Rand Merchant Bank (RMB) Nigeria Limited has successfully completed a N16 billion equity capital injection, which led to a significant improvement in its core capital ratio in 2024.
However, in the 2024 financial year, RMB recorded its first non-performing loan (NPL) in over a decade of operations, stemming from delayed interest payments by a key obligor.
This resulted in a NPL ratio of 1.4% as of 31 December 2024, although the credit loss ratio remained well contained at below 1%.
Counterparty concentrations remained high with the top 20 obligors constituting 98.6% of gross loans as of 31 December 2024.
Similarly, sector concentrations are high as the manufacturing and transport and communications jointly accounted for 75.6% of the loan book as of 31 December 2024.
Foreign Currency (FCY) loans constituted a much lower 13.6% of the total loan book as of 31 December 2024, compared to 44.8% in December 2023, due to focused repayments and slowdown on new FCY lending.
Reflective of the high-interest rate environment and a reliance on institutional funding, the average cost of funds registered higher at 7.3% in 2024, compared to the 5.0% in 2023.
Rand Merchant Bank’s activities are largely funded by customer deposits, which accounted for 80.8% of the funding base as of 31 December 2024.
The customer deposits largely comprise price-sensitive wholesale deposits from corporates and financial institutions.
RMB Nigeria operates as a major player within the Nigerian merchant banking segment, accounting for 23.6%, 25.9% and 12.6% of the subsector’s total assets, loans, and customer deposits, respectively as of 31 December 2024.
RMB is a wholly owned subsidiary of FirstRand Group Limited, one of the largest financial services groups in Africa, with total assets of USD109.1 billion as of 31 December 2024.
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