-
-
50
0,00
0
5,81
0,65
9
5,81
0,65
9
Trea
sury
bill
s43
8
49
3,68
9
2,
429,
298
-
-
-
2,92
3,42
5
2,92
3,42
5
Due
from
oth
er b
anks
11,3
45,5
80
1,14
0,95
6
-
848,
980
-
-
13
,335
,516
13,3
35,5
16
Loan
s an
d ad
vanc
es t
o cu
stom
ers
120,
523,
932
4,
270,
131
4,
465,
713
5,04
2,72
4
15
,626
,074
9,
663,
266
159,
591,
841
46
,166
,955
Adva
nces
und
er fi
nanc
e le
ase
276,
429
13
,861
85
,262
32,8
54
77
5,08
2
2,12
3,53
7
3,
307,
025
91
3,27
2
Insu
ranc
e re
ceiv
able
s-
-
85,5
65
-
-
-
85
,565
85
,565
Inve
stm
ent
secu
ritie
s-
-
33,0
06,4
01
620,
740
3,
679,
873
5,05
6,78
2
42
,363
,796
14,6
96,7
65
Goo
dwill
-
-
-
-
-
-
-
-
Def
erre
d ta
x as
set
-
-
-
-
18
,843
,223
-
18
,843
,223
18,8
43,2
23
Oth
er a
sset
s10
,358
,393
78
4,76
3
48
5,66
3
2,36
7,53
3
24
3,31
6
99,1
22
14
,338
,790
8,96
7,68
2
Inve
stm
ent
prop
erty
-
-
-
-
51
7,85
1
2,51
4,50
0
3,
032,
351
3,
032,
351
Prop
erty
and
Equ
ipm
ent
-
-
-
-
10
,876
,004
13
,602
,544
24
,478
,548
14,8
33,4
79
Tota
l ass
ets
147,
815,
431
6,
703,
400
40
,557
,902
8,
912,
832
50,5
61,4
23
33,5
59,7
51
288,
110,
739
12
9,60
8,89
2
Liab
iliti
es
Cust
omer
dep
osits
70,4
56,4
37
27,4
80,8
68
9,81
7,22
2
75
9,89
3
310,
593
-
10
8,82
5,01
3
108,
825,
013
Due
to
othe
r ba
nks
-
-
-
-
-
-
-
-
Clai
ms
paya
ble
11,9
47
27
,204
67
,426
7,74
0
13
,750
-
128,
066
128,
066
Fina
nce
Leas
e ob
ligat
ions
-
-
-
-
-
-
-
-
Liab
ility
on
inve
stm
ent
cont
ract
s-
-
605,
315
-
-
-
60
5,31
5
60
5,31
5
Liab
ilitie
s on
insu
ranc
e co
ntra
cts
-
-
31
4,81
5
115,
630
34
6,89
5
-
777,
340
777,
340
Oth
er b
orro
win
gs-
-
-
-
43,2
84,6
60
-
43,2
84,6
60
43
,284
,660
Curr
ent
inco
me
tax
8,14
6
78,0
00
325,
414
6,
280
-
-
417,
840
417,
840
Oth
er li
abili
ties
2,79
8,03
0
2,
346,
480
1,
893,
613
873,
757
69
,992
7,71
3,73
2
15
,695
,604
15,6
95,6
04
Retir
emen
t be
nefit
obl
igat
ions
-
-
-
51
,870
-
-
51,8
70
51,8
70
Tota
l lia
bilit
ies
73,2
74,5
59
29,9
32,5
52
13,0
23,8
05
1,81
5,17
0
44
,025
,890
7,
713,
732
169,
785,
708
16
9,78
5,70
8
Gap
(74,
540,
872)
23
,229
,151
(2
7,53
4,09
7)
(7,0
97,6
62)
(6
,535
,533
)
(25,
846,
019)
(1
18,3
25,0
31)
40
,176
,816
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 9999
Financial Risk ManagementFor the period ended 31 December, 2009
cont’d
Ban
k
Mat
urit
y Pr
ofile
- O
n B
alan
ce S
heet
31 M
arch
200
9
Up t
o 1
1 -
33
- 6
6 -1
21
- 5
year
sO
ver
5To
tal
Carr
ying
val
ue
mon
thm
onth
sm
onth
sm
onth
sye
ars
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
N'0
00N
'000
Ass
ets:
Cash
and
bal
ance
s w
ith c
entr
al b
anks
5,30
9,08
6
-
-
-
-
-
5,
309,
086
5,
309,
086
Trea
sury
bill
s43
849
3,68
9
2,
429,
298
-
-
-
2,92
3,42
5
2,92
3,42
5
Due
from
oth
er b
anks
9,53
9,96
4-
-
-
-
-
9,
539,
964
9,
539,
964
Loan
s an
d ad
vanc
es t
o cu
stom
ers
121,
964,
625
4,
213,
091
4,
360,
713
4,16
1,68
6
15
,228
,459
9,
663,
266
159,
591,
841
49
,689
,651
Adva
nces
und
er fi
nanc
e le
ase
185,
609
13
