Naija Blog reports that NOVA Bank has announced plans to convert its operating license from a National Commercial Bank to a Regional Commercial Bank.The decision, revealed in a statement from the bank’s management, reflects a recalibration of its business focus to deepen market penetration and streamline operations within targeted regions.

Strategic Realignment

According to the bank, the shift aligns with its long-term vision to consolidate strengths, deploy capital more efficiently, and drive sustainable growth — all while maintaining innovation and customer satisfaction.

“In line with our revised growth trajectory and capital strategy, we have applied to the Central Bank of Nigeria (CBN) to recategorize our license,” said Mrs. Chinwe Iloghalu, Acting Managing Director/CEO. “Given the Bank’s current stage of growth, we’ve chosen the prudent route to optimise what we need, grow efficiently, and scale sustainably.”

She added that shareholders have shown strong support for the move, noting a planned ₦24 billion capital injection through a rights issue, well ahead of the 2026 CBN recapitalisation deadline for regional banks.

Recapitalisation and Market Confidence

The shift follows the CBN’s revised recapitalisation directive issued in March 2024. Under the directive, banks with:

  • International licenses must have a minimum capital base of ₦500 billion

  • National licenses must meet ₦200 billion

  • Regional banks are required to hold ₦50 billion

NOVA Bank, previously a merchant bank, had earlier secured approval to operate as a national bank but is now opting for a regional focus to optimise resource deployment.

Despite the license downgrade, the bank continues to maintain a robust financial position. Its 2024 audited results showed a 200% year-on-year increase in profit before tax, with strong performance across key indicators.

Global Credit Rating (GCR) also reaffirmed NOVA’s BBB rating with a Stable Outlook, citing its healthy liquidity, improving earnings, and sound asset quality.

Expansion and Outlook

While transitioning to a regional model, NOVA Bank confirmed plans to open three new branches in Owerri, Port Harcourt, and Abuja, enhancing its physical footprint in key markets.

It also reiterated its commitment to digital transformation, investing in infrastructure to ensure secure and seamless banking across platforms.

Board Chairman Mr. Phillips Oduoza emphasized that the move was a strategic recalibration, not a retreat.

“Every decision we make is deliberate and strategic. Transitioning to a regional license gives us room to grow optimally, build capacity, and position ourselves for a national rollout in the next 36 months,” Oduoza said.

Background

NOVA Bank, originally a merchant bank, applied for a national license in 2024 ahead of the CBN’s recapitalisation framework. This latest move signals a strategic pivot, prioritising regional dominance and capital efficiency over wider but costlier national operations.

Key Takeaways:

  • NOVA is applying to the CBN to switch from a national to a regional commercial banking license.

  • The move is aimed at enhancing efficiency, scaling sustainably, and maximising capital use.

  • A ₦24 billion capital raise is underway, with plans for future national expansion within three years.

  • The bank remains financially strong, with a GCR BBB rating and rapid profit growth.