Banking
Coronation Merchant Bank’s Management Has High Degree of Credibility—Fitch
By Modupe Gbadeyanka
A renowned global rating agency, Fitch Ratings, says the management team of Nigeria-based Coronation Merchant Bank Limited has demonstrated “a high degree of credibility.”
In a statement to announce the rating of the bank’s Long-Term Issuer Default Rating (IDR) at ‘B-‘ with a negative outlook, Fitch said the company’s “strategy is well defined although execution could be hampered under current difficult operating conditions.”
In the statement made available to Business Post on Monday, it was stated that apart from the management quality being “a relative strength,” it was equipped with “experience and depth commensurate with the complexity of the business.”
The rating agency noted that the company has good asset quality, reporting a zero impaired loans (IFRS 9 Stage 3)/gross ratio at end-1H20, which has also been the case for the last four financial years.
“This reflects the bank’s lower risk business model and risk management capability,” it noted.
“Given the severity of the economic crisis, we expect a modest rise in Stage 2 and Stage 3 loans over the next 18 months.
“Asset quality risks are exacerbated by very high credit concentrations by the borrower and significant foreign-currency-denominated trade loans (forming 60% of total loans at end-1H20),” the statement said.
It was noted that bank’s viability rating (VR) was put at ‘b-‘, while the national long-term rating was put at ‘BBB(nga)’ to reflect Nigeria’s (B/Negative) challenging and volatile operating environment, which influences the firm’s financial and non-financial rating factors.
“The negative outlook on Coronation Merchant Bank’s long-term IDR reflects our view that prevailing operating conditions create downside risks to our assessment of the bank’s funding and liquidity profile as well as pressure on asset quality and earnings, but there is a degree of tolerance in these factors,” it said.
Fitch said in the statement that the lender’s primary risk exposure is to short-term (up to one year) self-liquidating corporate loans and traditional trade finance and Nigerian treasury bills.
“This is balanced by the bank’s good management of credit and market risks. Operational risk is inherent in the business but losses are low,” it said.
It was stated that the bank is well-capitalised, reporting Tier 1 and total capital adequacy ratios of 16.6 per cent and 17.2 per cent, respectively, at end-1H20.
“However, capital ratios have modestly declined from end-2019 due to fast growth and currency devaluation. Fitch expects further modest capital pressure to come from lower earnings,” it said.
The statement said the company’s corporate deposits are highly concentrated by name and around 17 per cent were in foreign currency at end-1H20.
“Given the nature of its trade finance business, the bank has a reliance on short-term foreign currency funding (around 25 per cent of its total foreign currency funding), which could decline if sovereign risks rise, leading to pressure on foreign currency liquidity.
“Balance sheet liquidity is underpinned by the short-term nature of the bank’s trade finance assets and large holdings of liquid assets. The bank is highly liquid in local currency but conversion to foreign currency is challenging under current market conditions,” Fitch said.
Coronation Merchant Bank, a leading independent merchant bank, was established in 2015, and it engages in corporate and trade finance, domestic capital markets and investment banking.
But its funding structure is a relative rating weakness as the bank is funded entirely by price and confidence sensitive wholesale funding, including corporate deposits, short-term bank borrowings and commercial paper. Around 37 per cent of the firm’s non-equity funding was in foreign currency at end-1H20.
By Adedapo Adesanya
A Nigerian digital lending fintech, Allawee, has collaborated with Mastercard to launch a credit-building card designed to enhance financial access for federal civil servants and National Youth Service Corps (NYSC) members.
This product, facilitated by a secure Mastercard platform and issued in collaboration with Providus Bank, and Remita, provides instant access to credit and financial flexibility to over 720,000 federal civil servants and NYSC members all through the Allawee app.
Despite Nigeria’s significant economic potential, over 70 per cent of bank account holders lack access to credit, according to the National Bureau of Statistics (NBS).
The Allawee credit card promises to address this gap, offering a solution that caters to the unique financial needs of Nigerians.
Nigeria as a market is dominated by debit and prepaid cards, so this initiative aims to promote responsible credit usage, combines seamless digital onboarding, user-friendly features, and responsible credit management tools in one platform.
Launched in December 2024, the Allawee credit card supports the Nigerian government’s objective of increasing credit availability to 50 per cent of working Nigerians by 2030. The card offers a secure and seamless way to access credit while helping users build a credit profile, aligning with Mastercard’s mission to drive financial inclusion.
“We are thrilled to collaborate with Allawee on this innovative credit solution, which aligns perfectly with Mastercard’s commitment to bring one billion people into the digital economy by 2025.
“The Allawee credit card provides instant access to credit while also empowering civil servants and NYSC members in Nigerian to build their creditworthiness, further advancing financial inclusion across the country,” said Mrs Folasade Femi-Lawal, Country Manager and Area Business Head for West Africa at Mastercard.