,861
85
,262
32,8
54
77
5,08
2
1,68
1,32
2
2,
773,
990
82
2,45
3
Inve
stm
ent
secu
ritie
s-
-
-
-
4,88
3,21
1
-
4,
883,
211
2,
464,
782
Inve
stm
ent
in s
ubsi
diar
ies
-
-
-
-
-
2,
894,
479
2,89
4,47
9
2,89
4,47
9
Oth
er a
sset
s5,
719,
985
577,
448
352,
800
2,
296,
659
243,
316
99
,122
9,28
9,33
1
5,04
5,95
3
Prop
erty
and
equ
ipm
ent
-
-
-
-
9,
733,
729
12,7
72,9
76
22,5
06,7
05
13
,780
,071
Def
erre
d Ta
x as
set
-
-
18
,511
,749
-
-
-
18
,511
,749
18,5
11,7
49
Tota
l ass
ets
142,
719,
707
5,
298,
089
25
,739
,822
6,
491,
200
30,8
63,7
97
27,1
11,1
65
238,
223,
780
11
0,98
1,61
3
Liab
ilitie
s:
Cust
omer
dep
osits
78,5
27,6
05
23,6
40,9
54
6,73
9,12
4
-
-
-
10
8,90
7,68
3
108,
907,
683
Due
to
othe
r ba
nks
-
-
-
-
-
-
-
-
Fina
nce
leas
e ob
ligat
ions
-
-
-
-
-
-
-
-
Deb
t se
curit
ies
in is
sue
-
-
-
-
-
-
-
-
Oth
er b
orro
win
gs-
-
-
42,3
37,2
12
-
-
42,3
37,2
12
42
,337
,212
Curr
ent
inco
me
tax
-
-
-
19
1,04
0
-
-
191,
040
191,
040
Oth
er li
abili
ties
2,73
1,26
8
20
4,91
6
91
6,68
6
273,
307
-
-
4,
126,
176
4,
126,
176
Def
erre
d ta
x lia
bilit
ies
-
-
-
-
-
-
-
-
Retir
emen
t be
nefit
obl
igat
ions
-
-
-
48
,154
-
-
48,1
54
48,1
54
Tota
l lia
bilit
ies
81,2
58,8
73
23,8
45,8
69
7,65
5,81
0
42
,849
,712
-
-
15
5,61
0,26
5
155,
610,
265
Gap
61,4
60,8
34
(18,
547,
780)
18,0
84,0
12
(36,
358,
512)
30
,863
,797
27
,111
,165
82
,613
,515
(44,
628,
652)
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 100100
Financial Risk ManagementFor the period ended 31 December, 2009
cont’d
Maturity profile - Off Balance Sheet
The age analysis of contingent liabilities is presented below:
Group
31 December 2009
Up to 1 1 - 3 3 - 6 6 -12 1 - 5 Over 5 Total
month months months months years years
N'000 N'000 N'000 N'000 N'000 N'000 N'000
Guarantees and indeminities 186,427 638,931 503,660 273,796 58,871 - 1,661,685
Bonds 8,855 5,813 19,880 301,750 68,244 - 404,542
Letters of credit 28,435 84,350 433,385 - - - 546,171
223,717 729,095 956,925 575,546 127,115 - 2,612,397
Group
31 March 2009
Up to 1 1 - 3 3 - 6 6 -12 1 - 5 Over 5 Total
month months months months years years
N'000 N'000 N'000 N'000 N'000 N'000 N'000
Guarantees and indeminities 578,199 207,092 484,541 321,242 342,912 - 1,933,986
Bonds 47,452 399,908 12,466 16,100 69,944 - 545,870
Letters of credit - - - - - - -
625,650 607,000 497,007 337,342 412,856 - 2,479,855
Bank
31 December 2009 Up to 1 1 - 3 3 - 6 6 -12 1 - 5 Over 5 Total
month months months months years years
N'000 N'000 N'000 N'000 N'000 N'000 N'000
Guarantees and indeminities 186,427 638,931 503,660 273,796 58,871 1,661,685
Bonds 8,855 5,813 19,880 301,750 68,244 - 404,542
Letters of credit 28,435 84,350 433,385 - - - 546,171
223,717 729,095 956,925 575,546 127,115 - 2,612,397
Bank
31 March 2009 Up to 1 1 - 3 3 - 6 6 -12 1 - 5 Over 5 Total
month months months months years years
N'000 N'000 N'000 N'000 N'000 N'000 N'000
