…Affirmation of the long-term ratings of nine Nigerian banks reflects a combination of the difficult operating environment
…The change to positive outlook on the long-term deposit, long-term issuer and senior unsecured debt ratings of the nine Nigerian banks is driven by the implementation of new reforms in Nigeria
TUE, DEC 12 2023-theGBJournal|Ratings agency, Moody’s Investors Service on Tuesday affirmed nine rated Nigerian banks’ long-term deposit ratings, long-term issuer ratings as well as the senior unsecured debt ratings at the Caa1.
The agency at the same time has changed the outlook to positive from stable on the long-term deposit ratings, long-term issuer ratings as well as senior unsecured debt ratings of the nine rated Nigerian banks.
The nine Moody’s rated banks in Nigeria are Access Bank Plc, Zenith Bank Plc, First Bank of Nigeria Limited, United Bank for Africa Plc as well as Guaranty Trust Bank Limited, Union Bank of Nigeria plc, Fidelity Bank plc, First City Monument Bank Limited and Sterling Bank Limited.
”Affirmation of the long-term ratings of nine Nigerian banks reflects a combination of the difficult operating environment, as captured by Moody’s Macro Profile for Nigeria at “Very Weak” and the interlinkages between the sovereign’s creditworthiness and the banks’ balance sheets, given the banks’ significant holdings of sovereign debt securities” Moody’s said.
According to Moody’s, the change to positive outlook on the long-term deposit, long-term issuer and senior unsecured debt ratings of the nine Nigerian banks is driven by the implementation of new reforms in Nigeria, as captured by the change in outlook to positive on the government rating.
The affirmation of the nine banks at Caa1 follows affirmation on 8 December 2023 of the long-term issuer rating of the Federal Government of Nigeria at Caa1, and change in outlook to positive.
Moody’s notes that the rated Nigerian banks have significant direct and indirect exposure to the Nigerian sovereign, with a significant portion of their assets located in the country, and sovereign debt holdings representing 34% of their aggregate total assets as of September 2023.
”Government exposure links the banks’ credit profiles with the sovereign,” the Ratings agency said.
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