Users can download the Allawee credit card, apply for a loan, receive approval, and start transacting immediately. Once approved, the credit is disbursed directly onto a co-branded card, giving users full control over their funds. The card allows for flexible usage across POS terminals, ATMs, and online transactions, enabling greater financial freedom.
“We launched this card to help Nigerians gain access to instant, affordable credit while building their credit history. Whether it’s handling daily purchases or taking care of life’s emergencies, our customers now have an easy way to cover expenses.
“With Mastercard, we are giving them the convenience to spend their credit at millions of retail locations in Nigeria and around the world, both online and in-store,” said Mr Ikenna Enenwali, CEO of Allawee.
The Allawee credit card offers instant credit access through a fast, secure, and fully digital application process, with wide acceptance at Mastercard online and physical retail locations globally. Customers benefit from flexible repayment options, choosing their credit limits (up to ₦1,000,000) and repaying in installments over four months.
By Adedapo Adesanya
The Nigerian Communications Commission (NCC) has authorised telecommunications companies to disconnect the Unstructured Supplementary Service Data (USSD) codes assigned to nine financial institutions over a N200 billion debt.
The directive signed by NCC’s Director of Public Affairs, Mr Reuben Muoka, on Tuesday and obtained by Channels Television, noted that the affected banks are to pay the outstanding debts by January 27, 2025, or risk losing access to their USSD codes.
According to the NCC public notice, nine out of 18 financial institutions had not complied with regulatory directives.
The affected financial institutions include Fidelity Bank Plc, First City Monument Bank, Jaiz Bank Plc, Polaris Bank Limited, Sterling Bank Limited, United Bank for Africa Plc, Unity Bank Plc, Wema Bank Plc, and Zenith Bank Plc.
It said while other banks have cleared their debts, the total amount initially owed by the financial institutions was reported to exceed N200 billion.
According to the NCC, some of the invoices have remained unpaid since 2020, and has been a source of tussle for years.
“By the information made available to the commission as at close of business on Tuesday, 14th January 2025, of a total of 18 financial institutions, the nine institutions listed below have failed to comply significantly with the directives in the Second Joint Circular of the Central Bank of Nigeria and the commission dated December 20, 2024, for the settlement of outstanding invoices due to MNOS, some since 2020,” a part of the notice read.
The affected USSD codes include *770#, *919#, and *822#, among others, could be reassigned to other applicants if the debts remain unresolved.
The regulator noted that banks’ failure to comply with the CBN-NCC joint circular also means that they are unable to meet the good standing requirements for the renewal of the USSD codes assigned to them by the commission.
It added, “In fulfilment of its consumer protection mandate, the commission wishes to inform consumers that they may be unable to access the USSD platform of the affected financial institutions from January 27, 2025.”
The NCC emphasised that the financial institutions had been duly notified of the need for immediate compliance and warned that consumers may face service disruptions if the issues remain unresolved.
By Adedapo Adesanya
The Nigerian Communications Commission (NCC) has authorised telecommunications companies to disconnect the Unstructured Supplementary Service Data (USSD) codes assigned to nine financial institutions over a N200 billion debt.
The directive signed by NCC’s Director of Public Affairs, Mr Reuben Muoka, on Tuesday and obtained by Channels Television, noted that the affected banks are to pay the outstanding debts by January 27, 2025, or risk losing access to their USSD codes.
According to the NCC public notice, nine out of 18 financial institutions had not complied with regulatory directives.
The affected financial institutions include Fidelity Bank Plc, First City Monument Bank, Jaiz Bank Plc, Polaris Bank Limited, Sterling Bank Limited, United Bank for Africa Plc, Unity Bank Plc, Wema Bank Plc, and Zenith Bank Plc.
It said while other banks have cleared their debts, the total amount initially owed by the financial institutions was reported to exceed N200 billion.
According to the NCC, some of the invoices have remained unpaid since 2020, and has been a source of tussle for years.
“By the information made available to the commission as at close of business on Tuesday, 14th January 2025, of a total of 18 financial institutions, the nine institutions listed below have failed to comply significantly with the directives in the Second Joint Circular of the Central Bank of Nigeria and the commission dated December 20, 2024, for the settlement of outstanding invoices due to MNOS, some since 2020,” a part of the notice read.
The affected USSD codes include *770#, *919#, and *822#, among others, could be reassigned to other applicants if the debts remain unresolved.
The regulator noted that banks’ failure to comply with the CBN-NCC joint circular also means that they are unable to meet the good standing requirements for the renewal of the USSD codes assigned to them by the commission.
It added, “In fulfilment of its consumer protection mandate, the commission wishes to inform consumers that they may be unable to access the USSD platform of the affected financial institutions from January 27, 2025.”
The NCC emphasised that the financial institutions had been duly notified of the need for immediate compliance and warned that consumers may face service disruptions if the issues remain unresolved.
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