How Expertise Earned Coronation Merchant Bank Top Recognition

Like a Phoenix from the ashes, Coronation Merchant Bank, a leading investment bank in Nigeria, which emerged from a deliberate transformation exercise, has signalled its readiness for industry leadership in expertise and professionalism, Raheem Akingbolu

To market men and women, students and other everyday bank customers, who go into the banking hall to save or collect money, the name Coronation Merchant Bank, may not immediately register in their minds. But for investors, manufacturers and players in the financial sector, Coronation Merchant Bank, is like a messiah and investment vehicle in today’s market.

Like other international merchant banks, Coronation Merchant Bank is a financial institution that engages in underwriting and business loans, catering primarily to the needs of large corporates, transnational companies and high net worth individuals. In the British market, the term merchant bank refers to an investment bank, and institutions in that category are pivotal to socio-economic development because of their intermediary roles, which support infrastructural development and big-ticket transaction funding.

Since commencing operations in 2015 as Coronation Merchant Bank, the bank has transitioned from a pure play discount house to a well-diversified financial services powerhouse, offering investment and corporate banking, private banking/wealth management and global markets/treasury services to its select clients. The Group also offers, through its subsidiaries, a number of other services such as: securities trading/brokerage, asset management and trustees services. The subsidiaries are Coronation Securities Limited, Coronation Asset Management Limited and Coronation Trustee Limited

Merchant Bank of the Year award In what looked like a testament to its gradual emergence as Africa’s premier investment Bank, Coronation Merchant Bank was recently named the ‘Merchant Bank of the Year’ at an award ceremony organised by a top business journal in Lagos.

In emerging as the winner in his award category, Coronation Merchant Bank outperformed FSDH Merchant Bank, FBN Merchant Bank and Rand Merchant Bank. Specifically,

A review of the criteria for the award category shows that Coronation Merchant Bank outstripped other nominees in the following key performance indicators, Profit After Tax (PAT), Loan Growth (LG), Return on Average Asset (ROAA) and Return on Average Equity (ROAE). Coronation Merchant Bank grew its PAT by 59.30% in the year under review way ahead of the other banks.

The Bank also demonstrated industry leadership in loan growth, which validates its support for the development of the nation’s economy. Over the past one year, Coronation Merchant Bank grew its loan portfolio by 817.26 %, attesting to the effective performance of its role as a financier Nigeria’s top corporates.

Receiving the award, the Bank’s Managing Director, Jimoh Abubakar dedicated the award to clients who provided the bank the opportunity to showcase its expertise and to the Bank’s employees whose commitment made Coronation Merchant Bank’s exceptional services and innovation evident. He added that “As a team of professionals with uncommon potentials, we are not only determined to become Africa’s premier investment bank, it is also our resolve to continuously create value for our customers, investors and other stakeholder groups”.

While opening the award ceremony, the organisers described the awards as “an initiative conceived to recognise competition and innovation in one of the fastest growing and fierce markets, adding that the awards programme is renowned for its rigorous and transparent process in selecting outstanding financial institutions”.

Undoubtedly, the meaning of this statement is embedded in Coronation Merchant bank’s efficiency in resource management. Ahead of industry operators nominated in the Merchant Bank of the Year Award category, Coronation Merchant Bank demonstrated an unrivalled capacity to maximise that value of its resources by putting its asset and equity to effective use.

The Bank’s best-in-class 5.55% Return on Average Asset (ROAA) and 22.26 Return on Average Equity (ROAE) is attributable to its huge investment in innovative ideas and adherence to sustainable business practices. Expectedly, these have continued to propel the Bank and position the brand for creation of new standards in the African banking landscape.

Significance of the Award Since the award was announced, not a few analysts have reviewed the award process and commended the vision of the drivers of the Coronation brand for their ability to endure the current economic situation and pilot the affairs of the bank impressively, despite all odds. Again, its ability to contest with older banks in the award category, and emerged the winner of the coveted award has been described as a real test of its strength and an unequivocal pointer to the direction the institution is heading.

Like other investment banks, Coronation Merchant Bank, is believed to have not only lived up to its responsibility as a trusted intermediary that provides brokerage, fundraising, and financial advisory services on a large scale to businesses and on smaller scale to wealthy individuals, it has also, on many occasions, assisted in international transactions involving multinational and transnational corporations.

From any angle one chooses to look at it, the bank is moving towards achieving the vision of its founding fathers to become Africa’s premier investment bank, with a value proposition to deliver world-class solutions to its esteemed clients in a cost-effective manner; whilst leveraging their extensive knowledge of the local environment and technology. ‘’We are also poised to leverage our best-in-class human capital to deliver value-enriching solutions to our clients,’’ its Chief Executive Officer, Mr. Jimoh Abubakar, said in a recent interview.

Abubakar also stated that the group’s quest for industry distinction is made evident in the recently-unveiled corporate identity, which has been designed to effectively communicate their vision, ambition and strength.

Reacting to Coronation Merchant Bank’s recent report that it had zero NPL, at a time many analysts believed that Nigerian banks are exposed to two major macroeconomic risk situations of slowing economy and foreign exchange scarcity, which could be considered as automatic drivers of non-performing loans, its CEO had emphatically stated that the bank identified the segments of the market and the economic sectors that it wants to play.

“The economic challenge Nigeria has experienced in the last three years – due to the fall in crude oil prices and the drop in oil output – has adversely impacted both individuals and corporate entities. The significant decline in foreign exchange earnings has resulted in the depreciation of the naira in both the official and parallel markets. The pressure on the naira has caused a spike in inflation and introduced financial stability risks. All these factors have combined to weaken borrowers’ repayment capacity, thus affecting the performance of the risk assets in financial institutions.

At Coronation Merchant Bank, we have identified the segments of the market and the economic sectors we want to play in. We have also defined a robust risk management framework with strict risk acceptance criteria. We maintain a disciplined and prudent approach in all our exposures to both dollar and naira-based assets in line with the overall risk management framework of the Group. We employ world-class risk management capabilities that help to balance risk and return,” he said.

The brand at a glance Coronation Merchant Bank was initially founded as Associated Discount House Limited (ADHL) in 1993 by a consortium of reputable financial institutions. ADHL became a leading financial services institution, thriving through the different headwinds the Nigerian economy has experienced. In 2011, a new leadership emerged at ADHL, signaling a new beginning for the institution, which has posted consistent growth across all metrics and turned challenges into opportunities.

Since commencing operations in 2015 as Coronation Merchant Bank, the bank has transitioned from a pure play discount house to a well-diversified financial services powerhouse, offering investment and corporate banking, private banking/wealth management and global markets/treasury services to its select clients. The Group also offers, through its subsidiaries, a number of other services such as: securities trading/brokerage, asset management and trustees services. The subsidiaries are Coronation Securities Limited, Coronation Asset Management Limited and Coronation Trustee Limited.

Over its 23-year history, the institution leveraged on sound corporate governance and the support of its shareholders to wax stronger and survive industry tides that sank 40% of its peers. With the recent award and the rate at which the bank is growing, one may not be wrong to describe Coronation Merchant Bank as the nation’s economic rescue agent, and investors’ friend, which recent listing of mutual funds – Coronation Money Market, Coronation Fixed Income and Coronation Balanced Funds implied.