…trading gains lift profit
NOVA Bank a small Nigerian lender reported higher profit for the Full Year 2024 period even as deposits and loans outstanding fell compared to a year ago, a sign of the challenges inherent in transforming into a full-fledged commercial bank.
NOVA Bank reported profit of N8.23 billion for the Full Year 2024 period, however that was largely boosted by N6.16 billion in net foreign exchange (FX) gain up 32% compared to 2023 levels, and trading gains on financial instruments (Nigerian Treasury Bills and bonds) of N2.427 billion compared to a small trading loss in 2023.
Meanwhile NOVA Bank loans and advances to customers as at Full Year (FY) 2024 fell -6.8% to N96.42 billion compared to 2023 FY. Loans to the Heath, Manufacturing and General Commerce sectors led the slide.
Deposits from customers also fell -2.5% in the period. NOVA Bank might be struggling to mobilize deposits due to having just two physical branches (VI and Ikeja) in Nigeria as at the First Quarter (Q1) of 2025, a bank analyst told MoneyCentral.
The lender officially commenced operations as a National Commercial Bank in July 2024 when it opened its first commercial banking branch at 18, Kofo Abayomi Street, Victoria Island, Lagos.
“Ikeja branch has also opened its doors to customers in Q1 of 2025. Apapa, Owerri, Port Harcourt and Abuja branches will be opened to customers before the end of Q3 2025,” the Chairman of the Bank, Phillips Oduoza said.
NOVA shareholders’ equity strengthened to N40.83 billion in Full Year 2024, however it’s still way off the new Central Bank regulatory capital requirements.
NOVAÂ plans to raise additional equity capital of over N160 billion through a combination of rights issue, private placement, and an initial public offer (IPO) within the two-year timeframe (2024-2026) to meet the new capital requirements for the commercial banking license.
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