Coronation Merchant Bank Group records 46% growth in Non-Interest Earnings for 2018 FY


Saturday, March 09, 2019 6:00PM / Coronation MB


Coronation Merchant Bank Limited (‘CORONATION MB);Africa’s leading financial institution,  has released its 2018 Full Year Results to stakeholders in which the Bank posted a Profit Before Tax of N5.3billion.


Commenting on the results, Abu Jimoh, Group Managing Director/CEO of Coronation Merchant Bank Limited said that despite a difficult operating environment, our company stayed the course, recording modest growth across most financial indices. The growth we recorded in our profitability and capital position is a testament to the strength of our business model and the commitment of our people. When we look at where we stand today, our company is stronger, simpler, and better positioned to deliver long-term value to our stakeholders, thanks to the straightforward way in which we serve our customers and clients. As a platform for improving lives, our aim is to assist our customers to identify growth opportunities, harness these opportunities and in the process, enable businesses thrive, economies grow, and ultimately, help organizations fulfil their hopes and realise their ambitions.


The Group maximized opportunities in its core business to deliver stable and sustainable revenue growing the topline revenue by 10% compared to 2017. Profit Before Tax increased from N5.1bn in 2017 to N5.3bn while Total Assets grew by 63% from N136bn in 2017 to N223bn.


Earning assets grew significantly by 70% y/y to cushion the huge gap from reduced market-driven decline in yield. This resulted to a slight decline in net interest income by 5% to achieve N7.6bn (2017: N8.0bn). There was increase in foreign exchange and fixed income trading volumes, loan disbursement, e-channel transactions which saw the bank’s non-interest income increase by 46% y/y to achieve N4.1bn (2017: N2.8bn). The impact of the adoption of IFRS 9 increased the bank’s cost of risk marginally from 0% to 0.03% with all its risk assets in the stage 1 classification according to IFRS 9 classification.


Commenting further on the results, Abu Jimoh stated “As a Group, we have continued to expand our sector reach and meet our customers’ financing needs by offering products tailor made to their varied needs. In 2018, we deliberately increased our exposures to high quality obligors in Agriculture, Manufacturing and Oil & Gas sectors who fall within our risk acceptance criteria. The quality and efficacy of our growth strategy is evidenced by our zero NPL ratios which we have maintained for the third year running. In addition to this, our dollar asset base grew by over 100% driven largely by self-liquidating trade finance transactions that are well managed, in line with our risk management framework.


Furthermore, the Bank’s commercial paper product which was launched in the year helped to provide a relatively stable funding base to support our growth. Our Customer Deposit grew by over 65% from N76bn in 2017 to N126bn in 2018. The positive results recorded by our commercial paper is an attestation of Bank’s strength in the capital market and a reflection of its growing level of investor confidence.


Financial highlights

 Balance Sheet & Income Statement

·         Total Assets up 63% to N222.7. billion as at Dec 2018 (Decr 2017: N136.7bn)

·         Loans & Advances to customers up 70% to N54.8billion as at Dec 2018 (Dec 2017: N32.3b)

·         Customer Deposits up 65% to N126.2billion as at Dec 2018 (Dec2017: N76.4bn)

·         Profit Before Tax of N5.3billion (De 2017: N5.1bn)

·         Shareholders’ Funds increased to N31.5bn as at December 2018 (Dec 2017  29.5 bn)


Key Ratios

·         Capital Adequacy Ratio: 19.7%% as at Dec 2018 (Dec 2017: 24.8%)

·         Loan to Deposit Ratio: 43.4% as at Dec 2018 (Dec 2017: 42.2%)

·         NPL Ratio: 0% as at Dec 2018 (Dec 2017: 0%)

·         Cost to Income ratio of 53.5% as at Dec 2018 (Dec 2017: 52.6%)

·         Net Interest Margin: 5.1% as at Dec 2018 (Dec 2017: 7.7%)

·         EPS: 90.62 kobo (Dec 2017: 94.09 kobo)

·         DPS: 33 kobo (December 2017: 30k)

·         Return on Equity 15.01% as at Dec 2018 (Decr 2017: 17.17%)


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 Proshare Nigeria Pvt. Ltd.

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