Datapro assigns FSDH ' A' rating, stable outlook

CREDIT rating agency ( CRA), Datapro, in its latest report, assigned FSDH Merchant Bank Limited a long- term issuer rating of ' A' with a stable outlook for the year 2023/ 2024.

A statement by the agency showed that considerations for the rating assigned to the bank include its financial performance, capital adequacy, asset quality, liquidity, profitability, corporate governance and risk management.

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.

According to it, the bank channelled the fund into its operation, increasing net loans and advances by 53 per cent. The achieved supported gross earnings and pretax profit growth by 77 per cent and 302 per cent respectively.

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.