Fitch Ratings Reviews Nigerian Banks’ Support Rating

Fitch Ratings, First Bank, seven energyFitch Ratings has revised down the Support Rating Floors (SRF) of 10 Nigerian banks to ‘no floor’ and downgraded nine banks’ Support Ratings (SR) to ‘5’ following a reassessment of potential sovereign support for the banking sector.

As a consequence, the long-term issuer default ratings of First Bank of Nigeria Limited, FBN Holdings PLC, Diamond Bank PLC, Fidelity Bank PLC, First City Monument Bank Limited and Union Bank of Nigeria PLC are downgraded to ‘B-‘ from ‘B’, in line with their stand-alone creditworthiness as defined by their viability ratings.

The agency has affirmed the long-term IDRS of Zenith Bank PLC, Guaranty Trust Bank PLC, Access Bank PLC, United Bank for Africa PLC, Wema Bank PLC and Bank of Industry (BOI).

The downgrade of the nine banks’ SRS and the revision of 10 banks’  SRFs to ‘no floor’ reflects Fitch’s view that senior creditors can no longer rely on receiving full and timely extraordinary support from the Nigerian sovereign if any of the banks become non-viable.

Wema bank to re-apply for national banking licence

Wema Bank PLC has announced plans to re-apply for a national banking license in view of its proposed Tier 1 capital injection of around N35 billion by the end of this year.

According to a statement released by the bank, it stated that its gains in earnings and various cost-containment strategies were largely wiped off by one-off impairment charges on assets culminating in an after-tax loss of N7.6 billion in December last year.

The bank however recorded a 29 per cent rise in gross earnings and 56 per cent increase in operating income for the period ended December 2011.