Global Credit Ratings (GCR) has reaffirmed the creditworthiness of SFS Capital Nigeria Limited, a prominent player in Nigeria’s capital market, particularly in the Real Estate Investment Trust (REIT) sector. The agency maintained the company’s long-term issuer rating at A-(NG) and its short-term rating at A2(NG), both with a stable outlook. This positive assessment underscores GCR’s confidence in SFS Capital’s robust financial health, effective risk management practices, and promising growth trajectory. The reaffirmation serves as a testament to the company’s consistent performance, strategic initiatives, and its contribution to the development of Nigeria’s financial landscape.
The ratings affirmation is anchored on several key factors that highlight SFS Capital’s financial strength and stability. Firstly, the company boasts a strong liquidity position, with a liquidity coverage ratio of 3.2x in 2024. This robust liquidity coverage provides a significant buffer against potential economic volatilities and ensures SFS Capital can comfortably meet its short-term obligations, even in challenging market conditions. Secondly, GCR acknowledges the company’s consistent focus on leveraged operations, a strategy that has enabled it to amplify returns and efficiently manage its capital resources. This disciplined financial approach reinforces SFS Capital’s ability to navigate economic uncertainties and maintain a healthy financial profile.
Since its inception in 2007, SFS Capital has played a crucial role in the growth of Nigeria’s REIT market, currently managing two out of the three listed REITs in the country. This prominent position underscores the company’s deep expertise in REIT management and its significant contribution to the development of this asset class in Nigeria. SFS Capital’s unaudited financials for 2024 reveal impressive performance, with gross revenue reaching N635.5 million, a 19% increase from the previous year. This growth, achieved despite rising inflation and market uncertainties, testifies to the company’s resilience and effective management strategies. With total assets under management (AUM) standing at N113.4 billion, SFS Capital continues to expand its reach and impact within the Nigerian capital market.
Demonstrating its commitment to broader financial inclusion and accessibility, SFS Capital has recently expanded its operations to Abuja and Port Harcourt. This strategic move aims to bring investment opportunities closer to a wider range of investors and contribute to the economic development of these regions. By extending its services beyond its traditional base, SFS Capital is working to bridge the investment gap and empower individuals and businesses across Nigeria to participate in the capital market. This expansion aligns with the company’s vision of democratizing investment access and fostering economic growth across different parts of the country.
Furthering its commitment to innovation and market development, SFS Capital is poised to launch a new REIT, a move that analysts believe holds significant potential for Nigeria’s economic diversification efforts. This new REIT is expected to contribute to the deepening of the nation’s capital markets by introducing a new investment avenue and attracting further capital inflows. By diversifying investment options and broadening market participation, this initiative aligns with the broader national goals of economic growth and stability. The forthcoming REIT launch underscores SFS Capital’s proactive role in shaping the future of Nigeria’s financial landscape.
In conclusion, the reaffirmation of SFS Capital’s credit rating by GCR provides a strong endorsement of the company’s financial strength, strategic direction, and positive impact on Nigeria’s capital market. The A-(NG) long-term and A2(NG) short-term ratings, coupled with a stable outlook, reflect GCR’s confidence in SFS Capital’s ability to maintain its robust performance and navigate future market challenges effectively. The company’s strong liquidity, disciplined financial approach, leadership in the REIT sector, continued expansion, and commitment to innovation position it as a key driver of growth and development within Nigeria’s evolving financial ecosystem. The forthcoming REIT launch is anticipated to further solidify SFS Capital’s position as a forward-thinking and influential player in the Nigerian capital market, contributing to both economic diversification and enhanced market depth.
