In a strategic move aimed at aligning its operations with its long-term growth strategy, NOVA Bank has announced that it is in the process of transitioning its operating license from a National Commercial Bank to a Regional Commercial Bank. This decision, according to the bank’s management, is part of a broader effort to streamline services, enhance operational efficiency, and concentrate resources within high-impact markets.

The bank formally submitted its application to the Central Bank of Nigeria (CBN) for license re-categorization, reaffirming its commitment to prudent financial management and sustainable expansion within clearly defined regions.

Strategic Rationale Behind the Shift

In an official statement, NOVA Bank’s leadership clarified that the move is not a retreat but a deliberate repositioning that reflects the bank’s current operational priorities and market strengths. By focusing its efforts regionally, NOVA intends to deepen its impact, strengthen customer engagement, and allocate capital more effectively.

“This strategic decision aligns perfectly with our long-term vision to consolidate strengths, deploy assets more efficiently, and maintain a growth path rooted in sustainable banking practices,” the statement read.

Rather than spreading its resources thin across a national footprint, NOVA aims to concentrate on markets where it already has significant penetration or growth potential. The management emphasized that the change in licensing does not signal a reduction in ambition but rather a recalibration for optimized performance.

A Prudent, Growth-Oriented Approach

The bank’s Acting Managing Director and Chief Executive Officer, Mrs. Chinwe Iloghalu, explained the logic behind the license downgrade, citing the CBN’s revised recapitalization guidelines issued in March 2024 as a key driver.

“As part of our internal review following the CBN’s updated capital requirements, we reassessed our growth trajectory and capital deployment strategy,” Mrs. Iloghalu said. “At this stage in our growth journey, we believe that optimizing our footprint is the most prudent step. This will allow us to grow efficiently and scale sustainably.”

She further disclosed that NOVA’s shareholders have strongly backed the transition. A rights issue aimed at raising ₦24 billion in fresh capital is already underway, with expectations to surpass the CBN’s regional bank capital requirement well before the 2026 deadline.

“This proactive injection of capital underlines our commitment to a well-capitalized, future-ready institution,” Iloghalu added.

Financial Strength Supports Transition

Despite transitioning to a smaller operational license, NOVA Bank remains financially robust. The institution boasts strong capital adequacy, healthy liquidity ratios, and a consistent upward trajectory in performance metrics.

Global Credit Rating (GCR), a leading African credit rating agency, recently reaffirmed NOVA Bank’s “BBB” rating with a Stable Outlook. The agency highlighted the bank’s sound liquidity position, improving earnings, and solid asset quality as reasons for maintaining the rating.

The bank’s audited 2024 financial results revealed a remarkable 200% year-on-year growth in profit before tax (PBT), along with improvements across all key performance indicators. These results underscore the institution’s resilience and operational efficiency, even amid an evolving regulatory and economic landscape.

Continued Expansion and Innovation

Although NOVA is scaling back its national ambitions in the short term, the bank remains focused on geographic and digital expansion within its chosen regional markets. As part of its commitment to accessibility and service excellence, the bank is set to open three new branches in Owerri, Port Harcourt, and Abuja in the coming weeks.

In parallel, the bank is heavily investing in digital transformation to strengthen its online platforms and mobile banking capabilities. This approach ensures customers receive seamless, secure, and user-friendly services—regardless of their physical location.

“Our focus on digital innovation remains unwavering,” Iloghalu noted. “We understand that today’s customers demand convenience, speed, and security, and we are fully equipped to deliver that.”

Governance and Shareholder Support

Board Chairman Mr. Phillips Oduoza reaffirmed the institution’s long-term strategic direction, emphasizing that every decision the bank makes is grounded in solid governance and market insight.

“Transitioning to a regional banking license is not a retreat; it’s a strategic recalibration,” Oduoza said. “It gives us room to grow methodically, strengthen our foundation, and ultimately position ourselves for a full national rollout within the next 36 months.”

He expressed gratitude to the bank’s stakeholders—including customers, shareholders, and regulators—for their continued support and trust. According to Oduoza, the license reclassification represents a tactical pause to ensure that the bank’s eventual national ambitions are built on a stronger, more agile foundation.

From Merchant Bank to Commercial Bank: A Recent History

NOVA Bank’s current repositioning comes after a rapid evolution in recent years. In June 2024, the bank, then operating as a merchant bank, submitted its capital raising plan to the CBN. The proposal formed part of a bid to transition into a National Commercial Bank, placing NOVA among the country’s top-tier financial institutions with nationwide authorization.

That move was largely in anticipation of the CBN’s recapitalization directive, which set stringent capital requirements for banks operating in Nigeria. Under the new guidelines:

• International banks are required to hold a minimum capital base of ₦500 billion by the end of Q1 2026.

• National commercial banks must raise their capital to ₦200 billion.

While NOVA initially aimed to meet the ₦200 billion threshold, the bank has now decided to pursue a more focused regional strategy. This will require a significantly smaller capital base but allows the bank to maintain strong operations within a limited geographic area while building capacity for future national expansion.

Implications for Customers and the Market

For customers, the license change is unlikely to result in service disruptions. NOVA Bank has reiterated its commitment to high service standards and continued investment in infrastructure, technology, and talent.

The move also signals a growing trend among financial institutions in Nigeria to adopt more strategic footprints. As regulatory requirements tighten, banks are choosing to specialize or regionalize rather than spread thin across highly competitive national markets.

By becoming a regional player, NOVA is seeking to leverage its strengths where they matter most—within the communities and economies it understands best.

Looking Forward

As the financial sector adapts to new capital requirements and customer expectations, NOVA Bank is positioning itself for long-term relevance and sustainability. Its transition to a regional banking license is just one part of a broader vision that prioritizes efficient growth, innovation, and customer trust.

Over the next 36 months, the bank plans to build capacity, expand cautiously, and eventually re-enter the national banking landscape on stronger footing. With continued shareholder support, prudent capital management, and a clear strategic focus, NOVA Bank appears well-equipped to thrive in a more competitive, regulated, and customer-driven market environment.