Coronation Merchant Bank records 15% PBT growth in 2020

Coronation Merchant Bank Limited, at the weekend, announced its audited financial results for the year ended December 31, 2020, and declared a profit before tax (PBT) of N5.784 billion.

Commenting on the financial results, Banjo Adegbohungbe, managing director of the bank, said, “Despite the challenges in our operating environment, we navigated the headwinds that characterised the year to deliver strong results. In a year when the entire world grappled with the debilitating effects of the COVID-19 pandemic, we strengthened our partnerships with our customers and created sustainable value for our shareholders.”

A further highlight of the financials shows total assets up 63 percent from N253.35 billion in 2019 to N412.36 billion; loans and advances to customers up 69 percent to N122.21 billion as at December 2020 (December 2019: N72.2bn);

Customers’ deposits up 41 percent to N195.16 billion as at December 2020 (December 2019: N138.08bn).

Others show PAT down 1 percent to N5.040 billion (December 2019: N5.097bn), and shareholders’ funds up by 16 percent to N40.11 billion (December 2019: N34.57bn).

The key ratios show capital adequacy ratio: 20.01 percent as at December 2020 (December 2019: 19.17%); regulatory loan to funding ratio: 67.9 percent as at December 2020 (December 2019: 71.1%); NPL ratio: zero percent as at December 2020 (December 2019: 0%); cost to income ratio of 50.3 percent as at December 2020 (December 2019: 51.1%); net interest margin: 1.63 percent as at December 2020 (December 2019: 2.39%); EPS: 100k (December 2019: 101k), and return on equity 15.49 percent as at December 2020 (December 2019: 15.29%).

Despite the volatile environment in 2020, PBT increased by 15 percent from N5.024 billion in 2019 to N5.784 billion, while total assets grew by 63 percent from N253.35 billion in 2019 to N412.36 billion in 2020. Non-interest income grew by 23 percent, mainly driven by trading income that compensated for the declining yield environment in the market.

Risk assets increased by 69 percent as the bank continued to support its customers through difficult times. Cost of risk remained at a healthy level of 0.14 percent while NPLs were nil, reflecting the efficacy of our risk management framework and sound corporate governance. Operating expense grew moderately at 14 percent YoY in spite of the impact of FX devaluation and rising inflation, which closed at 15.75 percent as at December 2020.

During the year, the bank concluded its maiden international credit rating by Fitch with B- (stable outlook) as at December 31, 2020.

The bank’s decision to proceed with an internationally accepted rating despite the challenging and uncertain operating environment is a reflection of the strength of its franchise, the efficacy of its business strategy and its commitment to delivering long-term value for its clients, it noted in a press release at the weekend.

In addition to this, it raised several tranches of Commercial Papers and issued its maiden subordinated bond that was fully subscribed, raising over N25 billion. The continued positive results recorded in its issues of commercial papers and bonds are a testament to its strong credit rating in the capital markets and growing levels of investor confidence, it noted.