Categories: Business

S&P affirms global scale ratings on 10 Nigerian banks

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STANDARD and Poor’s (S&P) Global rating agency has affirmed its issuer and issued credit ratings on 10 Nigerian banks and for some of them their non-operating holding companies.

The banks are; Access Bank, Ecobank Nigeria Ltd, Fidelity Bank PLC, First City Monument Bank, Guaranty Trust Bank Ltd, Stanbic IBTC Bank Plc and Standard Chartered Bank Nigeria Ltd.

Others are; United Bank for Africa Plc, Zenith Bank Plc and First Bank of Nigeria Ltd.

The agency said the affirmations follow a revision to its criteria for rating banks and nonbank financial institutions and for determining a Banking Industry Country Risk Assessment (BICRA).

According to S&P, Access Bank’s ‘B-/B’ long- and short-term ratings was affirmed and  its national scale rating raised to ‘ngBBB+/ngA-2’ from ‘ngBBB/ngA-2’.

On Ecobank Nigeria Ltd, it affirmed its ‘B-/B’ long- and short-term ratings and Ecobank Transnational Inc. ‘B-/B’ long- and short-term ratings affirmed.

On First Bank of Nigeria Ltd, S&P affirmed its ‘B-/B’ long- and short-term ratings and raised national scale rating to ‘ngBBB/ngA-2’ from ‘ngBBB-/ngA-3’.

According to S&P, FBN Holdings PLC was affirmed ‘B-/B’ long- and short-term ratings and ‘ngBBB-/ngA-3’ national scale ratings while it affirmed its ‘B-/B’ long- and short-term ratings of Fidelity Bank Plc, and raised its national scale rating to ‘ngBBB/ngA-2’ from ‘ngBBB-/ngA-3’.

“First City Monument Bank; we affirmed our ‘B-/B’ long- and short-term ratings and our ‘ngBBB-/ngA-3’ national scale ratings; Guaranty Trust Bank Ltd.: we affirmed our ‘B-/B’ long- and short-term ratings and raised our national scale rating to ‘ngBBB+/ngA-2’ from ‘ngBBB/ngA-2’.

“Guaranty Trust Holding Co. PLC; we affirmed our ‘B-/B’ long- and short-term ratings and raised our national scale ratings to ‘ngBBB/ngA-2’ from ‘ngBBB-/ngA-3’; Stanbic IBTC Bank PLC: we affirmed our ‘B-/B’ long- and short-term ratings and our ‘ngBBB/ngA-2’ national scale ratings.

“Standard Chartered Bank Nigeria Ltd; we affirmed our ‘B-/B’ long- and short-term ratings.

“United Bank for Africa PLC; we affirmed our ‘B-/B’ long- and short-term ratings and raised our national scale rating to ‘ngBBB+/ngA-2’ from ‘ngBBB/ngA-2’; Zenith Bank PLC; we affirmed our ‘B-/B’ long- and short-term ratings and raised our national scale rating to ‘ngBBB+/ngA-2’ from ‘ngBBB/ngA-2’.

“Our outlooks on these financial institutions remain stable,” S&P stated in its latest report.

It raised its national scale rating on GTBank to better reflect its leading market position in Nigeria, strong profitability, and earnings stability through the cycle.

According to S&P, revision of the national scale ratings of the top-tier Nigerian banks as well as two mid-tier banks is underpinned by their resilience to various shocks over the past few years, which it expects will continue.

The banking sector in Nigeria (B-/Stable/B) is exposed to short credit cycles because of the volatility of oil prices, but the performance of top-tier and some mid-tier banks continued to improve.

Nevertheless, “we cap the ratings on Nigerian banks at the level of the sovereign ratings because of the likely direct and indirect influence of sovereign distress on their operations, including their ability to service foreign currency obligations. Therefore, we have affirmed all our global scale ratings on these banks, including our ratings on their parent companies,” it stated.

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