By Peter Egwuatu
Managing Director/Chief Executive Officer, Coronation Merchant Bank, Mr. Abubakar Jimoh in this interview spoke on how the bank came into existence; its corporate ambition; financial performance; the capital market operations; how the merchant banking services can spur economic development, the future outlook, among others.
Why is it that Coronation Bank is coming out at this period that the industry is passing through serious challenges?
This company has been in existence since 1993, but it operated as a discount house, Associated Discount House Limited (ADHL), which became a leading financial services institution, thriving through the tough period of the Nigerian economy. In 2011, a new leadership emerged at ADHL, signaling a new beginning, posting consistent growth across all metrics and turning the industry challenges to opportunities.
We transitioned from a discount house to a well-diversified financial services company in 2015 offering investment and corporate banking, private banking/wealth management and global markets/treasury services to our select clients.
Despite the prevailing challenges in the macroeconomic environment, we strongly believe that there is a clear market demand for more sophisticated banking services from Nigeria’s top tier corporates.
We have a clear strategy based on our competitive advantage: exceptional local knowledge combined with world-class financial solutions. Our robust distribution network and strategic alliances – both regional and international – enable us to provide high quality services across West Africa and beyond. We are currently focused on capturing the massive inherent opportunities in the merchant banking space and have positioned our franchise to be a leading player in that segment. We are seeing clear and growing demand for specialised merchant banking services from our corporates, high net worth individuals and institutional investors.
What do you think will make you stronger in Merchant Banking operations, so that you don’t fail like others did in the past?
Over the years, the bank leveraged on sound corporate governance and support of core shareholders to wax stronger year-on-year over its 23-year history, surviving the industry tides which sank 40 per cent of its peers.
We have implemented a robust risk management framework backed by a well-defined risk management strategy, philosophy and culture for continuous improvement across all our businesses. We have also defined our risk appetite to be moderate and determined to focus on corporate clients, high net-worth individuals, and financial services businesses that meet our risk acceptance criteria.
How is the bank rated so far?
Driven by our aspiration to become Africa’s premier investment bank, Coronation Merchant Bank is already demonstrating industry leadership across key financial stability ratios. Our resilient business model has enabled our business to record considerable success in the few years of our operations despite the challenging economic environment. In 2016, Agusto & Co., Nigeria’s foremost rating agency, upgraded the Bank’s credit rating from ‘A-’ to ‘A’ with stable outlook, which is a valid testament to our strong capitalisation, good liquidity profile, robust risk management framework evidenced by the zero NPL (Non-performing Loan) ratio as at December 2016 and experienced management team.
How has the Bank performed since it started operation, especially with regards to financials?
We have consistently delivered value to all our stakeholders as evident by our impressive financial results in the last two years of our business operation. Our 2016 financial results showed an exceptional performance across all financial indices despite an extremely challenging business environment. Net-interest income increased by 86 per cent from N4.3billion in 2015 to N8.0 billion in 2016 as a result of increased efficiency in the overall funding mix and significant growth in our Balance Sheet. The Group delivered an impressive Profit Before Tax (PBT) of ¦ 5.3 billion in 2016, which represents an increase of 128 per cent over the last year’s performance of N2.3billion. Our Return on Equity, ROE, was 22.3 per cent in 2016, making us one of the most efficient banks in the industry.
Aside from the strong earnings performance, the Group also recorded a significant growth in its Balance Sheet in 2016. Total assets rose to N106.6billion from N78.3billion in December 2015, and shareholders fund increased to N25.8billion from N20.24billion, a valid testament to the competitiveness of the Group’s operations and its adaptability to market realities
Do you think your performance has been encouraging?
Our 2016 financial results showed an exceptional performance across all financial indices despite an extremely challenging business environment. In the last two years, we have consistently delivered an impressive financial results. Our financial performance demonstrates the effectiveness of our strategy as we continue to grow our market share in key segments of the economy. We strongly believe that our activities will continue to enhance the confidence of our investors in the medium term to long term.
What are your future plans?
Our journey towards market leadership is driven by a combination of service excellence, product innovation and market intelligence. This is the platform for success that creates sustainable value for our investors. We have a clear strategy based on our competitive advantage: exceptional local knowledge combined with world-class financial solutions.
Coronation Merchant Bank will focus on bringing its world class advisory and financing capabilities accompanied by innovative products and services to deepen and broaden wholesale banking and capital market space; whilst remaining committed to our values of strong governance and transparency.
Our vision is to become Africa’s premier investment bank, with a value proposition to deliver world class solutions to our esteemed clients in a cost effective manner whilst leveraging our local extensive knowledge and technology. We also leverage our best-in-class human capital to deliver value-enriching solutions to our clients. Our quest for industry distinction is evident in the recently unveiled corporate identity which has been designed to communicate the Group’s vision, ambition and inner strength.
What is the corporate ambition of the bank?
Our vision is to become the Africa’s premier investment bank, uniting global standards of talent, service excellence, innovative ideas and governance – all enhanced by our exceptional local knowledge. We are setting standards of excellence in the Nigerian banking sector and beyond.
What distinguishes the bank from others?
Our value proposition is to deliver world class solutions to our esteemed clients in a cost effective manner whilst leveraging our local extensive knowledge and technology. We do not plan to be everything to everybody but to be “all things to a select few”. We are setting standards of excellence in the Nigerian banking sector and beyond. We will demonstrate innovation by developing solutions to diverse customer problems, differentiating ourselves from competition with creative products and service offerings, and proactively initiating change and improvement measures for the industry.
At Coronation Merchant Bank, we have the best and brightest people, and we leverage their skills to ensure that the highest standards of client relationship management and professional services are provided to our clients. We establish connections and relationships at all management levels in each client organisation, and we work hard to maintain these relationships in order to build trust.
We are keen on Corporate Responsibility and Sustainability and we are committed to positively impacting the lives of our customers, other stakeholders and the society at large in a sustainable manner.