Seven Nigerian banks and two bank holding company Long-Term Issuer Default Ratings (LT IDRs) would likely be upgraded if Nigeria’s sovereign LT IDRs (B-/Positive) were upgraded and the entities maintained stable financial profiles.
According to Fitch Ratings, the Positive Outlooks on the entities’ ‘B-’ LT IDRs mirror that on the sovereign.
The entities are Access Bank, Zenith Bank, First HoldCo, First Bank of Nigeria, United Bank for Africa (UBA), Guaranty Trust Holding Company (GTCO), Guaranty Trust Bank (GTB), Fidelity Bank and Bank of Industry (BOI).
The IDRs, except for BOI’s, are driven by standalone creditworthiness, expressed by Viability Ratings (VRs). The VRs are primarily constrained by high exposure to the sovereign through holdings of sovereign debt securities and large cash reserves at the Central Bank of Nigeria.
The UK-based firm said Zenith, UBA and GTCO/GTB’s VRs are one notch below the ‘b’ implied VRs due to operating environment and sovereign rating constraints, which could ease if Nigeria’s LT IDRs were upgraded. The other banks’ VRs are in line with their implied VRs.
Fidelity has a smaller franchise than the other domestic systemically important banks but has more than doubled its paid-in capital since end-3Q24 through capital raising.
It is now raising more capital to meet the increased minimum paid-in capital requirement that takes effect at end-1Q26. The improvement in core capitalisation would support an upgrade of Fidelity’s VR and LT IDR if the sovereign were upgraded.
Latest Stories
-
Ten Years On: June 3 disaster survivors share painful memories and call for civic responsibility
2 minutes -
Ibrahim Tanko reflects on tough loss to Kotoko, eyes bounce back against Berekum Chelsea
19 minutes -
2028 Presidential Elections: The Lion and the Mosquito set for epic presidential showdown
23 minutes -
Albert Amoah eyes Golden Boot after stunning hat-trick against Medeama
27 minutes -
Two UniMAC-IFT students travel to Germany for exchange programme
29 minutes -
BoG rolls out new set of regulatory measures targeted at interest charges, pricing, and recapitalisation of banks
34 minutes -
OSP insists it has no medical report on Ken Ofori-Atta
38 minutes -
‘Machomen’ with guns and knives were bused by Holy Stars to match centre – Nations FC alleges
48 minutes -
We’ve been fair to Ken Ofori-Atta but he remains unwilling to appear – OSP
48 minutes -
Man Utd captain Bruno Fernandes rejects Al-Hilal move
1 hour -
Cedi begins week strongly; Gains nearly 50% in value to dollar, one dollar equals GH¢10.98
1 hour -
Automobile artisans urge gov’t to support establishment of workshop facilities
3 hours -
Gov’t seeking strategic partners to takeover AirtelTigo – Communications Minister
3 hours -
Mahama recounts childhood ties with Asantehene: “They used to send us for ice cream”
3 hours -
Emmanuel Adjei cycles 10,000km solo from Munich to Accra to raise €100,000 to support education in rural communities
3 hours