‘We’ve Submitted Capital Raising Plan to CBN’ –Nova Merchant Bank

As part of its transition to a national commercial banking license, Nova Merchant Bank Limited said that it has submitted its capital raising plan to the Central Bank of Nigeria (CBN).

The merchant lender had asked the apex bank earlier in the year for an upgrade so that it could become a member of the league of banks with national authorization. This request was made ahead of the CBN’s recapitalisation notice.

Deposit money banks with international authorisation capital base is expected to be pushed up to N500 billion at the end of Q1-2026. National banking license requires that a bank’s share capital and premium sum up to N200 billion. Instead of N34 billion, the merchant lender’s strategic growth plan has shifted its fund gap to N184 billion.

When asked about how Nova Merchant Bank plans to raise a shortfall of N34 billion in the next two years, management responded that capital raising plan has been submitted to the CBN.

Kelvin Anyaegbunam, Head, Brand and Communication Unit, said the merchant lender has received an Approval-in-Principle (AIP) from the CBN to transition into a National Commercial Bank.

“In line with this transition, we have submitted a comprehensive capital raising plan to the CBN to increase our share capital to a minimum of ₦200 billion within the next two years in line with our AIP.

“We are diligently following up on the plan as presented to the CBN and have already commenced initial steps to meet this target.  We have options of Rights Issue, Private Placement and an Initial Public Offering (IPO) and all of them are on the table for us”.

Management said with these efforts, they are well on track to begin commercial banking operations.  In 2022, net interest income of the bank surged significantly to N659.824 million from N189.05 million in the comparable period in 2021. Its improved service delivery lifted net fees and commission income to N1.876 billion in the same year from N827 million.

The merchant lender drove earnings performance high with significant growth in net foreign exchange gain, which printed at N3.766 billion from N2.485 billion in 2022 before naira devaluation in 2023.

As per the financial statement available on its website, Nova Merchant Bank Limited experienced an increase in profit from N1.605 billion in the corresponding year of 2021 to N3.096 billion in 2022. The merchant lender distributed a total of N1 billion in dividends to shareholders during the year.

Additional information revealed that the four largest shareholders of Nova Merchant Bank are Phillip Oduoza, the chairman, who owns 50.494% of the company. Carbon Commodity DMCC is the next largest shareholder, controlling 24.753% of the shares.

Other significant shareholders include Five Star Associate Limited (12.377%) and Afriglobal Investment Holdings (12.377%).

The total assets of Nova Merchant Bank increased from N244.217 billion during the same period in 2021 to N279.88 billion in 2022. Details from the results showed that Nova Merchant Bank Limited had N16 billion in share capital as of December, 2022.  

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