Guarantees and indeminities 578,199 207,092 484,541 321,242 342,912 - 1,933,986
Bonds 47,452 399,908 12,466 16,100 69,944 - 545,870
Letters of credit - - - - - - -
625,650 607,000 497,007 337,342 412,856 - 2,479,855
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 101101
Financial Risk ManagementFor the period ended 31 December, 2009
cont’d
Capital management
It is pertinent to note that our Bank, in the financial year ended 31st March 2008 took a proactive step of commencing
the process of disencumbering our books of doubtful and classified assets so as to lay a solid foundation for a more virile
and prosperous Wema Bank Plc.
Consequent upon this, we have made total provision of N68.37billion (Group: N44.50billion) in three financial years
spanning 31st March 2008 to 31st December 2009. These have had substantial negative impact on our shareholders
funds which came to a negative position of N45.49billion (Group: N45.84billion) as at 31 December 2009.
In the aftermath of this our capital management objectives have been to:
· Stop further erosion of shareholders wealth;
· Take all necessary measures to bring the Group’s capital to the level set by the regulatory authorities; and
· Sustain the Group’s capability to continue as a going concern.
We have instituted effective mechanisms for the daily monitoring of movement in our capital base and measurement of
our capital adequacy ratio by deploying techniques stipulated by the Central Bank of Nigeria (CBN) banks’ supervisory
guidelines. Throughout the reporting period, our Bank complied strictly with the requirement of monthly rendition of
report on same to the CBN. Our Auditors are also required to comply with the Nigeria Deposit Insurance Corporation
(NDIC) requirement of submitting an annual certificate that consist the computed capital adequacy ratio of the Group.
To align with the CBN current reforms, we are taking a multiple approach to raising the Group capital base to the
required level through:
Increasing the Group’s revenue base while ensuring efficient management of operating expenses.
Vigorously implementing debt recovery strategies.
We are also hopeful of meeting the June 2010 deadline for the injection of fresh capital.
Our group’s regulatory capital as managed by the Financial Control and Treasury Units is divided into two tiers.
Tier 1 Capital: Share capital, share premium, other reserves and retained earnings.
Tier 2 Capital: Revaluation reserves, other borrowings and minority interest.
The risk weighted assets are measured by means of a hierarchy of five risk weights classified according to the nature of
and reflecting an estimate of credit, capital market and other risks associated with each asset and counterparty, taking
into consideration any eligible collateral guarantee. A similar treatment is accorded to off-balance sheet transactions
with adjustments in line with the contingent nature of the underlining potential losses.
