Agusto & Co. Limited has appointed an “A” rank to FSDH Merchant Bank Limited. According to a report prepared, the rating allocated to the bank was as a result of its great capitalisation, good liquidity, good profitability and an expert management team.
“The rating is however constrained by a concentration in the loan book, inflexible funding and the fragile state of the Nigerian economy.
“During the 2018 financial year, FSDH’s profitability strengthened considerably on account of lower funding costs, improvements in asset quality which led to writebacks of loan provisions and moderated operating expenses despite inflationary pressures.
“Profit before taxation increased by 34.4 per cent to N5.2 billion, the highest in the bank’s history. Pre-tax return on average assets (ROA) and pre-tax return on average equity (ROE) also strengthened to 3.5 per cent (2.7%) and 17.8 per cent (FY2017:14.9%) respectively.
“These profitability ratios are also the best the Bank has recorded since its transition to a merchant bank and were at the upper end of its peer group,” the statement noted.
The statement further revealed that: “On account of improvement in asset quality and profitability, while maintaining sufficient levels of capitalisation, we hereby upgrade the rating assigned to FSDH Merchant Bank Limited to ‘A.’
