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Coronation Merchant Bank records N44bn in gross earnings

Coronation Merchant expects Nigeria’s revenue shortfall to exceed 2023

In spite of the tough operating environment, Coronation Merchant Bank on Monday said it achieved gross earnings of N44 billion in its financial year ended December 31, 2021, a growth of 61 percent compared with the level in the corresponding year.

Babatunde Folawiyo, chairman of the bank explained that macroeconomic challenges persisted as the sector continued to experience foreign exchange illiquidity, elevated inflation rates and the Central Bank of Nigeria (CBN)’s monetary policy in form of discretionary Cash Reserve Requirement (CRR) and special bill.

Consequently, the bank recorded a significant reduction in operating income, closing at N10.8 billion in 2021, representing a decrease of 10 percent over the level in 2020. “This also reflected in our Profit Before Tax (PBT) figure of N2.8 billion”, he said at the bank’s Annual General Meeting (AGM) held on Monday in Lagos.

According to him, the bank’s prudential ratios remained on track for the most of the year with liquidity ratios at 45.81 percent, Loan To Deposit ratio (LDR) at 74.04 percent and Capital Adequacy Ratio (CAR) at 17.97 percent.

“These are healthy ratios for a challenging financial year”, the Chairman said. The ratios could only be achieved because the bank strengthened its balance sheet structure and growth.

He said customers’ deposits declined to N177.4 billion, a 9 percent decrease from the prior year. Despite the decline, he said the bank sustained its loan growth to N151.22 billion in 2021 from N122.68 billion in 2020.

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“This serves as a confidence boost to our customers in meeting their financial needs and translated into earnings for the bank,” he said, adding that net interest income closed at N1 billion and non-interest income grew by 22 percent to N9.84 billion in the year under review.

Banjo Adegbohungbe, managing director/CEO, noted that foreign exchange illiquidity persisted despite stronger oil prices and higher foreign exchange reserves.

He said yields on fixed-income securities crashed during the year as interest rates rose, exacerbating the downward pressure on the interest income from the cost of funding, CRR and special bills.

Adegbohungbe said the bank’s Non-Performing Loans (NPL) ratio remained at zero (0%) percent for the 6th consecutive year.

The bank’s profit for the year under review dropped by 60.18 percent to N2 billion compared with N5 billion in the corresponding year.

“It has been a difficult operating environment. I think some of those challenges are not peculiar to us, across the entire industry you would have seen that revenues are generally either flat or very little growth,” he said immediately after the AGM.

“Put all these things (challenges above) to content, these are some of the reasons why the profit was significantly reduced in 2021 and we are working very hard, expecting that in 2022, we will revise that trend and bounce back to a trajectory of improved profitability year-on-year,” the bank’s CEO said.

“We are confident that by focusing on the opportunities ahead of us, maintaining our high standards in providing superior customer service, and leveraging our very unique and diversified business model to best serve our growing customer base, we will chart new horizons of progress for our company and continue to deliver sustainable earnings growth”, he said.