Agusto upgrades FCMB’s Credit Direct rating to BBB+

Agusto & Co. upgraded the rating of FCMB Group Plc’s consumer finance arm, Credit Direct, to BBB+.

This is as the company also completed the payout of its Series I and II Commercial Paper.

In its upgrade review, Agusto & Co. said, “The upgrade reflects Credit Direct’s dominant position in the industry and its good and consistent profitability, which compares better than most peers in the consumer lending segment.”

Commenting on the upgrade in a statement made available to The PUNCH on Tuesday, the Managing Director/CEO of Credit Direct, Chukwuma Nwanze, said, “We are honoured and proud to announce that Agusto & Co. has upgraded Credit Direct’s rating to BBB+, a remarkable achievement considering the high inflationary and turbulent macroeconomic environment we are navigating.

“This upgrade, which puts us among the highest rated fintech lenders in the country, is not only a testament to our robust financial health and strategic agility but also reflects our resilient business model focused on expanding financial inclusion for Nigerians, our sound risk management practices, and the trust we have built with our customers and stakeholders.”

Having successfully completed the repayment of its N6.9bn Series I and II commercial paper issued in November 2023 on the FMDQ Securities Exchange, Nwanze noted that investors showed strong confidence through their participation in the CPs.

“Their support underscores our position as one of Nigeria’s leading digital-first non-bank financial services providers. We extend our deepest gratitude to our investors for their trust, and we remain dedicated to delivering exceptional value and fostering long-term partnerships that are critical to achieving our ambition to expand financial inclusion for all Nigerians,” he stated.

Meanwhile, in the first half of 2024, the firm delivered a 105 per cent year-on-year growth in interest income to raise its profitability by 154 per cent compared with the corresponding period last year.

The Chief Financial Officer at Credit Direct, Kolawole Omoniyi, explained that the company is continuing its growth trajectory despite a tough business clime.

“We also continued to see significant improvements in our cost efficiency and asset quality ratios, as our cost-to-income ratio declined by 370 basis points while our NPL ratio also declined by 221 basis points as of the end of H1 2024. Our return on average equity improved to 65.6 per cent while our return on average assets also improved to 10.5 per cent, wrapping up a strong H1 2024 financial period,” he asserted.

Beyond the strong financial performance, the company reported that it had also made significant progress in its digital transformation implementation to ensure that the company is ready for the future.

Nwanze explained, “Our strong performance in the first half of 2024 is a clear indication of the transformative power of our digital initiatives. Our commitment to digital transformation has significantly enhanced our operational efficiency, improved the customer experience, and boosted employee productivity.

“About 95 per cent of our loan book at the end of June 2024 originated through our digital channels, a significant improvement from the 62 per cent reported as of June 2023. We introduced four new digital channels and upgraded our existing digital channels, enabling our customers to have 24/7 access to our services.”

Credit Direct is a wholly owned subsidiary and consumer finance arm of the FCMB Group, offering lending and retail investment products to individuals and businesses.