Banking
Coronation Bank’s Volatile Customer Deposits Worries Agusto
By Adedapo Adesanya
Nigerian foremost rating agency, Agusto & Co, has assigned top merchant bank in the country, Coronation Merchant Bank, an A+ rating.
In a recently released report, Agusto affirmed the A+ rating assigned to the bank with a stable outlook and stated that the rating reflects the bank’s position in the merchant banking space.
The rating agency stated that Coronation Merchant Bank had good capitalisation, good asset quality and good liquidity position.
However, it emphasised that the lender has high funding costs as well as a very volatile customer deposits, which it said are issues that could cause problems.
It noted that, “The rating assigned to Coronation Merchant Bank Limited is underpinned by good capitalisation, healthy asset quality, acceptable profitability and an experienced management team with a clear succession plan.”
“The rating is, however, constrained by concentration in the loan book, volatile customer deposits and high funding costs,” Agusto stressed.
In preparing the report, the agency said it took into cognisance the impact of the COVID-19 pandemic, which has led to severe uncertainty surrounding the Nigerian economy, on the bank’s businesses.
A review of the bank’s financial performance showed that as of 31 December 2019, the bank’s gross loans and advances stood at N72.7 billion, representing a year-on-year increase of 33.9 percent.
Also at full year 2019, the bank did not record any credit deterioration with the entire credit portfolio classified under stage 1. Its core capital grew by 6.3 percent to N33.7 billion as at December 31, 2019, more than double the regulatory minimum for merchant banks operating in Nigeria.
During the same period, the bank’s Capital Adequacy Ratio (CAR) stood at 19.2 percent surpassing the 10 percent regulatory threshold.
So far into the year, as at Q1 2020 ended March 31, Coronation Merchant Bank had about $310 million in trade finance lines including a $40 million trade finance guarantee facility obtained from the International Finance Corporation (IFC).
Overall, the rating agency is of the opinion that the bank is adequately positioned to grow business volumes moderately due by the prevailing economic conditions globally.
Agusto & Co noted that the rating will expire on June 30, 2020.
Founded in 1992, as a business information company with the view of gathering and providing information on select African economies and industries—the firm assigns risk ratings to issuers and issues present in Nigeria and on the African continent.
Banking
Seven Innovators Share N145m at 2024 Wema Bank Hackaholics
By Modupe Gbadeyanka
About N145 million was won by seven innovators at the grand finale of the Hackaholics 5.0 organised by Wema Bank Plc in Lagos, with the overall winner of the contest, Feegor, going home with N50 million for its innovative B2B wholesale marketplace and SaaS platform.
Feegor empowers small businesses to discover, negotiate, and source goods from verified suppliers while accessing credit through a Buy Now Pay Later (BNPL) model.
The first runner-up, Empayment AI, got N35 million for its AI-powered invoice discounting platform, revolutionizing how businesses manage payments.
Bloom Beauty, the second runner-up, was awarded N20 million for its personalized, AI-curated solutions that are transforming the beauty industry.
In the women-led category, MyTherapist secured the position of first runner-up, earning N12 million. MyTherapist connects users with mental health professionals, providing accessible and affordable therapy solutions for emotional well-being.
Meanwhile, MyItura, an innovator delivering remote healthcare services, clinched the position of second runner-up in the women-led category, receiving N8 million.
Both Northino and University X earned honourable mentions at the grand finale, each receiving N10 million. Northino was recognized for bridging traditional knowledge and modern technology through digital skills training for African native speakers, while University X was impressed with its transparent, all-encompassing platform for tertiary education management.
“We are delighted to celebrate the brilliance of our youth through the Hackaholics initiative. At Wema Bank, we are more than a bank; we are enablers of dreams and drivers of transformation.
“When I stood here earlier, the total prize money was N75 million. But, inspired by the potential we saw, we decided to increase the total prize pool to N145 million.
“Wema Bank’s legacy of 79 years remains rooted in innovation, and with initiatives like Hackaholics, we continue to empower lives and shape the future,” the chief executive of the lender, Mr Moruf Oseni, stated.
Also, his counterpart at Feegor, Ugonna Ginigeme, said, “I feel very grateful to God, my team, and everyone who has been part of this journey. Winning among so many great startups and entrepreneurs is humbling.
“I sincerely thank the MD, Wema Bank, and its management for this incredible opportunity. These are still early days, but we are determined to keep working, building, and creating a positive impact for SMEs and the Nigerian economy while building an all-around successful company.”
Business Post gathered that this year’s Hackaholics stood out with a record-breaking 3,500 applications from across Nigeria. From this pool, 10 finalists showcased innovative solutions addressing real-world challenges, ranging from education accessibility to sustainable agriculture, healthcare, and more.
Banking
CBN, Fagbemi Express Fears Over Rising MDAs’ Judgement Debts
By Adedapo Adesanya
The Central Bank of Nigeria (CBN) has joined the Attorney General of the Federation (AGF) and Minister of Justice, Mr Lateef Fagbemi (SAN) to raise an alarm over increasing judgment debts against Ministries, Departments and Agencies (MDAs) of the federal government.
