Quest Merchant Bank Limited has received a fresh vote of confidence from GCR Ratings, which affirmed the bank’s national scale issuer ratings at BBB(NG) and A3(NG) while revising its outlook from rating watch negative to stable. The development reflects a notable shift in sentiment toward the institution following a period of structural and financial repositioning.
The rating affirmation is widely seen as an endorsement of the bank’s strengthened fundamentals, particularly its improved capital base, liquidity position, and evolving ownership structure.
Stronger balance sheet, clearer growth path after ownership transition
According to GCR, the improved outlook is supported by Quest Merchant Bank’s “sound risk profile, improved capitalisation and strong liquidity,” as well as the successful transition in ownership following its acquisition by EverQuest LLP after the divestment by FBN Holdings.
This ownership restructuring is viewed as a stabilising factor that has helped reposition the bank for its next phase of growth, while reinforcing governance and strategic direction.
The agency also highlighted the bank’s competitive standing in Nigeria’s merchant banking space, noting that Quest Merchant Bank accounted for about 30 per cent of total sub-sector assets as of 31 December 2025—an indication of its scale and influence within the niche market.
Capital raise strengthens regulatory compliance and expansion capacity
A key factor behind the revised outlook was the completion of the bank’s ₦42.9 billion capital raise in March 2026, undertaken to meet the Central Bank of Nigeria’s updated minimum capital requirements.
GCR noted that the injection is expected to “further enhance the bank’s capital adequacy position and support the next phase of business growth,” positioning the institution for stronger balance sheet resilience and expanded lending capacity.
Asset quality and liquidity remain key strengths
Quest Merchant Bank’s risk indicators continue to compare favourably within the industry. The bank reported a Non-Performing Loan (NPL) ratio of 3.2%, significantly lower than the broader banking sector average, underscoring disciplined credit underwriting and portfolio management.
Alongside this, strong liquidity buffers and consistent earnings performance were identified as additional pillars supporting the rating affirmation.
GCR also pointed to the strategic importance of the bank’s relationship with Custodian Investment Plc, describing it as a potential driver of “expanded business opportunities, operational synergies and stronger profitability over time.”
Management highlights resilience and renewed confidence
Reacting to the development, the Acting Managing Director/CEO of Quest Merchant Bank Limited, Afolabi Olorode, described the outlook revision as a validation of the institution’s recent transformation.
“This outlook revision is a strong signal of confidence in the future of Quest Merchant Bank and the progress we have made in strengthening our organisation over the last year,” he said.
He further added: “Beyond the ratings action itself, this recognition reflects the resilience of our business, the quality of our balance sheet, and the confidence our clients, partners and stakeholders continue to place in the bank.”
Olorode emphasised the bank’s improved positioning following its transition phase, stating: “We have emerged from a defining transition period stronger, well-capitalised and better positioned to capture the opportunities ahead. We remain committed to delivering innovative solutions, creating long-term value and supporting economic growth across the sectors we serve.”
Outlook: stability expected over the medium term
Looking ahead, GCR’s stable outlook reflects expectations that the bank will maintain its current trajectory over the next 12 to 18 months, supported by solid asset quality, stable funding structures, and sustained liquidity strength.