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Coronation Merchant Bank Records 66% Growth in Gross Earnings for 2017

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Coronation Merchant Bank Limited announced its 2017 full year results to stakeholders at its Annual General Meeting held in Lagos, in which the bank posted a Profit Before Tax of N5.1 billion.

Speaking at the AGM, Abu Jimoh, Group Managing Director/CEO of Coronation Merchant Bank Limited said that, “despite the tough market conditions that characterized significant parts of the year, the underlying business fundamentals of the bank remained strong as reflected in the Gross earnings growth of 66% to N25.5Bn in 2017.

As we progress in our journey to become Africa’s premier Investment bank, we remain committed to providing our clients with superior financial services whilst generating attractive and sustainable returns for shareholders.

“The impressive results of the bank in the last 3 years demonstrate the effectiveness of our strategy, the quality of our past decisions and the commitment of our board & management to maximize shareholder value whilst actively expanding our franchise in select, high growth markets where we believe we have a competitive advantage.

“Coronation MB Group recorded a notable improvement in key performance metrics in 2017, despite the tough and challenging operating environment.

Our interest income growth of 67% y/y and non-interest income growth of 57% in 2017 re-affirm the sustainability of our core business growth. We will continue to gain momentum in our efforts to achieve more diversified earnings, as we strengthen our subsidiaries offerings.”

According to Jimoh, “our deliberate focus on the efficiency of our business operations has continued to yield considerable returns for the bank. Despite the high inflation rate, Cost-to-income ratio increased marginally by 90bps to 46.1% (Dec 2016: 45.2%), reaffirming the Bank’s commitment to rein in costs while improving operating efficiency.

“Aside from the strong earnings performance, the Group recorded a significant growth in its Balance Sheet in 2017.

Total assets increased by 28% to N136.7bn from N106.6bn in December 2016, and shareholder’s funds increased to N29.5bn from N25.9bn – a valid testament to the resilience of the Group’s operations and its adaptability to current market realities and challenges.

“We will continue to maintain a disciplined and prudent approach in asset creation in line with our overall risk management framework and evidenced in our growth in loan book of 42% which increased from N22.7bn to N32.3bn with zero NPL.”

He said while general economic conditions and the regulatory environment remained tight, the bank believed that its new business and lending strategies, embedded risk management culture and continuous cost savings, would enable it to 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 fintech and process re-engineering,” he said.

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E-Financial

Diamond Bank’s Managers to Lose Jobs over Access Bank Acquisition

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Diamond Bank Plc’s acquisition by Access Bank will come at a heavy cost to the Diamond Bank management team, especially on job security.

 

The management team is likely to be disbanded.

 

“You cannot have two managing directors of a bank, domestic and foreign operations and even chief financial officers in one bank. One has to give way and the Diamond Bank staff will be the casualties. The Diamond Bank management team should know that their jobs are gone,” Richard Obire, a former chief at Diamond Bank said.

 

According to him, Access Bank is a very ambitious lender and that is one of the characteristics of its management team.

 

Obire said: “They want to be big, and perhaps, the biggest bank in Nigeria and that was presented to them on a platter of gold by the Diamond Bank opportunity. Diamond Bank is now a small bank compared to its peers. It is now a tier-3 bank. I do not know the terms of the transaction but they will lose their brand name.

 

“It is the reality of business. Diamond Bank has such a brilliant brand name and customer base and these are what Access Bank will inherit. The name Diamond Bank is gone forever and the next will be integration, which will lead to exit of the bank’s management team.”

 

An industry source told The Nation that Access Bank’s decision to acquire Diamond followed a presentation made to it last week by its financial advisers in London, which showed huge strengths inherent in Diamond Bank.

 

The board of Diamond Bank Plc yesterday finally announced its merger with Access Bank Plc.

 

Both banks recently denied The Nation’s exclusive report of November 12 on any merger plans.

 

In the report, this paper exclusively said: “It was gathered that both financial institutions have reached an agreement in broad terms on the acquisition. What is left is the valuation of assets, with a view to determining the level of compensation and systems’ integration, the sources said, pleading not to be named because they are not allowed to talk to the media on the matter.

 

“It was learnt that the development leading to the impending acquisition was triggered by Diamond Bank directors who approached Access Bank for intervention in a bid to stave off a possible regulatory intervention that could lead to the withdrawal of the lender’s operating licence in the light of the bank’s depleting capital adequacy ratio on account of a huge  Non Performing Loans (NPLs) portfolio put at over N150 billion.”

 

Uzoma Dozie, Diamond Bank’s chief executive officer said  the potential merger of the two banks would create Nigeria and Africa’s largest retail bank by customers.

 

He added that the transaction to be completed in the first half of 2019 was in the best interest of all stakeholders.

 

Dozie said the completion of the merger was subject to certain shareholder and regulatory approvals.

 

He said: “The proposed merger would involve Access Bank acquiring the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a Scheme of Merger.

“Based on the agreement reached by the boards of the two financial institutions, Diamond Bank shareholders will receive a consideration of N3.13 per share, comprising N1 per share in cash.”

 

Dozie also said the transaction would include the allotment of two new Access Bank ordinary shares for every seven Diamond Bank ordinary shares held as at the implementation date.

 

“The offer represents a premium of 260 per cent to the closing market price of 87k per share of Diamond Bank on the Nigerian Stock Exchange (NSE) as of Dec. 13, 2018, the date of the final binding offer,” Dozie said.