The table below summarizes the composition of regulatory capital and the ratios of the Group’s for the period ended
31st December 2009.
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 102102
Financial Risk ManagementFor the period ended 31 December, 2009
cont’d
Group Group
Dec. 2009 Mar. 2009
N'000 N'000
Tier 1 capital
Share capital 5,160,315 5,034,971
Share premium 18,791,971 17,693,085
Statutory reserves 2,805,614 2,805,614
Contigency reserve 113,015 69,219
SMIEIS reserve 526,907 526,907
Syndicated loan redemtion reserve 500,000 500,000
Capital reserve 300,000 300,000
Retained earnings (77,438,607) (70,631,377)
(49,240,785) (43,701,581)
Less:
Intangible asset - Deferred tax asset (20,242,539) (18,843,223)
Total qualifying Tier 1 capital (69,483,324) (62,544,804)
Tier 2 capital
Preference shares - -
Non controlling interest (846,643) (254,849)
CBN convertible loan 87,779,538 -
Fixed asset and investment
property revaluation reserve 4,249,457 3,779,614
General provision 4,436 574,977
Total qualifying Tier 2 capital 91,186,788 4,099,742
Total regulatory capital 21,703,464 (58,445,062)
Risk-weighted assets:
On-balance sheet 71,056,531 91,363,172
Off-balance sheet 522,479 495,971
Total risk-weighted assets 71,579,010 91,859,143
Risk weighted Capital Adequacy Ratio (CAR) 30.32% -63.62%
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 103103
Value Added StatementsFor the period ended 31 December, 2009
Group:Dec. 2009 Mar. 2009
9 months 12 months
N'000 % N'000 %
Gross earnings 18,994,974 16,551,373
Interest expense:
-Local (8,634,693) (12,153,808)
- Foreign - -
10,360,281 4,397,565
Loan loss expense/diminution in
other risk assets (4,838,286) (16,208,452)
5,521,995 (11,810,887)
Bought in materials and services
- Local (4,879,495) (6,603,158)
- Foreign - -
Value added/(eroded) 642,500 100 (18,414,045) 100
Distribution
Employees
- Employees as wages, salaries and pensions 8,128,708 1,266 7,912,705 (43)
Government
- Taxation (1,337,901) (208) (7,850,756) 43
Retained in the Group
- Depreciation - Property and equipment 1,381,991 215 1,979,462 (11)
- Loss for the period (7,530,298) (1,172) (20,455,456) 111
642,500 101 (18,414,045) 100
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 104104
Value Added StatementsFor the period ended 31 December, 2009
cont’d
Bank:Dec. 2009 Mar. 2009
9 months 12 months
N'000 % N'000 %
Gross earnings 16,272,245 12,938,450
Interest expense:
-Local (7,845,973) (10,342,198)
- Foreign - -
8,426,272 2,596,252
Loan Loss expense/diminution on
other risk assets 1,558,239 (7,555,936)
9,984,511 (4,959,684)
Bought in materials and services
- Local (4,518,516) (5,469,681)
Value added/(eroded) 5,465,995 100 (10,429,365) 100
Distribution
Employees
- Employees as wages, salaries and pensions 7,518,273 138 7,230,324 (69)
Government
- Taxation (1,214,562) (22) (7,768,466) 74
Retained in business:
Depreciation - Property and equipment 1,256,976 23 1,777,185 (17)
Profit/(loss) for the period (2,094,692) (38) (11,668,408) 112
