By Gbenga Adedayo
NOVA Merchant Bank Limited has received an investment rating of ‘Bbb’ from Nigeria’s first credit rating agency and a pan African leader in credit reports, Agusto & Co. limited, whose strong credibility presence and ratings are globally accepted in Nigeria and across the globe.
The rating assigned to Nova Merchant Bank, according to Agusto & Co, reflects the lender’s strong capitalisation ratios, acceptable asset quality and strong liquidity profile.
Agusto & Co confirmed that the rating took into cognisance the bank’s limited financial track record, though led by an experienced management team. The subdued macroeconomic environment and its attendant impact on the banking industry is also a rating concern, the rating firm said.
Elated Nova Merchant Bank’s Managing Director/CEO, Anya Duroha, said: “The award of investment grade ratings by two leading rating agencies is another significant milestone in the history of the Bank. It further assists us in our plans to scale up our operations this year and deliver value to our customers and all other stakeholders”.
The bank’s Chairman, Mr. Phillips Oduoza, also said: “These ratings are further validation of the strength of the foundation which has been laid for the continued future success of the Bank. On behalf of the Board, I will like to commend the management team for all their effort in achieving this milestone debut rating record.”
Agusto & Co hinted that although merchant banks have a low market share of the Industry’s assets at 0.22%, the segment has expanded over the last few years, with five licensed operators as at FYE2018 from a nil position in 2012.
Merchant banks are competing efficiently by taking advantage of a wide range of financial services conferred by the license. Such services include investment banking, corporate finance, asset management, advisory, wealth management, capital markets and securities & trading activities, Agusto & Co stated.
It stressed that going forward, as the economy opens up, it sees opportunities for capital raising, mergers & acquisitions and corporate financing which merchant banks can leverage to grow market share and render good returns to shareholders.