NOVA Bank has scaled back expansion plans and sought for Regional License amid regulatory pressure.
In a strategic shift that reflects a recalibration of its growth ambitions, NOVA Bank has announced plans to convert its operating license from a National Commercial Bank to a Regional Commercial Bank, citing a desire to optimise operations and focus on key markets.
The bank’s management disclosed in a recent statement that the application for reclassification has been submitted to the Central Bank of Nigeria (CBN) as part of efforts to enhance capital efficiency and streamline service delivery within priority regions.
Aligning With Regulatory Realities
This move comes on the heels of the CBN’s revised recapitalisation directive, issued in March 2024, which raised the minimum capital base for national commercial banks to ₦200 billion, and ₦500 billion for banks with international licenses, effective by Q1 2026.
NOVA Bank, which previously upgraded from merchant banking status, had in 2024 expressed ambitions to scale nationally. However, with increasing regulatory demands, the bank says it is reassessing its strategy for more sustainable growth.
According to Acting Managing Director/CEO, Mrs. Chinwe Iloghalu, the decision reflects a prudent approach to growth.
“Given the bank’s current stage of growth, we have chosen the prudent route to optimise what we need, grow efficiently, and scale sustainably. This is a major strategic positioning that will ensure continued efficiency in the deployment of assets and resources,” she said.
Shareholders Pledge Capital Support
The bank confirmed that its shareholders have committed to injecting an additional ₦24 billion before the end of 2025 via a rights issue; an effort to ensure the bank exceeds the required capital threshold for regional banks well before the 2026 deadline.
While the capital commitment is a positive signal, financial analysts note that the evolving regulatory landscape is placing pressure on mid-sized banks to rethink their expansion models.
“NOVA’s decision is not unusual in the current climate. Several institutions are evaluating their positions and choosing license categories that align with their capital strength and operational priorities,” said one industry analyst who requested anonymity.
Stable Outlook, Continued Growth
Despite the license review, NOVA maintains a solid financial profile. Global Credit Rating (GCR) recently reaffirmed the bank’s BBB rating with a Stable Outlook, citing strong liquidity, improved earnings, and sound asset quality.
According to its 2024 audited financials, NOVA recorded a 200% year-on-year increase in profit before tax (PBT), alongside improvements in key performance indicators. The bank has also outlined plans to open three new branches in Owerri, Port Harcourt, and Abuja in the coming weeks.
Chairman of the Board, Mr. Phillips Oduoza, emphasized that the license shift does not signal a step back, but rather a realignment of focus.
“Every decision we make is deliberate and strategic, guided by sound governance and market insight. Transitioning to a regional license is a recalibration, giving us room to grow optimally, build capacity, and position ourselves for a full national rollout in the next 36 months,” he stated.
Looking Ahead
While some stakeholders may see the move as a conservative shift, others interpret it as a realistic strategy in a capital-intensive environment. Analysts suggest the bank’s ability to meet its capital commitments, execute expansion plans, and maintain profitability will determine how successfully it navigates this transition.
NOVA Bank has reiterated its commitment to customer satisfaction, technological innovation, and financial stability as it pursues this next phase of its operational journey.