Agusto upgrades Nigerian banks to ‘BBB’ status

Channels Television  
Updated August 9, 2012

Nigeria’s main ratings Agency Agusto & co. has upgraded the country’s banking sector ratings by one notch to “BBB” from “BB” citing a stable outlook, improved earnings and capital ratios.

The agency in a report released on Thursday, disclosed that credit growth was gradually returning and risk aversion waning as banks recovered from the shock of a $4billion bailout in 2009.

Nigerian lenders staged a sharp recovery during the first half of the year, after some banks sold bad loans worth over N1.5 trillion to AMCON, freeing up their balance sheets and focusing more on creating risk assets.

The agency said non-performing loans declined to N328 billion representing 4.8 per cent of loans in 2011, compared with an impaired loan ratio of 16 per cent in 2010.

Two weeks ago, global ratings agency Fitch said Nigerian banks continued to face challenges despite AMCON’s support and that credit had grown rapidly by 30-66 per cent in 2011.

It said lenders had thin levels of “core capital”.