By Adaeze Okechukwu
CORONATION Merchant Bank Limited said its gross earnings rose by 66 percent to N25.2 billion for the financial year ended December 2017 from N15.2 billion in 2016. Chief Executive Officer of the investment bank, Mr. Abubakar Jimoh, disclosed this during the company’s third annual general meeting held in Lagos last week.
Jimoh explained that growth was “driven primarily by the strong performance in core revenue lines,” noting that the bank also recorded 67 percent growth in its interest income which rose to N22.4 billion from N13.4 billion in 2016, demonstrating high quality of earnings and sustainability of its core business.
However, this did not result in an improved net-interest margin. The net interest margin remained relatively unchanged due to the interest expense component, which shot up by 167 percent to N14.4 billion from N5.4 billion in 2016.
In addition, the company’s Profit before Tax (PBT) fell marginally to N5.1 billion from N5.3 billion in 2016. This was in spite of the 57 percent increase in non-interest income which stood at N2.8 billion, buoyed by gains on investment securities.
Jimoh noted: “We make deliberate effort to increase our exposure to obligors who fall within our risk acceptance criteria in target economic sectors. We will continue to maintain a disciplined and prudent approach in our exposures to dollar based assets in line with our overall risk management framework and evidenced in our growth in loan book of 42 percent which increased from N22.7 billion to N32.3 billion with zero non performing loans, NPL.”
With respect to declared dividend, Chairman of the bank, Mr. Babatunde Folawiyo, during the AGM, proposed dividend of 30 kobo per ordinary share which was approved by the shareholders. This 100 percent increase in the dividend per share to 30 kobo from 15 kobo, will increase the company’s dividend payout ratio to 32 percent from 15 percent in 2016. Thus, the company will make a total dividend payment of N1.5 billion this year.
Folawiyo added: “While general economic conditions and the regulatory environment remain tight, we believe that our new business and lending strategies, embedded risk management culture and continuous cost savings will enable us stand firm throughout this period. In the coming years, we will focus on the disciplined implementation of our growth strategy to drive efficiency in all segments of our business leveraging financial technologies (fintechs) and process re-engineering.”