The parties expressed this concern while speaking in Abuja at the 2024 roundtable with legal advisers of MDAs.
The apex bank disclosed that in 2015, the number of cases stood at 441, adding that this has since increased exponentially in terms of volume to 1,629 and also in financial value since then.
Among major concerns was that the sporadic rise in judgment debts recovered through garnishee orders by the courts threatened the availability of funds for development in the country.
The Deputy Governor of the central bank for Corporate Services, Mr Bala Bello, traced the increase to the introduction of the Treasury Single Account (TSA) policy of the federal government in August 2015.
Mr Bala, who was represented by the Director for Legal Services at CBN, Mr Kofo Salam-Alada, said: “It is also pertinent to point out that prior to 2015 the number of cases stood at 441 and has since increased exponentially in terms of volume to 1629 and also in financial value, post-2015.
“Our inquisition on this development revealed that the upturn was a result of apathy by most MDAs towards adequately defending their cases in court, which in most cases will result in a judgement against the MDA”.
He stated that to address the issues, stakeholders must demonstrate a commitment towards the adoption of appropriate case management strategies and standardised practices across MDAs.
Mr Bala added that the purpose of the roundtable was to jointly come up with solutions to tackle the disturbing situation.
“We all know that our country Nigeria is faced with dwindling income and escalating expenditure. This also makes it imperative for us all to put on our thinking caps and participate actively in this session in order to safeguard the limited resources available to the country.
“The CBN remains committed to playing its role as banker and providing economic and financial advice to the federal government,” he added.
On his part, the AGF in his speech expressed happiness with the CBN, particularly the legal department of the bank for the initiative and collaborative efforts with the Federal Ministry of Justice to rescue government agencies from mountains of judgement debts.
“Let me reiterate that as legal advisors to the government, we play a pivotal role in shaping the legal landscape of our nation, safeguarding the state’s assets, avoidance of undue embarrassment to government, and ensuring the smooth functioning of public services.
“Our work touches every facet of public life, from reviewing and rendering appropriate and sound legal advice to defending the government’s interests in court. It is important to note that the quality of our work directly impacts the effectiveness and legitimacy of government actions.
Mr Fagbemi, who spoke through the Solicitor General of the Federation and Permanent Secretary, Federal Ministry of Justice, Mrs Beatrice Jedy-Agba, stressed the importance of providing exceptional legal services by approaching each case with diligence, professionalism, high ethics, integrity, and commitment to upholding public policy.
“Let me use this opportunity to state that the government will no longer condone instances of liability arising from compromises, lack of diligent prosecution/defence of cases, or sheer incompetence exhibited by attorneys acting on behalf of the government.
“While we will take measures to recognise and reward diligence, we will not hesitate to apply appropriate sanctions to officers who have failed to live up to the ethics of both the profession and the public service”, he added.
Banking
Zenith Bank Expands Global Footprint With New Branch in Paris
By Aduragbemi Omiyale
A new branch of Zenith Bank Plc has been opened in Paris, the capital of France, by the United Kingdom subsidiary of the Nigerian lender.
This followed the granting of the final approval by France’s banking regulator, the Autorité de Contrôle Prudentiel et de Résolution (ACPR), in September 2024, allowing the branch to commence operations.
Earlier in November 2023, Zenith Bank strengthened ties with France by signing a Memorandum of Understanding (MoU) with the French Government to establish a subsidiary in France.
The MoU was signed in Lagos by the Founder and Chairman of Zenith Bank Plc, Jim Ovia, CFR, and the French Minister for Trade, Attractiveness and French Nationals Abroad, Mr. Olivier Becht during the French envoy’s visit to Nigeria.
The chief executive of Zenith Bank, Ms Adaora Umeoji, described the opening of the branch as “part of the broad strategy of the bank to extend its footprints across the major global financial centres and our efforts at following our customers’ businesses.”
“[The] Paris branch opening underpins the need to serve our customers and bolster trade and finance relationships between our customers in France and other countries. Zenith Bank’s expansion into France is a very strategic move as Nigeria accounts for 20 per cent of France’s trade with Sub-saharan Africa according to the Franco-Nigeria Chamber of Commerce and Industry (FNCCI).
“Having successfully dominated large parts of Anglophone Africa, we will leverage Zenith Bank Paris operations to lead the Francophone market starting from the Ivory Coast and Cameroun where we will be establishing subsidiaries very soon.
“This will facilitate business and trade flows between the African region and France, which is a major business partner to several African countries,” she said.
Also speaking at the opening of the branch on Wednesday, November 27, 2024, at 21 Rue de la Paix, Paris, the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, said, “I feel that one of the dividends of building trust for Nigerian institutions around the world is this event today, the opening of Zenith Bank in Paris.
“The presence of Zenith here can only help to engender trust of the French business community. They can learn about the opportunities in Africa, and of course, entry into Nigeria can be facilitated. We are happy and we are glad that we are all here to participate in this historic occasion.”
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