Nigerian: FSDH receives an ‘A’ rating with a stable outlook from DataPro

Credit Rating Agency (CRA), DataPro, FSDH Merchant Bank Limited has been awarded a stable outlook for the year 2023/2024, accompanied by a long-term issuer rating of ‘A’. This positive assessment reflects the bank’s strong standing and outlook according to DataPro’s analysis.

The agency’s statement highlighted that the bank’s assigned rating took into account various factors such as its financial performance, capital adequacy, asset quality, liquidity, profitability, corporate governance, and risk management. These comprehensive considerations contribute to the overall evaluation of FSDH Merchant Bank Limited’s standing in the assessment conducted by the agency.

It stated that FSDH MB leveraged funding obtained from commercial institutions, debt issuances and depositors during the year 2022, with the commercial paper issued during the year amounting to a face value of N20.47 billion.

This, it said, was complemented by borrowings from various financial institutions to the tune of N50.8 billion.

The rating agency said the lender was also able to grow customer deposit liabilities by 37 per cent in 2022.

As per the report, the bank strategically utilized the funds by directing them into its operations, resulting in a notable increase of 53% in net loans and advances. This successful deployment significantly contributed to a remarkable growth of 77% in gross earnings and an impressive surge of 302% in pre-tax profit. The bank’s strategic allocation of funds evidently played a pivotal role in driving substantial growth across key financial indicators.

It stated that in the year 2023, the bank earned N24.4 billion from its operations, which was significantly above the previous year’s earnings of N13.7 billion.

It added that the rating assigned indicated low risk and showed very good financial strength, operating performance and business profile when compared to the standard established by DataPro.

“This bank, in our opinion, has a strong ability to meet its ongoing obligations. Its short-term rating of ‘A2’ indicates fair credit quality and adequate capacity for timely payment of financial commitments,” it said.