DataPro affirms Nova Merchant Bank’s ‘A+’ rating over stable outlook

DataPro, a leading technology-driven credit rating agency (CRA), has affirmed NOVA Merchant Bank Limited’s long-term rating of A+ and short-term ratings of A1 with stable outlook for the 2021/2022 financial period. The ratings are consistent with similar ratings received by the bank recently from one of the leading rating agencies, Global Credit Rating (GCR).

The Nigeria-based rating agency explained in a recent statement that the financial services institution was rated highly as a result of its good financial strength, operating performance and business profile when compared to the standard established by the agency.

The statement noted that the rating was approved after an assessment of the bank’s financial performance, credit quality, governance risk and regulatory compliance, as well as risk factors of its current robust profile in the medium to long-term period.

According to the CRA, NOVA Merchant Bank recorded a liquidity ratio of 33.7 percent as at December 2021. The bank also maintained the steady growth of its deposit liabilities as its deposit liabilities rose from N89.6 billion in 2020 to N116.8 billion in 2021, reflecting a 30 percent growth.

It further said that the bank’s equity grew marginally in 2021 by 3 percent from N22.7bn in 2020 to N23.5bn in 2021. Overall, the bank’s assets rose 34 percent from N182bn in 2020 to N242bn in 2021. This, it explained, was largely driven by the increased loans and advances, pledged assets and balance with banks.

“The bank maintains a sound capital base, with capital adequacy ratio of 29 percent as at December 31, 2021, which is well above the regulatory benchmark of 10 percent for the industry, indicating the bank’s capacity for risk asset growth and overall balance sheet

expansion,” DataPro stated.

The credit rating agency opined that the bank has a very strong ability to meet its ongoing obligations, noting that the rating of the bank is supported by its strong capitalisation, good liquidity, stable funding capacity and very good asset quality.

Reacting to the ratings, Nath Ude, managing director/CEO, Nova Merchant Bank Limited, remarked that DataPro’s affirmations of NOVA’s long-term and short-term ratings and

stable outlook are a confirmation of the bank’s sound governance, strong risk management

and good asset quality. He added that the ratings highlight the strong productive capacity of the

bank driven by sustainable growth.

“With continuous investment in human capital and technology, and more importantly

innovative partnerships with credible clients, NOVA is poised to positively influence the

banking industry, with the vision to unlock opportunities for our clients across the key growth

sectors of the Nigerian economy,” Ude said.

Phillips Oduoza, chairman of the bank, expressed  excitement over the consistency of the rating on the bank, noting that the ratings demonstrate sound and good governance structures put in place to ensure long-term sustainability of the bank.