 

He said the bank’s shares would be absorbed into Access Bank at the completion of the merger and Diamond Bank would cease to exist under Nigerian law.

 

“The current listing of Diamond Bank’s shares on the NSE and the listing of Diamond Bank’s global depositary receipts on the London Stock Exchange will be cancelled, upon the merger becoming effective.

 

“The board of Diamond Bank believes that the proposed combination of the two operations provides an exciting prospect for all stakeholders in both businesses,” he said.

 

Herbert Wigwe , Access Bank chief executive officer said: “Access Bank has a strong track record of acquisition and integration and has a clear growth strategy.

 

“Access Bank and Diamond Bank have complementary operations and similar values, and a merger with Diamond Bank with its leadership in digital and mobile-led retail banking.

 

“This could accelerate our strategy as a significant corporate and retail bank in Nigeria and a Pan-African financial services champion.”

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Okonkwo, Fidelity Bank MD Faces Alleged $153m Money Laundering Charge

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Mr. Nnamdi Okonkwo

A Federal high court sitting in Lagos, Southwest Nigeria has adjourned till 14 January 2019 for the arraignment of Nnamdi Okonkwo, managing director of Fidelity Bank Plc, for allegedly laundering the sum $153,310,000 while Diezani Allison-Madueke, former Petroleum Mminister and one Ben Otti that supposed be arraigned with him was alleged to be at large.

 

Others to be arraigned alongside the former bank boss are Dauda Lawal, Lanre Adesanya and Stanley Lawson.

 

However when the matter was mentioned today, Economic and Financial Crime Commission (EFCC), prosecutor Barrister Rotimi Oyedepo  told the court that Nnamdi Okonkwo and Dauda Lawal were present in court while Lanre Adesanya and Stanley Lawson were absent.

Consequently, he urged the court to issue a bench warrant against the defendants who were absent to enable the prosecution get them to attend trial.

 

The counsel representing the absentee defendants, Mr Ademola Adesina urged the court not issue bench warrant because their absence is not deliberate as the two of them are abroad for medical treatment and once they are through they will come to court.

 

He then asked the judge that the case be adjourned.

 

The two senior advocates, Dr Hassan Liman and Ishaka Dikko appearing for the second defendant Dauda Lawal told the court that they are worried about the liberty of their client, as there is fear that he may be arrested after leaving the court premises therefore need the assurance of the prosecution that his right will not be violated.

 

Other two senior Advocates Mr Paul Erokoro and Dr Dapo Olanipekun appearing for Nnamdi Okonkwo also exercise the same fear but in his response Mr Oyedepo urge the defence lawyers to give undertaking that they are going to produce the defendants next adjourned date.

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The presiding Judge Muslim Hassan, while adjourning till 14th of January, 2019 for the arraignment of the defendants ordered that the right of the defendants should not be tampered with.

 

In a 14 count charge filed before the court by EFCC prosecutor Mr Rotimi Oyedepo, it was alleged that Nnamdi Okonkwo, Dauda Lawal ,Lanre Adesanya, Stanley Lawson and (Dieziani Alison Madueke  and Ben Otti now at) large between 2014 and 2015 in Nigeria within the jurisdiction of the court conspired amongst themselves to conceal in Fidelity Bank Plc the total sum of $153,310,000 which sum they reasonably ought to know forms part of unlawful activity to wit: corruption and thereby committed an offence contrary to section 18(a) 15(2) (a) of the money laundering (prohibition)  Act2011as amended and punishable under section 15(3) of the same Act.

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CBN Orders Banks to Report Fraud or Face Sanctions

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The Central Bank of Nigeria (CBN) has warned banks in the country to enhance their reporting on fraud related cases in accordance to its directives, adding that it would no longer condone failure to do so.

 

Mr. Sam Okojere, director, Payment System Management Department at CBN, said: “Consequently, banks must generate fraud data by reporting incidents, analyse these data and handle it in such a way that the information generated will help in understanding and addressing customer needs.

 

“A system where participants fail to report fraud as captured by the relevant CBN directive will no longer be condoned.

 

“We must also pay attention to risk management and embark on aggressive fraud awareness campaigns in the days ahead in order to boost customers’ confidence.”

Godwin Emefiele, CBN Gov.

Continuing, Okejere added: “As a nation, we are under siege from cybercriminals who are leveraging the power of the internet to commit fraud and crime on an unprecedented scale, costing our economy millions if not billions each year.

 

“It has thus become necessary to review and strengthen the existing rules, and enact new regulations to stem these problems. In addition, banks must begin to evolve with the speed of Financial Technology (FINTECH) players, who are quick at developing financial solutions that are driving the financial sector.

 

“Taming fraud will continue to be a focus for the forum, as we know the impact fraud has in diminishing trust which is an essential ingredient in building an internationally recognised and nationally utilised payments system.”

 

On the African collaboration and the establishment of a continental body to fight electronic fraud, Okejere said: “The steering committee of your forum met in October and one of the important discussions was the Establishment of an Africa new liaison.

 

“The forum was invited to make presentation to the Africa Union (AU) on prospects of establishing an AeFF and this proposal was well received. I will also agree that this idea is coming at a good time, as it was recently revealed that a new fraud scheme termed ‘ATM Cash out’ had emerged where fraudsters insert a malware to corrupt ATM systems and illegally authorises withdrawals that often run into losses of millions of dollars.”

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