Coronation Merchant Bank advances in loans, customers’ deposit amid macro economic challenges

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By Kayode Tokede

Coronation Merchant Bank Limited, continued to sustain growth in balance sheet with improved growth in loans & advances to customers amid macro economy challenges.

Customers’ deposit also improved significantly to impact positively on total assets that gained 28 per cent to N136.7 billion in 2017 as against N106.6billion reported in 2016.

The merchant Bank loans & advances to customers up 42 per cent to N32.3billion in 2017 from N22.7billion reported in 2016 as Customer Deposits up by 43 per cent to N76.4billion in 2017 from N53.4billion in 2016.

Consequently, Loan to Deposit Ratio moved to 42.2per cent in 2017 from 42.5 per cent in 2016.

Meanwhile, shareholders’ Funds increased to N29.5billion in 2017 from N25.9billion reported in 2016.

The Nigeria’s leading merchant banking brand, announced its 2017 full Year Results to stakeholders at its Annual General Meeting (AGM) held in Lagos, in which the Bank posted a profit before tax of N5.1billion from N5.3 billion in 2016.

Coronation Merchant emerged the Merchant Bank of the Year at the 2017 Business Day Awards

Agusto & Co – Nigeria’s foremost rating agency, upgraded the Bank’s credit rating from “A”to “A+” with a stable outlook.

Successfully launched and listed three mutual funds on the Nigeria Stock Exchange Certified by International Organisation for Standardisation (ISO 27001:2013) for the Information Security Management by the British Standard Institute (BSI). graduated the first set of Analysts from Coronation Academy Launched the new Coronation Merchant Bank Brand Identity.

Coronation Merchant Bank group was established to fill the gap in a long-underserved market segment, seeking to address the need for long term capital across key sectors of the economy.

The Group offers investment and corporate banking, private banking/wealth management and global markets/treasury services to its diverse clients. It also offers securities trading/brokerage, asset management and trustees services via its subsidiaries; Coronation Securities Limited, Coronation Asset Management Limited respectively.

Driven by its vision of becoming Africa’s premier investment Bank and with an asset base of over N130billion, the Banking group is certain to leverage on its privileged direction by some of Nigeria’s individuals who excelled and rose to the top of merchant banking sector at its height of excellence to become the industry model for risk management, corporate governance and responsible business practices. Coronation Merchant Bank’s quest for industry distinction is evident in its recently unveiled corporate identity which has been designed to communicate the Group’s vision, ambition and inner strength.

The Bank has two branches located in Abuja and Port Harcourt with its Head Office in Lagos, Nigeria.

 

Stronger ratios

For the 2017 financial year, the merchant bank’s Capital Adequacy Ratio (CAR) closed at 24.8 per cent as against 40.1 per cent in 2016.

Non-performing Loan (NPL) remained flat at 0 per cent for the second consecutive year as Cost to Income ratio increased to 52.6 per cent in 2017 from 44.9 per cent in 2016.

However, the company’s Net Interest Margin closed 2017 at 7.7 per cent from 9.6 per cent reported in 2016.  Also, Earning Per Share (EPS) dropped to 94 kobo from N1.02 kobo in 2016.

Investors Investment, Return on Equity stood at 17.2 per cent in 2017 from 22.3 per cent in 2016.

 

Operational and Reporting highlights

The Merchant bank appointed two Non-Executive Directors (one of whom is Independent) and one Executive Director has been appointed to further strengthen corporate governance in the Bank and Capital Market Group.

Speaking at the AGM, Group Managing Director/CEO of Coronation Merchant Bank Limited, Abu Jimoh, said that, “despite the tough market conditions that characterized significant parts of the year, the underlying business fundamentals of the Bank remained strong as reflected in the Gross earnings growth of 66 per cent to N25.5 billion in 2017.

“As we progress in our journey to become Africa’s premier Investment Bank, we remain committed to providing our clients with superior financial services whilst generating attractive and sustainable returns for shareholders.

“The impressive results of the bank in the last three years demonstrate the effectiveness of our strategy, the quality of our past decisions and the commitment of our board & management to maximize shareholder value whilst actively expanding our franchise in select, high growth markets where we believe we have a competitive advantage.

Coronation MB Group recorded a notable improvement across key performance metrics in 2017, despite the tough and challenging operating environment.

“Our interest income growth of 67per cent y/y and non-interest income growth of 57per cent in 2017 re-affirm the sustainability of our core business growth.

“We will continue to gain momentum in our efforts to achieve more diversified earnings, as we strengthen our subsidiaries offerings.

“Our deliberate focus on the efficiency of our business operations has continued to yield considerable returns for the Bank. Despite the high inflation rate, Cost-to-income ratio increased marginally by 90bps to 46.1per cent (Dec 2016: 45.2per cent), reaffirming the Bank’s commitment to rein in costs while improving operating efficiency.

“Aside from the strong earnings performance, the Group recorded a significant growth in its Balance Sheet in 2017.

“Total assets increased by 28per cent to N136.7billion from N106.6billion in December 2016, and shareholder’s funds increased to N29.5billion from N25.9billion – a valid testament to the resilience of the Group’s operations and its adaptability to current market realities and challenges.

“We will continue to maintain a disciplined and prudent approach in asset creation in line with our overall risk management framework and evidenced in our growth in loan book of 42per cent which increased from N22.7billion to N32.3billion with zero NPL.

“While general economic conditions and the regulatory environment remain tight, we believe that our new business and lending strategies, embedded risk management culture and continuous cost savings will enable us stand firm throughout this period.

He maintained that, “In the coming years, we will focus on the disciplined implementation of our growth strategy to drive efficiency in all segments of our business leveraging FinTech and process re-engineering.”

 

 

 

 

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