Nine Moody’s rated banks grow assets to N43.814trn

THERE are indications that a total of nine Deposit Money Banks (DMBs) in Nigeria recently rated by Moody’s Investors Service (Moody’s) grew their total assets to N43.814 trillion despite the prevailing harsh economic climate in 2021. 

The global rating agency recently affirmed the B2 long-term local and foreign currency deposit ratings as well as senior unsecured ratings, where applicable, of nine Nigerian banks. 

They are Access Bank Plc, Zenith Bank Plc, First Bank of Nigeria Limited, United Bank for Africa Plc, Guaranty Trust Bank Limited, Union Bank of Nigeria Plc, Fidelity Bank Plc, First City Monument Bank Limited and Sterling Bank Plc. 

At the same time, the rating agency changed the outlook on all the banks’ long-term deposit ratings to stable from negative. 

In rating the lenders, Moody’s said that the banks’ financial profile is still good and that it believes that the Nigerian government, through the Central Bank of Nigeria (CBN), has taken measures that have stabilised the banking system. “The rating action reflects Moody’s expectation that higher oil prices and some measures taken by the government will help stabilise the sovereign’s credit metrics, thus stabilising the sovereign credit profile and, in turn, those of the banks. 

Moody’s affirmed Nigeria government’s long-term issuer ratings of B2 and changed its outlook to stable from negative on 29 November 2021,” the rating agency stated. 

Explaining the rationale for the ratings, Moody’s said: “The rating action reflects the banks’ financial profiles which have been generally resilient to the difficult operating environment in Nigeria.” 

Nigerian Tribune analysis of the lenders’ September 2021 unaudited financial statements show that Access Bank maintains its position as the largest bank in the country in terms of assets, as its unaudited results for the period ended September 30, 2021, put its total assets at N10.37 trillion, compared with assets of N8.68 trillion that the Tier 1 bank reported in its 2020 financial statements. 

Analysts at Cordros Capital Group, an investment banking group, said the performance of Access Bank showed “strong earnings growth”, noting that “top-line performance trickled down to the bottom-line, allowing the bank to record a second consecutive quarter of double-digit earnings growth”. 

It was followed by Zenith Bank with total assets of N8.75trillion as of the end of September 2021 as against the N8.48 trillion the lender posted for FY’ 2020. 

Also, the total assets of FBN Holdings increased by 10.62 per cent year to date to N8.51 trillion while UBA’s unaudited results for Q3 2021 show that the lender’s total assets increased by 8.70 per cent to N8.35 trillion from N7.69 trillion at the end of last year. 

Similarly, another Tier 1 lender, GTCO, reports in its September 2021 unaudited financial statements that total assets increased by 4.03 per cent to N5.14 trillion from N4.94 trillion at the end of 2020. 

It was followed by Union Bank with total assets of N2.56 trillion as at the end of September 2021 compared with N2.19 trillion that the lender posted for FY’ 2020, while FCMB’s net assets grew by 3.2 per cent from N227 billion to N234 billion. 

Personal statements made by members of the CBN’s Monetary Policy Committee (MPC) at their September meeting, which were released by the apex bank recently, show that they expressed satisfaction regarding the health of the country’s banking industry. 

For instance, in his personal statement, Deputy Governor in charge of economic policy at the CBN, Dr Kingsley Obiora, said: 

“The financial soundness indicators showed that the banking system remains sound, stable and resilient. The total assets of the industry increased by 15.38 per cent from N47.58 trillion in July 2020 to N54.90 trillion in July 2021. Consequently, the gross banking sector credit increased by N6.63 trillion from N15.57 trillion at the end of December 2020 to N22.20 trillion at the end of July 2021.”

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