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.
The blockchain brings new financing options to the business market. For example, Bitcoin Cash casino has adapted to only using cryptocurrency. This way, it makes it easier for their customers to deposit and withdraw in a BCH casino. Entrepreneurs have taken note of this and are looking to invest more in crypto than in fiat markets.
Like Our Facebook Page
Latest News on Business Post
- CBN Extends Naira for Dollar Promo Deadline May 6, 2021
- Buhari Consoles Adeboye Over Son’s Death May 6, 2021
- Strengthening Fintech Ecosystem through Partnerships May 6, 2021
- Stanbic IBTC, LSETF Engage SMEs on Financial Planning May 6, 2021
- Nigeria’s Wheat Value Chain’s Growing Importance to Job Creation, Food Security May 6, 2021
- Bara, Old Oyo Empire Town, Under Threat—Archaeologist May 6, 2021
- FIRS to Debit Bank Accounts of Tax Defaulters May 6, 2021
- NCC, NIGCOMSAT Partner to Deploy 5G in Nigeria May 6, 2021
- UK Parliament Lauds AfDB COVID-19 Response Efforts May 6, 2021
- Bears Devour Unlisted Stocks by 0.27% Wednesday May 6, 2021
Economy5 years ago
Kwara Disburses N1.7b For Projects
Technology5 months ago
How To Link Your MTN, Airtel, Glo, 9mobile Lines to NIN
Feature/OPED1 year ago
Davos was Different this year
Economy3 years ago
FAAC: FG, States, LGs Share N655.18b in January
Economy2 months ago
MBA Forex Blames CBN for Inability to Return Investors’ Funds
General2 years ago
Ikeja Electric Explains How to Get Prepaid Metres via MAP
Banking3 years ago
Sort Codes of GTBank Branches in Nigeria
Feature/OPED2 months ago
COVID and the Growth of Technology in Nigeria