Global Credit Rating has affirmed NOVA Merchant Bank Limited’s national scale long and short-term ratings of BBB(NG) and A3(NG) respectively, with a stable outlook.
The ratings agency explained that NOVA was rated on the basis of its strong capital base as well as its financial position, adding, “The ratings of NOVA Merchant Bank Limited reflect its sound capitalisation and good risk position, as characterised by minimal non-performing loans (“NPL”) and credit losses.
Citing the rationale for the ratings, GCR said; “NOVA Merchant Bank operates within the Nigerian merchant banking subsector and continues to drive the evolution of its market position through the launch of bespoke customer-centric products/solutions and innovations to improve value propositions and meet the specific needs of its clients.”
“The bank’s capitalisation is considered sound, with capital adequacy ratio maintained above regulatory threshold of 10 percent” as at December 2021, reinforcing the headroom for risk asset growth and overall balance sheet capacity,” the report noted.
NOVA Merchant Bank maintains stable funding and adequate liquidity. According to GCR, NOVA MB’s funding structure is predominantly made up of deposits. At FY21, total deposits accounted for 95 percent of the funding base (FY20: 93.1 percent), with customer deposits increasing by 30.4 percent during the year, on the back of improved deposits mobilisation capacity.