5,465,995 101 (10,429,365) 100
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 105
Four Period Financial Summary
GroupDec. 2009 Mar. 2009 Mar. 2008 Mar. 2007
N'000 N'000 N'000 N'000ASSETS:Cash and balances with CBN 6,354,206 5,810,659 7,079,164 5,922,222 Treasury bills 5,049,245 2,923,425 29,473,799 21,040,833 Due from financial institutions 60,292,150 13,335,516 8,655,067 37,579,555 Loans and advances to customers 30,001,550 46,166,955 48,799,222 65,940,926 Advances under finance lease 463,206 913,272 2,747,272 4,151,969 Insurance receivables 212,049 85,565 184,368 11,927 Investment securities 3,874,052 14,696,765 22,306,893 12,706,233 Deferred tax assets 20,242,539 18,843,223 11,099,973 397,525 Other assets 5,964,253 8,967,682 6,865,558 16,606,928 Investment property 4,198,020 3,032,351 1,003,561 887,437 Property and equipment 14,284,971 14,833,479 17,990,158 15,342,363 Goodwill on consolidation - - - 2,277,922 TOTAL ASSETS 150,936,241 129,608,892 156,205,035
182,865,840
FINANCED BY:Share capital 5,160,315
5,034,971
5,034,971
5,034,971
Share premium 18,791,971
17,693,085
17,693,085
17,693,085 Reserves (68,943,614)
(62,650,023)
(42,840,331)
3,024,414
Non-controlling interest (846,643)
(254,849)
175,701
674,176 Customers' deposits 94,058,964
108,825,013
132,959,116
123,841,680
Due to other banks 467,797
-
-
- Claims payable 205,017
128,066
83,215
259,990
Liability on investment contracts 443,422
605,315
40,643
- Liabilities on insurance contracts 985,051
777,340
282,642
315,645
Current income tax payable 406,245
417,840
395,690
485,440 Other liabilities 11,195,634
15,695,604
42,169,714
31,382,390
Deferred tax liabilities 277,620
-
172,161
154,049 Retirement benefit obligations 61,803
51,870
38,428
-
Other borrowings 88,672,659
43,284,660
-
- 150,936,241 129,608,892 156,205,035 182,865,840
Guarantees and other commitments on behalf of customers 2,612,397
2,479,855
16,765,768
40,539,883
Dec. 2009 Mar. 2009 Mar. 2008 Mar. 2007
9 months 12 months 12 months 12 months
INCOME STATEMENT N'000 N'000 N'000 N'000
Gross earnings 18,994,974
16,551,373
25,978,276
29,379,570
Net operating income 10,360,281
4,397,565
15,778,030
21,611,095
Operating expenses (14,390,194)
(16,495,325)
(19,653,833)
(13,108,611) Allowance for loan loss &
other risk assets (4,838,286)
(16,208,452)
(52,923,736)
(8,146,404)
(Loss)/profit before taxation (8,868,199)
(28,306,212)
(56,799,539)
356,080
Taxation 1,337,901
7,850,756
10,494,937
947,277
(Loss)/profit after taxation (7,530,298)
(20,455,456)
(46,304,602)
1,303,357
Non-controlling interest 766,864
1,393,413
498,475
(172,619)
(Loss)/profit attributable to Group shareholders (6,763,434)
(19,062,043)
498,475
(172,619)
(Loss)/earnings per share (66)k (189)k (455)k 11k
Total Capital and Liabilities
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 106106
Five Period Financial Summary
BankDec. 2009 Mar. 2009 Mar. 2008 Mar. 2007 Mar. 2006
