Introduction to Merchant Banking in Nigeria
For much of Nigeria’s financial history, merchant banking has quietly played a foundational, though often underestimated role. From trade finance and corporate advisory in the 1960s to today’s strategic intermediation and capital structuring, the journey of merchant banking has mirrored the nation’s broader economic transformation. Yet, in recent years, the sector has begun to reassert its relevance, not only as financial intermediaries but as strategic enablers, helping institutions navigate a more complex, regulated, and opportunity-rich environment.
A Legacy Reclaimed
The merchant banking sector traces its roots to the 1960s with the emergence of institutions like ICON Limited and Nigerian Acceptances Limited (now Sterling Bank), which provided early support in trade finance, leasing, and project finance. Through the 1980s and 1990s, merchant banks took on a more expansive role which included underwriting public offerings, advising on mergers and acquisitions, managing portfolios, and facilitating restructurings. The Central Bank of Nigeria’s 2005 consolidation exercise led to many merchant banks merging into larger entities, fading their identity. In 2010, the CBN reintroduced a dedicated merchant banking license, separating them from retail-focused institutions and restoring their corporate-centric mandate. This marked a return to focused, wholesale banking, reimagining merchant banking’s role in a modern economy.
Delivering Impact: Coronation Merchant Bank’s Role
Coronation Merchant Bank (“CMB” or the “Bank”), established under a focused wholesale banking model, stands at the heart of this new chapter. As regulatory clarity improves, financial institutions deepen their need for agility, and Nigeria’s capital markets expand, merchant banks like CMB are emerging as enablers of resilience and catalysts of value across both bank and non-bank segments. Over the last decade, merchant banks have repositioned themselves as critical enablers of capital formation, particularly in an era where traditional funding routes are under pressure, and CMB has stepped up with a suite of landmark transactions that reflect both scale and sophistication.
Capital Markets and Financial Institutions
In the capital markets space, the bank played a central role in Access Holdings Plc’s ₦351bn equity raise and participated significantly in Zenith Bank Plc’s ₦350.5bn and FCMB Group Plc’s ₦144.6bn capital offerings. In the debt market, CMB has structured commercial paper transactions for Nigeria’s corporate giants: ₦232.6bn for Dangote Cement Plc, ₦125.6bn for Dangote Sugar, and ₦114.4bn for MTN. Beyond capital markets, merchant banks are increasingly essential to the broader financial ecosystem, especially within the Financial Institutions (FI) segment. CMB has become a go-to partner for pension fund administrators (PFAs), insurance firms, asset managers, fintechs, and development finance institutions (“DFIs”).
Charting the Road Ahead: Opportunities and Obligations
As Nigeria’s economy contends with multiple inflection points, from rising capital thresholds to shifting demographics and fast-growing institutional savings, the merchant banking model is primed for reinvention. Within the asset management space, the steady rise in assets under management (“AUM”) is fuelling demand for diversification beyond traditional fixed income, prompting merchant banks like CMB to introduce foreign currency investment products, custodial solutions, and thematic vehicles that expand the investment landscape. The insurance sector, on the cusp of recapitalisation and consolidation under the Nigeria Insurance Industry Reform Bill, offers another frontier. Fintechs represent the most dynamic frontier, with merchant banks serving as structuring partners and funding collaborators.
Conclusion
In this shifting landscape, the role of the merchant bank has evolved from transactional financier to strategic partner. Institutions today are not merely seeking capital; they seek assurance that their partners understand regulatory nuance and can structure solutions with precision. Coronation Merchant Bank is driving innovation across enterprise banking, helping bridge Nigeria’s vast infrastructure gap by structuring project bonds, preparing bankable Public-Private Partnerships, and collaborating with Ministries, Departments, and Agencies (MDAs), subnational governments and DFIs to deliver real assets. By serving as long-term partners, offering not just capital but confidence, merchant banks like CMB are becoming catalysts, mobilising capital, fostering trust, and converting ambition into investable opportunities that advance national development and economic resilience.
