Coronation Merchant Bank Limited has announced its Audited Financial Results for the year ended 31 December 2021 and declared a PBT of N2.796 bn
Commenting on the financial results, Banjo Adegbohungbe, the Managing Director of Coronation Merchant Bank said that “The year was characterized by significant challenges including the escalating impact of cash reserve requirements, negative carry on fixed income securities, FX illiquidity and rising regulatory costs. In spite of these headwinds, we delivered a modest financial performance with a stronger balance sheet and solid prudential ratios”.
Profit before tax declined by 52% from N5.784 billion in 2020 to N2.796 billion while Total Assets grew by 15% from N412.19 billion in 2020 to N473.97 billion in 2021. Net interest income declined by 75.05% from N4.005 billion to N999 million. This is primarily due to the higher cost of funding the regulatory cash reserve requirement and the special bills issued by the CBN. Non-interest income grew by 22%, largely driven by trading income and commissions and fees.
Operating expenses grew by 24% YoY driven largely by significant increase in NDIC premium and other regulatory induced costs. Cost of risk remained at a healthy level of 0.10% while nil NPL was recorded for the sixth consecutive year.
Financial Highlights
- Total Assets grew by 15% from N412.19 billion in 2020 to 97 billion.
- Loans and advances to customers up 23% to N151.22 billion as at Dec 2021 (Dec 2020: N122.68 billion)
- Customer Deposits down 9% to 36 billion as at Dec 2021 (Dec 2020: N195.16 billion)
- Profit Before Tax down 52% to N2.796 billion (Dec 2020: 784 billion)
- Shareholders’ Funds down by 1% to 80 billion (Dec 2020: N40.11 billion)
Key Ratios
- Capital Adequacy Ratio: 97% as at Dec 2021 (Dec 2020: 19.87%)
- Regulatory Loan to Funding Ratio: 0% as at Dec 2021 (Dec 2020: 67.9%)
- NPL Ratio: 0% as at Dec 2021 (Dec 2020: 0%)
- Cost to Income Ratio of 6% as at Dec 2021 (Dec 2020: 50.3%)
- Net Interest Margin: 34% as at Dec 2021 (Dec 2020: 1.63%)
- EPS: 40 kobo (Dec 2020: 100 kobo)
- Return on Equity 00% as at Dec 2021 (Dec 2020: 15.49%)
About Coronation Merchant Bank
Coronation Merchant Bank was established in 2015 to provide wholesale banking to a long-underserved market. The Bank offers Corporate & Investment Banking, Private Banking/Wealth Management and, Global Markets/Treasury Services to its niche clientele. It presently has two branches located in Abuja and Port Harcourt with its Head Office in Lagos, Nigeria.
The Bank is currently rated ‘B-‘ with a Stable Outlook by Fitch, one of the ‘Top 3’ global rating agencies, and it is it the first and only Nigerian Merchant Bank to receive an international risk rating. It is also currently rated “A+” with a stable outlook by Agusto & Co.
The Bank has been the recipient of numerous international and national awards for product innovation and sound corporate governance practices. Some of the international awards it received in 2022, 2021, 2020 and 2019 include Best Investment Bank in Nigeria by Global Finance, Best Investment Bank in Nigeria by World Finance, Best Investment Bank in Nigeria by Global Banking & Finance Review, Best Investment Bank by Global Business Outlook and Best Investment Bank in Nigeria by International Finance.
Could Capital Adequacy Ratio for Coronation Merchant Bank be 97% as at Dec 2021?
This is most unlikely. It means the bank is not doing business.