2009 Wema Bank Annual Report & Accounts...Wema Bank Plc. I am also honoured to present to you the...

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


Mutual Respect

Teamwork

Result Orientation

Innovation

Professionalism

Our core values


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


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.


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.”


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



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



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


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.”


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


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


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



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


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


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


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


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


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


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


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:


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


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


Adebode Adefioye - Director

Opeyemi Bademosi - 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


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


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

---


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


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.



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



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.



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:



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.



(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.



(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.



(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.



(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.



- 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 ...


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


Consolidated Profit and Loss AccountFor the period ended 31 December, 2009


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


Statements of Cash FlowsFor the period ended 31 December, 2009


Notes Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009


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


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.


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

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ent

Non

ban

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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



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


Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009


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


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


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:


Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009


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:


Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009


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




7 Underwriting profit

Underwriting profit comprises:


Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009


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:


Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009


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



9 Operating expenses(a) Analysis of operating expenses:


Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009


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:


Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009


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



(ii) The average number of persons employed by the Group during the period was as follows:


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


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)



(c) Directors' remuneration:(c) (i) Directors' remuneration (excluding pension contributions and certain benefits) was provided as follows:


Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009


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



10 Taxation (a) Tax charge

The tax charge for the period comprises: Group Group Bank Bank

Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009


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:


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:


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



(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:


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:


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:


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


N'000N'000N'000N'000

5151


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:


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:


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:


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



(e) The movements on specific loan loss allowance during the period was as follows:


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:


Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009


(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:


Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009


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)


N'000N'000N'000N'000

N'000N'000N'000N'000

N'000N'000N'000N'000



(h) Loan loss expense/ (recoveries) comprise:


Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009


(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


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



15 Advances under finance lease

(a)Advances under finance lease comprise:


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)


(b) (i) The movement on specific allowances for bad and doubtful advances under finance lease was as follows:


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:


Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009


(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


(c) The maturity profile of the net investment in advances under finance lease is as follows:


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:


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:


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




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:


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 - -


(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



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)


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:



(d)


Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009

(d) (i) Listed equity securities :


Allowance made during the period

(see note 14(i)) 6,811 197,033 - 66,600


(see note 14(i)) (22,242) - - -

Allowance written off - (201,125) - -

Reclassified from short term investment

securities (see (e) below) 593,085 - - -


(d) (ii) Unlisted equity securities:


(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


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 - -


(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



(f) (i) The movement in investment in securities-long term is as follows:


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)


(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:


Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009

Wema Asset management Limited

(See Note (c) below) - - 300,000 300,000


(See Note (d) below) - - 50,000 50,000


(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



(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 Homes Limited



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



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



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


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


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



20 Investment property

(a) (i) Movement in investment property is as follows:


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:


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)


The movement on allowance on other assets during the period was as follows:

N'000 N'000 N'000

N'000


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




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.



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 - - -


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 - - -


(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:


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


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




(c) (i) Movement in other managed funds:

Balance, beginning of the period Additions Withdrawals Investment returns


(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


(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


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



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))


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



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


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



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)


(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


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)

-


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




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



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:


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).



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


Odu'a Telecoms Subsidiary of Odua'a Inv. Company TLF 100,000


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



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.


Dec. 2009 Mar. 2009 Dec. 2009 Mar. 2009


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:



(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


(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




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.


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.


(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


cont’d


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


cont’d


? 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


cont’d


Risk Assets (Loans and Advances, Advances under Finance Leases, off-balance sheet direct credit substitutes etc)

Loans and advances are summarised as follows:


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


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


cont’d


Bank


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


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


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


cont’d



cont’d

Non-performing advances by industry


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


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


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


(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


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


cont’d



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


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


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


Mar. 2009 Mar. 2009 Mar. 2009 Mar. 2009 Mar. 2009

N'000 N'000 N'000 N'000 N'000



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


Dec. 2009 Dec. 2009 Dec. 2009 Dec. 2009 Dec. 2009

N'000 N'000 N'000 N'000 N'000


Dec. 2009 Dec. 2009 Dec. 2009 Dec. 2009 Dec. 2009

N'000 N'000 N'000 N'000 N'000


(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


cont’d



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.



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


Off balance sheet 2,479,855 - - - - 2,479,855



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


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


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 liabilities 153,372,489 1,952,233 35,191 148,419 101,933 155,610,265



Carrying amount


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


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



9595


cont’d



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-

-

-

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:



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:


Gro

up

9898


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



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)



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


N'000 N'000 N'000 N'000 N'000 N'000 N'000


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


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


N'000 N'000 N'000 N'000 N'000 N'000 N'000


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



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.



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%


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


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


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


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


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


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


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


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.

2009 Wema Bank Annual Report & Accounts...Wema Bank Plc. I am also honoured to present to you the...

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