Nova Merchant Bank’s N10bn bond oversubscribed by 300%

The maiden N10bn bond issue by Nova Merchant Bank has been oversubscribed by over 300 per cent, its Chief Financial Officer, Mr. Ifeanyi Chukwuonye, has said.

According to Chukwuonye, despite the negative impact of the Coronavirus Disease on the global economy, investors still swooped on the seven-year subordinated unsecured bond issuance.

He said the decision by the management of the bank to invest in the bond issue was part of its N50bn debt issuance programme.

“The N10bn bond issue was in line with the corporate strategy of the bank to raise long-term funding to create long-term corporate loans,” he said.

The bond issue, which was restricted to qualified financial institutions and high net worth individuals, was the first in the series conceived as part of the bank’s strategy to grow its balance sheet amid the ravaging impact of COVID-19.

The CFO, who said the bank was not deterred by the pandemic, said in the midst of the prevailing turbulent situation in the global economy, it identified opportunities it decided to exploit.

He said the response of the market to the opportunities was not only receptive, but also impressive.

With the performance of the bank in the latest issue, Chukwuonye said the bank, which is barely three years old, was already contemplating going back to the market any time soon for more funding.

“The issuance is the first in the series as part of the bank’s strategy to grow its balance sheet. It is another addition to the catalogue of successes as a bank,” he said.

He added that the proceeds of the bond issuance would be used to create long-term corporate loans to build a more efficient balance sheet and increase the earning capacity of the bank’s assets.

Highlighting the bank’s performance within the short period it has been in existence, Chukwuonye said its impressive performance numbers were some of the factors that convinced investors to take their investment decisions.

Since becoming operational, he said, the bank has remained “very profitable” with its gross earnings growing by 121 per cent in 2017 and 2018, and about 111 per cent in 2018 and 2019.

Profit After Tax grew by 43 per cent between 2018 and 2019, while total assets grew by 156 per cent in the corresponding period, the CFO said, adding that the debt-income ratio of the bank considerably dipped consistently for the last three years as a demonstration of the bank’s operating efficiency.

He expressed confidence in the bank’s future, saying it had high prospects of better performance.

The bank, he noted, has already taken steps to take its place in Nigeria’s merchant banking space, adding that its long term goal was to build a viable and sustainable merchant banking institution that would be a pride of its investors.

Nova Merchant Bank, which focuses on wholesale and investment banking, is owned by Nigerian and foreign institutional investors interested in financial services and the real sector.

Its services include Corporate Banking, Investment Banking, Advisory Services, Securities, Wealth and Asset Management targeted at private and public sector clients in addition to private individuals in the oil and gas sector, among others.

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