GCR Upgrades Coronation Group Ratings to A-/A1
GCR Ratings has upgraded Coronation Group Limited’s (CGL) national scale long and short-term issuer ratings to A-(NG) and A1(NG), respectively, from BBB+(NG) and A2(NG) previously.
According to the rating, the outlook has also been revised to stable from positive.
The rating upgrade reflects improvements in the group’s risk profile following a sustained decline in related-entity exposures, GCR said.
It added that the ratings are also supported by the group’s good leverage metrics, strong earnings profile and adequate liquidity coverage.
The operationally diversified financial services group, which provides various capital market offerings that span trusteeship, wealth management, securities trading, venture capital investment, and register management through its direct subsidiaries.
Ratings analysts said these are complemented by banking and insurance offerings through affiliates within the broader ecosystem, thus creating various opportunities for cross-selling and cost management that enhance its franchise strength and profitability.
These advantages continue to drive rapid expansion in the group’s total assets under management, which grew by 32.0% to NGN573.1 billion in the 2025 financial year, according to GCR.
Ratings analysts said, notwithstanding, the group is evolving and has significant scope for growth, particularly in terms of market share across all the industries it operates in.
“We have also noted some level of earnings concentration to the Coronation Capital Limited subsidiary, which accounted for 87% and 76% of the group’s profit before tax in 2024 and 2025, respectively”
GCR said the planned full acquisition of the insurance business by the group could enhance the competitive position assessment.
The rating note explained that Coronation Group’s earnings are driven by stable revenue sources, including fees and commissions, as well as interest income.
Ratings analysts said that although operating revenue declined by 35.0% in 2025, this was due to the significant one-off trading gains recorded in the prior year.
Positively, the group’s more stable revenue sources grew by 16.4% to register at NGN25.2 billion. CGL’s operational efficiencies continue to support its EBITDA margin, which has averaged 60.3% over the past three years, GCR stated.
Ratings analysts see a decline in the group’s related-party exposures as a positive rating factor, which could support a stronger earnings assessment if sustained.
Despite total debt rising to NGN63.3 billion as of 31 December 2025, from NGN37.5 billion in 2024, net debt to EBITDA remained strong at 0.69x, supported by significant cash holdings.
However, the funds from operations (FFO) to net debt ratio declined sharply to 25.6% from 96.6% in 2024, while the EBITDA to interest expense ratio moderated to 2.7x from 4.3x, given the decline in operating revenue during the year.
Looking ahead, management plans to pay down related entity loans totalling N34.3 billion over the next 12 months, which could support even more conservative leverage metrics.
GCR said sustained weakness in the FFO-to-Net Debt and EBITDA-to-interest expense ratios could pressure the assessment going forward.
CGL’s liquidity assessment is strong, with liquidity sources covering uses by an average of 1.7x over the last three years, according to details from the rating note.
GCR hinted that the group’s sound liquidity profile is underpinned by cash balances and funds generated from operations. “We expect these cash sources to comfortably support the planned debt repayments in 2026, with the coverage ranging from 1.5x to 2.0x over the next 12 to 18 months”.
The stable outlook reflects analysts’ expectations that the group’s credit profile will be maintained, underpinned by its stable earnings profile and strong liquidity coverage. Zenith Bank Tops Banking Valuation Chart after Rallies