N'000 N'000 N'000 N'000 N'000ASSETSCash and balances with CBN 5,851,836 5,309,086 6,565,677 4,221,041 4,918,708
Treasury bills 5,049,245 2,923,425 29,472,855 21,039,259 10,016,796 Due from financial institutions 58,729,492 9,539,964 6,786,313 30,953,334 24,045,673 Loans and advances to customers 28,636,557 49,689,651 48,394,253 68,796,732 53,702,803
Advances under finance lease 456,882 822,453 1,969,755 3,406,304 4,268,016 Investment securities 2,464,782 2,464,782 2,914,474 8,329,105 4,284,995 Investments in Subsidiaries 2,894,479 2,894,479 2,894,479 2,516,881 605,000 Deferred tax assets 19,759,352 18,511,749 10,720,356 - -
Other assets 5,725,233 5,045,953 4,777,741 11,824,727 8,083,104 Property and equipment 13,217,865 13,780,071 14,410,672 11,716,227 7,146,743 Goodwill - - - 2,277,922 3,037,229
TOTAL ASSETS 142,785,723 110,981,613 128,906,575 165,081,532 120,109,067
FINANCED BY:Share capital 5,160,315 5,034,971 5,034,971 5,034,971 4,961,508 Share premium 18,791,971 17,693,085 17,693,085 17,693,085 16,943,762 Reserves (69,451,400) (67,356,708) (55,342,708) 2,454,649 (2,188,055) Deposit for shares - - - - 822,786 Customers' deposits 94,791,074 108,907,683 136,122,027 125,475,968 85,605,312 Due to other banks 467,797 - - - - Current income tax payable 224,081 191,040 168,113 291,683 102,026 Other liabilities 4,968,942 4,126,176 25,192,659 14,021,805 13,654,420 Dividend payable - - - - 104,150 Deferred tax liabilities - - - 109,371 - Retirement benefit obligations 53,405 48,154 38,428 - - Other borrowings 87,779,538 42,337,212 - - 103,158
142,785,723 110,981,613 128,906,575 165,081,532 120,109,067
Guarantees and other commitments on behalf of customers 2,612,397 2,479,855 16,765,768 40,539,883 26,111,614
Dec. 2009 Mar. 2009 Mar. 2008 Mar. 2007 Mar. 2006
9 months 12 months 12 months 12 months 12 months
INCOME STATEMENT N'000 N'000 N'000 N'000 N'000
Gross earnings 16,272,245 12,938,450 21,633,431 26,430,982 14,836,623
Net operating income 8,426,272 2,596,252 13,255,840 19,855,739 11,592,312 Operating expenses (13,293,765) (14,477,190) (16,794,212) (11,014,350) (8,525,157) Allowance for loan loss &
other risk assets 1,558,239 (7,555,936) (64,943,792) (6,962,691) (10,267,385)
(Loss)/ profit before taxation (3,309,254) (19,436,874) (68,482,164) 1,878,698 (7,200,230)
Taxation 1,214,562 7,768,466 10,743,425 675,400 598,269
Profit/ (loss) after taxation (2,094,692) (11,668,408) (57,738,739) 2,554,098 (6,601,961)
(Loss)/earnings per share (21)k (116)k (573)k 25k (66)k
Total Capital and Liabilities
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 107107
Shareholders’ Bulletin
ISSUED AND PAID -UP
AUTHORISEDNOMINAL VALUE OTHER THAN BY BONUS BONUS CURRENT ISSUE TOTAL
YEAR NO OF AMOUNT NO OF AMOUNT NO OF AMOUNT NO OF AMOUNTSHARES N'000 SHARES N'000 SHARES N'000 SHARES N'000
1945 20,000 10,000 20,000 10,000 _ _ 20,000 10,0001970 1,000,000 1,000,000 980,000 490,000 _ _ 1,000,000 500,0001974 8,000,000 4,000,000 4,600,000 2,300,000 _ _ 5,600,000 2,800,0001981 8,000,000 8,000,000 4,000,000 2,000,000 _ _ 9,600,000 4,800,0001987 25,000,000 25,000,000 14,400,000 7,200,000 _ _ 24,000,000 12,000,0001988 _ _ 8,000,000 4,000,000 _ _ 32,000,000 16,000,000
