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Monday, 16 April 2018

Coronation Merchant Bank Group records 66% growth in gross earnings for 2017


Coronation Merchant Bank Limited (‘CORONATION MB); Nigeria’s leading merchant banking brand, announced its 2017 Full Year Results to stakeholders at its Annual General Meeting held in Lagos, in which the Bank posted a Profit Before Tax of N5.1 billion.

Speaking at the AGM, Abu Jimoh, Group Managing Director/CEO of Coronation Merchant Bank Limited 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% to N25.5Bn 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. We will continue to focus on delivering world class solutions, accompanied by innovative products and services, whilst remaining committed to our values of strong corporate governance and transparency.

The impressive results of the bank in the last 3 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 67% y/y and non-interest income growth of 57% 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 46.1% (Dec 2016: 45.2%), 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 28% to N136.7bn from N106.6bn in December 2016, and shareholder’s funds increased to N29.5bn from N25.9bn – 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 42% which increased from N22.7bn to N32.3bn 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.

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.

Financial highlights

Balance Sheet & Income Statement

· Total Assets up 28% to N136.7 billion as at Dec 2017 (December 2016: N106.6bn)

· Loans & Advances to customers up 42% to N32.3billion as at Dec 2017 (December 2016: N22.7bn)

· Customer Deposits up 43% to N76.4billion as at Dec 2017 (December 2016: N53.4bn)

· Net Interest Income remained unchanged at N8.0billion

· Profit Before Tax of N5.1billion (December 2016: N5.3bn)

· Shareholders’ Funds increased to N29.5bn as at December 2017 (December 2016:25.9bn)

Key Ratios

· Capital Adequacy Ratio: 24.8% as at Dec 2017 (December 2016: 40.1%)

· Loan to Deposit Ratio: 42.2% as at Dec 2017 (December 2016: 42.5%)

· NPL Ratio: 0% as at Dec 2017 (December 2016: 0%)

· Cost to Income ratio of 52.6% as at Dec 2017 (December 2016: 44.9%)

· Net Interest Margin: 7.7% as at Dec 2017 (December 2016: 9.6%)

· EPS: 94 kobo (December 2016: 102 kobo)

· DPS: 30 kobo (December 2016: 15k

· Return on Equity 17.2% as at Dec 2016 (December 2016: 22.3%)

Operational and Reporting highlights

· Emerged Merchant Bank of the Year at the 2017 Business Day Awards

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

· 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

ABOUT CORONATION MERCHANT BANK

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 N130bn, the Banking group is certain to leverage 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.

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