1989 _ _ 8,000,000 4,000,000 _ _ 40,000,000 20,000,0001990 100,000,000 50,000,000 _ _ 16,000,000 8,000,000 56,000,000 28,000,0001990 _ _ 240,000,000 12,000,000 _ _ 80,000,000 40,000,0001991 160,000,000 80,000,000 _ _ 20,000,000 10,000,000 100,000,000 50,000,0001992 300,000,000 150,000,000 _ _ 20,000,000 10,000,000 120,000,000 60,000,0001993 _ _ 80,000,000 40,000,000 _ _ 200,000,000 100,000,0001993 _ _ _ _ 30,000,000 15,000,000 230,000,000 115,000,0001995 600,000,000 300,000,000 _ _ 46,000,000 23,000,000 276,000,000 138,000,0001996 _ _ _ _ 55,200,000 27,600,000 331,200,000 165,600,0001997 _ _ 68,217,200 34,108,600 _ _ 399,417,200 199,708,6001997 1,200,000,000 600,000,000 _ _ 639,067,520 319,533,760 1,038,484,720 519,242,3602000 2,000,000,000 1,000,000,000 311,545,416 155,772,708 _ _ 1,350,030,136 675,015,0682002 2,500,000,000 1,250,000,000 207,696,944 103,848,472 _ _ 1,557,727,080 778,863,5402003 _ _ 778,863,540 389,431,770 _ _ 2,336,590,620 1,168,295,3102003 _ _ _ _ 778,863,540 389,431,770 3,115,454,160 1,557,727,0802004 _ _ _ _ 1,038,484,720 519,242,360 4,153,948,880 2,076,974,4402004 5,000,000,000 2,500,000,000 _ _ _ _ 9,153,948,880 4,576,974,4402005 _ _ _ _ 445,162,526 222,581,263 9,599,111,406 4,799,555,7032005 721,519,546 360,759,773 _ _ _ _ 10,320,630,952 5,160,315,476
SINCE BECOMING A PULIC COMPANY IN 1987 THE COMPANY HAS ISSUED SHARES AS SHOWN BELOW:
S/N SHARES DATES DESCRIPTION NO OF ORD. SHARES INVOLVED
1 30/09/87 PRIVATE ISSUE FOR CASH 14,400,0002 05/12/88 PRIVATE ISSUE FOR CASH 8,000,0003 31/03/89 PRIVATE ISSUE FOR CASH 8,000,0004 24/10/90 BONUS:2 FOR 5 16,000,0005 16/11/90 PUBLIC ISSUE FOR CASH 24,000,0006 18/10/91 BONUS:1 FOR 4 20,000,0007 20/11/92 BONUS: 1 FOR 5 20,000,0008 20/08/93 PUBLIC ISSUE FOR CASH 80,000,0009 26/10/93 BONUS:1 FOR 4 30,000,00010 16/11/95 BONUS: 1 FOR 5 46,000,00011 31/12/96 BONUS: 1 FOR 5 55,200,00012 28/02/97 PUBLIC ISSUE FOR CASH 68,217,20013 31/03/97 BONUS: 8 FOR 5 639,067,52014
31/03/00
RIGHTS ISSUE FOR CASH: 1 FOR 2
311,545,416
15
31/03/02
RIGHTS ISSUE FOR CASH:1 FOR 2
207,696,944
16 31/03/03 RIGHTS ISSUE FOR CASH:1 FOR 2
778,863,540
17 31/03/03 BONUS: 1 FOR 3 778,863,540
18 31/03/04 BONUS: 1 FOR 3 1,038,484,72019 31/03/05 PUBLIC ISSUE FOR CASH 5,000,000,00020 09/11/2005 BONUS: 1 FOR 20 445,162,52621 30/08/2006 NATIONAL BANK CONVERSION 721,519,546
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 108108
0.14%
3.06%
2.07%
6.90%
3.82%
8.91%
3.22%
8.24%
2.77%
38.87%
22.00%
10000.00%
14,838,739.00
315,828,514.00
213,997,005.00
711,700,824.00
393,654,830.00
919,900,861.00
331,962,825.00
850,016,711.00
285,765,521.00
4,012,278,085.00
2,270,687,037.00
10,320,630,952.00
27956
178932
209743
244717
250208
254988
255450
255875
255914
255963
255964
10.92%
58.98%
12.04%
13.66%
2.15%
1.87%
0.18%
0.17%
0.02%
0.02%
0.00%
100.00%
27,956.00
150,976.00
30,811.00
34,974.00
5,491.00
4,780.00
462.00
425.00
39.00
49.00
1.00
255,892.00
28,079
178,847
209,616
244,437
249,917
254,702
255,166
255,599
255,634
255,683
255,684
Shareholders’ Bulletin cont’d
Wema Bank Range Analysis As at 31/12/2009
ACTIVE SHAREHOLDERS - SUMMARY
Share RangeNo of
Shareholders% of
ShareholderHolders
Cumulative Units % of Units
1 - 1,000 28,079 10.92%
14,884,801 0.14%
1,001 - 5,000 150,976 58.98%
315,775,047 3.06%
5,001 - 10,000 30,769 12.04%
214,050,472 2.07%
10,001 - 50,000 34,821 13.66%
711,654,762 6.90%
50,001 - 100,000 5,480 2.15%
393,601,363 3.82%
100,001 - 500,000 4,785 1.87%
919,954,328 8.91%
500,001 - 1,000,000 464 0.18%
332,016,292 3.22%
1,000,001 - 5,000,000 433 0.17%
849,963,247 8.24%
5,000,001 - 10,000,000 35 0.02%
285,818,985 2.77%
10,000,001 - 2,000,000,000 49 0.02%
4,012,224,618 38.87%
2,000,000,001 - 5,000,000,000 1 0.00%
2,270,687,037 22.00%TOTAL 255,892.00 100.00% 10,320,630,952 100.00%
Wema Bank Range Analysis As at 31/03/2009
ACTIVE SHAREHOLDERS - SUMMARY
Share RangeNo of
Shareholders% of
ShareholderHolders
Cumulative Units Units %
1.00 - 1,000.00
1,001.00 - 5,000.00
5,001.00 - 10,000.00
10,001.00 - 50,000.00
50,001.00 - 100,000.00
100,001.00 - 500,000.00
500,001.00 - 1,000,000.00
1,000,001.00 - 5,000,000.00
5,000,001.00 - 10,000,000.00
10,000,001.00 - 2,000,000,000.00
2,000,000,001.00 - 5,000,000,000.00
A n n u a l r e p o r t & a c c o u n t s 2 0 0 9 109109
Shareholders’ Bulletin cont’d
WEMA BANK PLC DIVIDEND PAY-OUT HISTORY AS AT 31ST DEC. 2009
DIVIDEND ISSUE NO
FINANCIAL YEAR ENDED
DIV. PAY-OUT PER 50K SHARE
PAYMENTDATE
AMOUNT
01 31/03/89 7.5K 09/10/89 N3,000,000.0002 31/03/90 10K 08/10/90 N4,000,000.0003 31/03/91 6.25K 07/10/91 N5,000,000.0004 31/03/92 10K 09/10/92 N10,000,000.0005 31/03/93 20K 30/09/93 N24,000,000.0006 03/03/94 30K 30/09/94 N69,000,000.0007 31/03/95 32.5K 29/09/95 N74,750,000.0008 31/03/96 27.5K 25/10/96 N75,900,000.0009 31/03/97 7.5K 31/10/97 N77,886,354.0010 31/03/98 10K 28/10/98 N103,848,472.011 31/03/99 12.5K 31/08/99 N129,810,590.012
31/03/00
15K
02/10/00
N202,504,520.013 31/03/01 25K 27/09/01 N337,507,543.014 31/03/02 45K 09/09/02 N700,977,186.015
31/03/03
25K
30/10/03
N763,655,288.016
31/03/04
10K
20/10/04
N311,092,082.0
However, our records show that some of the Share Certificates have been returned from the Post Office while some DividendWarrants remain unclaimed for various reasons.
This notice is therefore to request Shareholders who have not received their certificates or dividend warrants to please contact:
The Registrar, Wema Registrars Limited, A. G. Leventis Building (2nd Floor), 41/43, Marina, P. M. B. 12964, Lagos. 01-2666778 or 7732181
In case of public issue of 16th November, 1990; 20th August, 1993, 28th February, 1997 and November, 2004 subscribers are requested to please collect their share certificates from the banks and stockbroking firms through which their applications were submitted.